Big Auto

  • 01 Apr 2009 at 3:11 PM

This Might Actually Be The End

It’s one thing to say that a firm might be better off in bankruptcy. It is another entirely to prod it down the plank towards the sea.

General Motors Corp.’s 60-day deadline to restructure is unlikely to be extended because the U.S. won’t repay $1 billion in convertible notes maturing June 1, according to a person with knowledge of the discussions.
President Barack Obama’s auto task force told the biggest U.S. automaker it doesn’t want taxpayer funds used to repay debt maturities, said the person, who declined to be identified because the talks are private. Detroit-based GM has $1 billion of 1.5 percent convertible securities coming due June 1. The debentures, issued in increments of $25, fell $2.05 to $7.20 as of 1:56 p.m. in New York, which would be the lowest closing price since December, according to data compiled by Bloomberg.

Funny, we don’t remember any sort of squeamishness about “taxpayer funds used to repay debt maturities,” before now. Why the sudden change in heart?
GM Said to Be Warned Government Won’t Make June 1 Debt Payment [Bloomberg]

  • 01 Apr 2009 at 1:37 PM

We Told You Months Ago

Back when it wasn’t totally clear that GM would suck away every dollar unfortunate enough to even cross the expanding event horizon of fail that surrounded the company, you would have looked at us skeptically and slowly backed away (or jabbed us in the eye with a sharp stick). Still, that’s exactly what happened with the auto giant. But, as it happens, Obama doesn’t listen much to us, so, we were a little taken aback when he finally admitted the inevitable.

President Barack Obama believes a quick, negotiated bankruptcy is the most likely way for General Motors Corp. to restructure and become a competitive automaker, people familiar with the matter said.
GM’s $500 million of 7.7 percent notes due in 2016 tumbled 8.8 cents to 10.4 cents on the dollar as of 9:45 a.m. in New York, a record low, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt yields 79.7 percent, or 77 percentage points more than similar- maturity Treasuries, Trace data show.

Obama Said to Find Bankruptcy Likely for GM, Chrysler [Bloomberg]

  • 31 Mar 2009 at 5:19 PM

They Are What They Drive

With President Barack Obama showing the ailing U.S. auto industry some tough love Monday, POLITICO wondered — what’s …
… in the driveways of White House aides? A lot of foreign cars, as it turns out.

Explore the depths of auto-psychoanalysis, after the jump.

Read more »

Wow. That whole “Bankruptcy one option of many” thing lasted about, what, three whole hours?
Updates to come. The situation is fluid.

  • 30 Mar 2009 at 11:13 AM

Obama: Extensions For Big Auto

The situation is fluid.
Obama (In his capacity as the First GM Human Resources Director): Wagoner is moving on to pursue other opportunities.
Obama (In his capacity as the First Managing Director, Investment Banking/Advisory): Chrysler needs a deal with Fiat.

  • 29 Mar 2009 at 6:21 PM

Dealbreaker Weekend: Obama To Wagoner: You’re Fired!

Mr. Wagoner has been CEO since 2000 and has managed the company through some of its most difficult moments. Over the last four years, GM has reported losses of $82 billion and nearly ran out of money at the end of 2008 before the U.S. Treasury Department provided emergency loans.

GM’s Wagoner Will Step Down [The Wall Street Journal]

  • 19 Mar 2009 at 11:15 AM

Immortality

Now that Big Auto looks poised to do its run down the double black diamond run “Bankruptcy,” seems like a great time for some free lift passes to Big Auto Supply, right? After all, where is the money going to come from to keep all those plants full of employees when Big Auto stops buying parts in mass quantities to fill up lots with unused inventories of new cars no one wants?

The Obama administration plans to announce a financing facility that would provide up to $5 billion in assistance to the country’s beleaguered auto-parts suppliers, many of which are teetering on the edge of bankruptcy.
The assistance would pump money into dozens of the country’s biggest suppliers to help pay for seats, axles and other components shipped to the Big Three auto makers, but not paid for, people familiar with the announcement said.
The administration plans to announce the details of the plan this morning.

Always later with the details. Sheesh.
Lenders have already gotten wise and have closed lines of credit to firms that rely on Ford, GM and Chrysler for major fractions of their revenue. It isn’t surprising that the suppliers would turn to the government, the “lender of last resort” as it were, since this is their last resort. This begs the question: Will this administration ever let a dying firm just die?
U.S. to Provide $5 Billion in Aid to Auto-Parts Suppliers [The Wall Street Journal]

  • 17 Mar 2009 at 3:45 PM

Oh, Canada!

Chrysler might not be long for Canada.
In its continual quest to trim operations the big C is presently focused on Canada, where, in addition to a $2.3 dollar loan (we hope that’s in Canadian dollars) the automaker is seeking concessions from the Canadian Auto Workers Union.

Chrysler LLC is studying how it could pull operations out of Canada if it doesn’t win wage and benefit concessions from the country’s auto union that are considerably larger than those given to General Motors Corp.
Chrysler officials are talking to leaders of the Canadian Auto Workers union today to see whether the union will be flexible in terms of changing its contract, said a person involved in the negotiations who asked not be named because the talks are private.

We aren’t hopeful.
Chrysler Is Said to Ready for Canada Pullout on Union [Bloomberg]