I expect the UAW to demand a pay raise and threaten a strike.
GM RETAINS BANKRUPTCY COUNSEL. General Motors Corp. has hired several prominent restructuring advisors as the company faces a liquidity crisis, says today’s Wall Street Journal.
The company advised Congress last week that it needs $10 billion in government loans to avoid insolvency during the first quarter of 2009.
The Journal, which cites unidentified sources, says GM has retained Jay Alix, co-founder of Birmingham, Mich.-based turnaround firm Questor Management Co.; William Repko, senior managing director of investment bank Evercore Partners; and Arthur Newman, co-head of restructuring at private equity and advisory firm The Blackstone Group. Blackstone and Evercore are based in New York City.
The newspaper also says the company has hired bankruptcy veteran Harvey Miller, a partner at New York City-based law firm of Weil Gotshal & Manges, and Martin Bienenstock at the law firm of Dewey & LeBoef, who worked on the Enron bankruptcy. The automakerconfirms only that it has hired “appropriate advisers for all contingencies.” GM director Kent Kresa, former chairman of Northrop Grumman Corp., tells the newspaper the board has considered bankruptcy but voted at a recent meeting to dismiss that option, at least for now. The board believes consumers wouldn’t buy vehicles from a bankrupt automaker, Kresa says.
AUTO STOCKS BATTERED ON LOAN FEARS. The shares of automakers and suppliers posted steep declines yesterday amid modest losses in the broader stock market. Analysts say auto investors were worried about the fate of legislation to provide emergency loans to Chrysler and General Motors.
Shares of Ford and General Motors fell 11% yesterday to $2.90 and $4.12 per share, respectively. Other OEM stocks were mixed in U.S. trading, including Daimler (-3%), Honda (+4%), Nissan (-1%) and Toyota (+2%).
In Asian trading after news of the failed bailout, shares of Honda, Nissan and Toyota fell 13%, 11% and 11%, respectively. The stock of suppliers Denso and Bridgestone dropped 11% and 10%. Hyundai was down 7%.
Fitch Ratings warned yesterday it was considering the downgrade of seven suppliers it deems vulnerable to a GM bankruptcy. Shares of all those companies dropped yesterday in U.S. trading, including American Axle (-6%), ArvinMeritor (-13%), Johnson Controls (-8%) and Tenneco (-11%). Also posting big declines were Federal-Mogul (-13%) and Lear (-19%).
What happens when Uncle Sam won’t give you cash to substitute for lousy sales.
This would be like me complaining that my credit card companies have begun calling me and saying they won´t provide more services until I pay them back.
Since they are selling the ones they have already built why will this matter ?
Bush will throw a tarp over it.
“The halt of parts from even one key supplier could stop Chrysler’s auto production”
So the idiotic and insane (Just in Time delivery) program comes back to bite ya in the ***.
Well it’s about **** time !
Stupid, idiotic programs litigated from Unions to put the crimps on all out sourcing.
Erase the Unions - Erase the problems
“Cerberus Capital Management can’t give Chrysler a big cash infusion, as some lawmakers have suggested, because its internal rules limit the amount doled out for any individual investment.”
Oh !, well heck. Please forgive us for suggesting making changes to your Corporations Policy !
Oil companies have treated the airlines this way for years.