Fiat to send 59,000 workers on compulsory holidays until Jan. 12
Italian car manufacturer Fiat will send 59,000 employees on compulsory holidays until January 12, broadcaster CNNTurk reported on Monday (UPDATED)
Fiat has taken the decision to send 59,000 employees on compulsory holidays until January 12 in response to falling demand, broadcaster CNNTurk reported.
Top European car makers warned of a bleak 2009 as signs grew the deep crisis in the auto sector went far beyond the U.S industry's life-or-death struggle.
Fiat head Sergio Marchionne, who last week predicted only six carmakers would survive in the long run from the current 50, said in La Repubblica that 2009 would be the most difficult year he had ever seen in his life.
Milano Finanza newspaper said Italian Prime Minister Berlusconi and French Present Nicolas Sarkozy discussed a tie-up of Fiat with Peugeot Citroen, which would give them critical mass.
The heads of Renault-Nissan and Fiat had earlier said the car market would decline further next year after steep sales drops pushed the U.S. Big Three to ask for the bailout that was rejected by Congress and prompted White House action.
Italian car manufacturer Fiat will send 59,000 employees on compulsory holidays until January 12, broadcaster CNNTurk reported on Monday (UPDATED)
Fiat has taken the decision to send 59,000 employees on compulsory holidays until January 12 in response to falling demand, broadcaster CNNTurk reported.
Top European car makers warned of a bleak 2009 as signs grew the deep crisis in the auto sector went far beyond the U.S industry's life-or-death struggle.
Fiat head Sergio Marchionne, who last week predicted only six carmakers would survive in the long run from the current 50, said in La Repubblica that 2009 would be the most difficult year he had ever seen in his life.
Milano Finanza newspaper said Italian Prime Minister Berlusconi and French Present Nicolas Sarkozy discussed a tie-up of Fiat with Peugeot Citroen, which would give them critical mass.
The heads of Renault-Nissan and Fiat had earlier said the car market would decline further next year after steep sales drops pushed the U.S. Big Three to ask for the bailout that was rejected by Congress and prompted White House action.
Det er rigtigt firmaer, også i DK som har sendt deres medarbejdere på kursus
15/12 2008 22:59 le 0
628 GM may need $30 billion government loan to survive: BofA
Monday December 15, 2008, 2:04 pm EST
Yahoo! Buzz Print Related:American Axle & Manufacturing Holdings Inc., Ford Motor Co., General Motors Corporation
NEW YORK (Reuters) - The U.S. government may need to lend General Motors Corp (NYSE:GM - News) around $30 billion to help the automaker operate through a bankruptcy, or risk a systemic chain of failures in the auto industry, Bank of America said.
The GM headquarters is seen in downtown Detroit, Michigan December 9, 2008. REUTERS/Carlos Barria
Related Quotes
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AXL 2.25 +0.02
F 3.16 +0.12
GM 4.10 +0.16
LEA 1.79 -0.09
VC 0.45 -0.01
{"s" : "axl,f,gm,lea,vc","k" : "c10,l10,p20,t10","o" : "","j" : ""} The Bush administration said on Friday it could be willing to provide emergency aid to the teetering U.S. auto industry, keeping open the prospects for a bailout the day after Congress failed to approve a deal.
Warning of dire consequences for the recession-hit U.S. economy if the once-mighty automakers collapsed, the White House -- in a reversal of policy -- said it was ready to consider dipping into a $700 billion Wall Street bailout fund to help keep the companies afloat.
GM may need around $30 billion in debtor-in-possession loans, which are used to pay for a company's operating expenses as it restructures under bankruptcy protection, Bank of America analysts said in a report issued late on Friday.
The $30 billion represents around two times GM's working capital, with an additional $10 billion cushion for further earnings hits and to fund suppliers, the bank said.
GM had $36 billion in long-term debt as of September 30, according to a regulatory filing.
To support GM, and the industry, the government will need to lend funds to support the company in bankruptcy rather than out of bankruptcy, as that is the only way to ensure the government has the most senior claim on the automaker's assets, the bank added.
"The alternative to attempt to legislate a senior position for the government outside of bankruptcy, as appeared in earlier versions of the auto bailout legislation, represents a violation of contract law, a dangerous precedent that all government interventions to date have sought to avoid," the bank said.
Bank of America suggests that the money from the Troubled Asset Relief Program, or TARP, could be combined with funds from section 13 of the Federal Reserve Act, which allows the Fed to lend to companies on a secured basis under "unusual and exigent conditions."
"With the DIP in place to allow fundamental cost restructuring, restoring the long-term viability of GM could mean a longer payback of government funds over a 5-10 year period and perhaps sooner through a sale or refinancing," the bank added.
