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Krijgen de USA automakers centjes vd senaat?

1. [verwijderd] 11 december 2008 23:37

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   A GM failure risks more debt losses, default chain
   By Karen Brettell
   
   NEW YORK, Dec 11 (Reuters) - A bankruptcy filing by General Motors Corp could unleash a chain of devastating defaults by other automakers and suppliers, creating widespread new losses in debt and stock markets.
   
   The White House urged Republicans in the Senate on Thursday to back a $14 billion bill to rescue the U.S. auto industry but the measure was in danger of sputtering out and dying.
   
   GM and Chrysler want loans by month's end to survive. Ford is asking for a line of credit to be tapped if its finances worsen more than expected in 2009. For details, see [ID:nN09294627]
   
   "The assumption is that if the government doesn't provide this loan to GM and Chrysler that they're not just going to file for bankruptcy, they're going to liquidate," said Shelly Lombard, analyst at independent research firm Gimme Credit.
   
   The dramatic pullback in lending by banks and other lenders amid the global credit crisis has dried up access to loans, known as debtor-in-possession (DIP) loans, needed by companies to restructure under bankruptcy protection.
   
   That makes it hard for cash-strapped companies filing for protection but unable to get a DIP loan to avoid liquidation.
   
   "Usually a company files and immediately they get a big DIP, because they want to be sure they can pay suppliers etc. Those days are probably gone," said Lombard. "GM and Chrysler would need a $10 or $15 billion DIP and I don't think there's anyone out there that could provide something like that."
   
   Politicians may not understand the consequences of not providing a loan, she said.
   
   Republicans want more accountability from the car makers in exchange for the loans and more protection for taxpayers.
   
   MASS DESTRUCTION
   
   A GM liquidation would flood the market with cheap cars, hurting sales of competitors including Ford Motor Co .
   
   Suppliers like American Axle & Manufacturing Holdings , which makes the vast majority of its sales to GM and Chrysler, would also be likely to fail, analysts said.
   
   GM and Ford had in excess of $21 billion in domestic, short-term trade payables as of Sept. 30 and the failure to meet these payments in a timely manner would be crippling to auto suppliers, said Mark Oline, analyst at Fitch Ratings.
   
   "The systemic risk of a GM bankruptcy is liquidation, as the failure of payments could cascade through the auto and auto supplier sectors," Bank of America analysts said in a report.
   
   The ability for a supplier to survive will depend on their exposure to GM and Chrysler and whether they have enough cash to survive any restructuring needed for their own business, said Gimme Credit's Lombard.
   
   "It's going to be all over the map, but it's definitely not going to be GM and Chrysler go in (to bankruptcy) and nobody else folds," she said. "This is going to be mass destruction."
   
   THE PRICE OF LIQUIDATION
   
   GM's bonds are trading between 16 and 20 cents on the dollar, indicating a strong likelihood of bankruptcy filing.
   
   What may not be priced in, however, is the impact of a wave of defaults in the auto industry, and how little debt may be recovered in a liquidation.
   
   "I think if GM liquidates the recovery to bondholders could be zero," Lombard said.
   
   Bank lenders to automakers would also see large losses.
   
   "In liquidation you're just selling off the inventory at a discount, it's not enough value to cover even the secured bank debt," she said.
   
   A wave of auto defaults also poses risks to sellers of default protection on a benchmark high-yield credit derivative index, which is heavy on auto names.
   
   "If the government allows General Motors to fail without any assistance, we believe the domino effect across the auto sector will be significant and the high-yield default rate could hit 13 percent" in 2009, analysts at Barclays said in a report.
   
   This compares with a default rate of as low as 7 percent if the auto sector recovers, they said.
   
   Net volumes of around $82.54 billion are outstanding on the current and last three series of the high yield index, according to data by the Depository Trust & Clearing Corp.
   
   Broader debt markets would also likely be impacted by a GM failure as investors become even more risk averse on uncertainty over how far losses may spread.
   
   "We think that the repercussions of a GM bankruptcy filing would certainly be very widespread and ultimately unpredictable," said Fitch's Oline. (Editing by James Dalgleish) ((karen.brettell@thomsonreuters.com; Tel: +1 646 223 6274; Reuters Messaging: karen.brettell.reuters.com@reuters.net))
   
2. [verwijderd] 11 december 2008 23:50

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   House passes auto bailout, Senate prospects uncertain
   * House approves bailout
   
   * Republican opposition muddles Senate prospects
   
   * White House endorses effort
   
   * GM, Ford shares drift lower
   
   By John Crawley and Thomas Ferraro
   
   WASHINGTON, Dec 10 (Reuters) - The House of Representatives approved bailout legislation on Wednesday that would force U.S. automakers to restructure or fail, sending the measure to the Senate where prospects for passage are uncertain.
   
   Democrats sought to reclaim momentum in the $14 billion bailout effort, with the bill they negotiated with the Bush administration clearing the chamber by 237-170.
   
   "This legislation is about offering Detroit and America a chance to get back on track," House Speaker Nancy Pelosi said in a floor speech before the vote. "It gets down to a question of tough love."
   
   The White House weighed in just before the vote with a public endorsement aimed at Republicans skeptical of the rescue and demanding a tougher approach for helping General Motors Corp , Ford Motor Co , and Chrysler LLC.
   
   "We believe the legislation developed in recent days is an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs," White House spokeswoman Dana Perino said in a statement.
   
   Democrats advocated passage based on the belief that government inaction could lead to an industry collapse that would cost taxpayers far more than the loans intended to see them through March and help them restructure.
   
   While the House stuck to its plan for quick action, uncertainty gripped the Senate where a razor-thin Democratic majority cannot ensure passage. Sixty votes are needed to clear procedural hurdles.
   
   A vote could come as early as Thursday, but some Republicans have vowed to slow or even block the legislation.
   
3. [verwijderd] 11 december 2008 23:52

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   Bailout komt echt wel. A matter of time.
   Alleen morgen nog even niet aub zit met puts ;-)
4. [verwijderd] 12 december 2008 00:07

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   GOP Minority leader Kentucky Senator Mitch McConnel came out AGAINST the auto bailout...virtually dooming the bill. NY Times,
   front page:
   www.nytimes.com
   
5. [verwijderd] 12 december 2008 00:12

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   Howdy,
   
   Ik snap niet dat Nancy Pelosi en George Bush niet aan de Nederlanders raad vragen, dan is het Big3 Auto probleem toch meteen opgelost, want die polderjongens weten hoe alles moet.
   
   >--:-)-->
   
   p.s. Geen Senaat vote to-day
6. [verwijderd] 12 december 2008 06:35

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   Auto bailout dies in Senate
   
   www.reuters.com/article/politicsNews/...
7. [verwijderd] 12 december 2008 10:14

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   Ik had gisterenavond zowel cnbc als cnn aan staan. Er werd géén woord over gerept over de "vote" in de senaat. Toch wel bedenkelijk, deze media...
8. [verwijderd] 12 december 2008 10:17

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   quote:

   Andy in A schreef:

   Ik had gisterenavond zowel cnbc als cnn aan staan. Er werd géén woord over gerept over de "vote" in de senaat. Toch wel bedenkelijk, deze media...
   

   Toen was er nog niet gestemd!
   
9. [verwijderd] 12 december 2008 11:07

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   Heel verstandig van de Senaat om geen geld te geven: Bedrijven moeten eerst maar een grondig gesaneerd worden en geleid worden door vers nieuw krachtig bewust-ondernemend management. Ook hier(naast de bankiers) hebben de old-boys established netwerken management zeer ernstig gefaald.