{"id":192252,"date":"2009-04-23T23:01:00","date_gmt":"2009-04-24T04:01:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/04\/23\/auto-industry-update-5\/"},"modified":"2009-04-23T23:01:00","modified_gmt":"2009-04-24T04:01:00","slug":"auto-industry-update-5","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/04\/23\/auto-industry-update-5\/","title":{"rendered":"Auto Industry Update"},"content":{"rendered":"

It now appears that the sale of GM’s main European division is a done deal, and it also looks possible that they will essentially give the car company away<\/a>, “According to a person familiar with GM\u2019s thinking, an investor will be asked to pay at least \u20ac500m ($652m) in equity but the carmaker will realise no financial gain as the money will be injected directly into Opel.”<\/p>\n

I note without surprise that Cerberus, the private equity firm that owns Chrysler, is not interested in getting a piece of this deal<\/a>.<\/p>\n

When Cerberus bought Chrysler, they expected to hold onto it for perhaps 6 months, and then sell it to GM. Their model was flip and flee, not sensibly operate a company as a going concern.<\/p>\n

Meanwhile, on the worker benefits front, it looks like GM Sand the UAW will be renegotiating their benefits deal<\/a>, replacing much of the cash promised with an ownership stock in GM.<\/p>\n

There is very little that I am sure of, but one is that when employees get an ownership stake in lieu of payment, they get the shaft.<\/p>\n

In other GM News, it now appears that the normal 2 week end of year shutdown will be extended to 9 weeks<\/a>, which makes sense when you look at how moribund car sales are, and they spooked the market by saying that was unlikely that they would be making a $1 billion debt payment in July<\/a>, though they are saying that this is because they will have restructured the debt.<\/p>\n

There is also a report that the US government will move to convert GM’s debt to it into equity<\/a>, which will likely make the taxpayer the largest shareholder of the automotive giant.<\/p>\n

Meanwhile, the Treasury is directing Chrysler to prepare for a bankruptcy filing<\/a>, and not because, as the chattering class is so fond of asserting, the union is being unreasonable, but because the banks and other debt holders are.<\/p>\n

Chrysler lenders offer to cut debt, take stock – Apr. 21, 2009<\/a>, see here<\/a>,
here<\/a>, here<\/a>, and here<\/a>.<\/p>\n

Basically, the market value on their debt is about 15%, and they want something north of 85%.<\/p>\n","protected":false},"excerpt":{"rendered":"

It now appears that the sale of GM’s main European division is a done deal, and it also looks possible that they will essentially give the car company away, “According to a person familiar with GM\u2019s thinking, an investor will be asked to pay at least \u20ac500m ($652m) in equity but the carmaker will realise …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1108,1004],"tags":[],"class_list":["post-192252","post","type-post","status-publish","format-standard","hentry","category-auto-industry","category-finance"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/192252"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=192252"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/192252\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=192252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=192252"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=192252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}