"GM, Ford, Chrysler Face Bankruptcy Risk on Crisis, S&P Says"
"GM, Ford, Chrysler Face Bankruptcy Risk on Crisis, S&P Says," see http://www.bloomberg.com/apps/news?pid=20601087&sid=agqkU7To5lzM&refer=home. Part of the article is below.
"Oct. 10 (Bloomberg) -- General Motors Corp., Ford Motor Co. and Chrysler LLC, the three biggest U.S. automakers, may be forced into bankruptcy as the global credit freeze damps U.S. sales, Standard & Poor's analyst Robert Schulz said.
``Macro factors could overwhelm them at some point'' even as GM, Ford and Chrysler vow to stick with their turnaround plans, Schulz, S&P's lead automotive credit analyst, said today in a Bloomberg Television interview in New York. The companies said they have no plans to seek bankruptcy protection.
His assessment underscored the pressure on the industry as the worsening credit crisis makes it harder for buyers to get loans and dealers to finance their operations. S&P said yesterday it may further trim credit ratings for GM and Ford on forecasts for 2009 auto demand to fall to its lowest since 1992.
With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a ``strategic'' decision, Schulz said.
``We don't see that as something they would choose,'' he said. Schulz said the ``trigger'' for a forced restructuring under bankruptcy protection would be based on the automakers' ability to preserve liquidity as sales decline. Industrywide U.S. sales slid 27 percent last month, the most in 17 years.
`Not an Option'
``Bankruptcy is not an option GM is considering,'' spokeswoman Renee Rashid-Merem said in an interview today, reiterating comments made yesterday. ``It's not in the interests of our employees, stockholders, suppliers or customers.''
GM rose 13 cents, or 2.7 percent, to $4.89 at 4:02 p.m. in New York Stock Exchange composite trading, its first advance since Sept. 30. Ford dropped 9 cents, or 4.3 percent, to $1.99, its lowest since Oct. 5, 1982. Chrysler is closely held.
Operating-cash needs at GM, Ford and Chrysler are ``substantial, so if it looked like they were going to be pushing toward that number because of these operating losses and cash usage, that's sort of the point where they'd have to consider'' bankruptcy, Schulz said.
S&P said yesterday that its debt ratings for GM and Ford, already at six steps below investment grade at B-, may be lowered again because the automakers face a ``serious challenge'' in 2009."
.......http://www.JoeFRocks.com/
"Oct. 10 (Bloomberg) -- General Motors Corp., Ford Motor Co. and Chrysler LLC, the three biggest U.S. automakers, may be forced into bankruptcy as the global credit freeze damps U.S. sales, Standard & Poor's analyst Robert Schulz said.
``Macro factors could overwhelm them at some point'' even as GM, Ford and Chrysler vow to stick with their turnaround plans, Schulz, S&P's lead automotive credit analyst, said today in a Bloomberg Television interview in New York. The companies said they have no plans to seek bankruptcy protection.
His assessment underscored the pressure on the industry as the worsening credit crisis makes it harder for buyers to get loans and dealers to finance their operations. S&P said yesterday it may further trim credit ratings for GM and Ford on forecasts for 2009 auto demand to fall to its lowest since 1992.
With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a ``strategic'' decision, Schulz said.
``We don't see that as something they would choose,'' he said. Schulz said the ``trigger'' for a forced restructuring under bankruptcy protection would be based on the automakers' ability to preserve liquidity as sales decline. Industrywide U.S. sales slid 27 percent last month, the most in 17 years.
`Not an Option'
``Bankruptcy is not an option GM is considering,'' spokeswoman Renee Rashid-Merem said in an interview today, reiterating comments made yesterday. ``It's not in the interests of our employees, stockholders, suppliers or customers.''
GM rose 13 cents, or 2.7 percent, to $4.89 at 4:02 p.m. in New York Stock Exchange composite trading, its first advance since Sept. 30. Ford dropped 9 cents, or 4.3 percent, to $1.99, its lowest since Oct. 5, 1982. Chrysler is closely held.
Operating-cash needs at GM, Ford and Chrysler are ``substantial, so if it looked like they were going to be pushing toward that number because of these operating losses and cash usage, that's sort of the point where they'd have to consider'' bankruptcy, Schulz said.
S&P said yesterday that its debt ratings for GM and Ford, already at six steps below investment grade at B-, may be lowered again because the automakers face a ``serious challenge'' in 2009."
.......http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
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