SYSTEMIC RISKS
If GM fails to get funding and is forced to liquidate, it would have systemic consequences, dragging down suppliers and potentially other automakers with it, Bank of America said.
American Axle & Manufacturing Holdings (NYSE:AXL - News) makes most of its sales to GM and is most exposed to a GM failure, the bank said.
If a company like Lear Corp (NYSE:LEA - News), which supplies GM and Ford Motor Co (NYSE:F - News), is hurt by a GM failure it could also inhibit its ability to supply Ford, which in turn could also hurt Ford's major supplier, Visteon Corp (NYSE:VC - News), the report said.
"The systemic risk argument of a set of cascading payment defaults is borne out in the close linkages between suppliers and manufacturers," Bank of America said.
"Debtor-In-Possession financing helps to forestall such a systemic risk outcome by allowing companies to continue to operate, and in this case, to continue to make payments to their suppliers, and avoid such an event," the bank added.
Monday December 15, 2008, 2:04 pm EST
Yahoo! Buzz Print Related:American Axle & Manufacturing Holdings Inc., Ford Motor Co., General Motors Corporation
NEW YORK (Reuters) - The U.S. government may need to lend General Motors Corp (NYSE:GM - News) around $30 billion to help the automaker operate through a bankruptcy, or risk a systemic chain of failures in the auto industry, Bank of America said.
The GM headquarters is seen in downtown Detroit, Michigan December 9, 2008. REUTERS/Carlos Barria
Related Quotes
Symbol Price Change
AXL 2.25 +0.02
F 3.16 +0.12
GM 4.10 +0.16
LEA 1.79 -0.09
VC 0.45 -0.01
{"s" : "axl,f,gm,lea,vc","k" : "c10,l10,p20,t10","o" : "","j" : ""} The Bush administration said on Friday it could be willing to provide emergency aid to the teetering U.S. auto industry, keeping open the prospects for a bailout the day after Congress failed to approve a deal.
Warning of dire consequences for the recession-hit U.S. economy if the once-mighty automakers collapsed, the White House -- in a reversal of policy -- said it was ready to consider dipping into a $700 billion Wall Street bailout fund to help keep the companies afloat.
GM may need around $30 billion in debtor-in-possession loans, which are used to pay for a company's operating expenses as it restructures under bankruptcy protection, Bank of America analysts said in a report issued late on Friday.
The $30 billion represents around two times GM's working capital, with an additional $10 billion cushion for further earnings hits and to fund suppliers, the bank said.
GM had $36 billion in long-term debt as of September 30, according to a regulatory filing.
To support GM, and the industry, the government will need to lend funds to support the company in bankruptcy rather than out of bankruptcy, as that is the only way to ensure the government has the most senior claim on the automaker's assets, the bank added.
"The alternative to attempt to legislate a senior position for the government outside of bankruptcy, as appeared in earlier versions of the auto bailout legislation, represents a violation of contract law, a dangerous precedent that all government interventions to date have sought to avoid," the bank said.
Bank of America suggests that the money from the Troubled Asset Relief Program, or TARP, could be combined with funds from section 13 of the Federal Reserve Act, which allows the Fed to lend to companies on a secured basis under "unusual and exigent conditions."
"With the DIP in place to allow fundamental cost restructuring, restoring the long-term viability of GM could mean a longer payback of government funds over a 5-10 year period and perhaps sooner through a sale or refinancing," the bank added.
SYSTEMIC RISKS
If GM fails to get funding and is forced to liquidate, it would have systemic consequences, dragging down suppliers and potentially other automakers with it, Bank of America said.
American Axle & Manufacturing Holdings (NYSE:AXL - News) makes most of its sales to GM and is most exposed to a GM failure, the bank said.
If a company like Lear Corp (NYSE:LEA - News), which supplies GM and Ford Motor Co (NYSE:F - News), is hurt by a GM failure it could also inhibit its ability to supply Ford, which in turn could also hurt Ford's major supplier, Visteon Corp (NYSE:VC - News), the report said.
"The systemic risk argument of a set of cascading payment defaults is borne out in the close linkages between suppliers and manufacturers," Bank of America said.
"Debtor-In-Possession financing helps to forestall such a systemic risk outcome by allowing companies to continue to operate, and in this case, to continue to make payments to their suppliers, and avoid such an event," the bank added.
15/12 2008 23:14 le 0629 General Motors will drastically slash North American production to 425,000 vehicles in the first quarter of 2009 -- fewer than half the total it built in the first quarter of this year. Company spokesman Chris Lee said GM is cutting 175,000 units from the first-quarter forecast that it had issued on Dec. 2. The production cuts offer dramatic evidence that GM expects no letup in the sales slump that grips the entire auto industry. » Read Article [SUB] 12:01 am U.S. ET | Dec. 15
