TOP 100 TRANSPORTATION AND LOGISTICS SITES
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| Chrysler Puts U.S. Government Between Rock and Hard Place Sudhi Analyst submits:Government, the only willing DIP lender in Chrysler's case is between a rock and a hard place. The government absolutely doesn't want to see Chapter 7 style liquidation at Chrysler in this economy. They also would like to avoid the drag of Chapter 11. They don't want to make a potential DIP loan that they know they will lose money on if Chrysler continues to be burdened by huge liabilities and unviable even after DIP financing. They want the loss to be significantly absorbed by a private group of secured creditors on their $6.9 billion loan though the same group can recover much more if they wait it out in Bankruptcy court. Would the government be able to pull this off? Existing Secured lenders are being asked by the government to take an 85% haircut. The same group belives they can get recovery of 60% if the collateralized assets like Jeep were sold. If they know they can sufficiently prove this in Bankruptcy court (of course, if there is a filing), there is no way they are going to consent to the Government deal. They would rather wait for the Bankruptcy filing. Chrysler, the debtor, presumably does not have any unencumbered assets that they can put forward as collateral, at least to the extent of the new financing required. The DIP lender, (the US in this case as no other private entity wants to take this risk) will be granted priming lien on assets that were collateralized to pre-bankruptcy secured creditors, ONLY IF, continuance of operations would ultimately allow pre-bankruptcy secured creditors to gain at least the same recovery than if they had sold these collateralized assets (see link). So the government, it appears, is asking Chrysler lenders too much at this point. So why would they accept the terms of the Government when they are sufficiently protected and get far better recovery in bankruptcy court?Complete Story » seekingalpha.com |
Good Auto News: Chrysler Restarts Production, Ford Confirms Profit Plans The Good News Economist submits: As the 2009 recovery gets underway, Chrysler and Ford (F) may be leading renewed optimism for US automakers. About a week after emerging from bankruptcy protection and finalizing a deal with the Fiat Group, Chrysler confirmed on Wednesday that the company plans to resume production of vehicles at seven assembly plants in the US, Canada, and Mexico by the week of June 29. Two facilities are in Michigan, one in Missouri and another in Ohio. Three other assembly plants are in Canada and Mexico.Complete Story » seekingalpha.com |
Recreational Vehicle Sector: Seriously Overbought David White submits:At the time of this writing on Friday, Harley-Davidson (HOG) was trading at $22.65. This is 38 times 2009 earnings. From July 6, 2009, HOG has moved up from $14.99 to $22.65. That’s a whopping +52% in less than a month. Its March low was a lowly $7.99 (an almost 300% rise from there). HOG must have reported great earnings to do this? Actually no, HOG earned only +$.08/share. This constituted a -66.7% surprise to estimated earnings, and those estimates had been revised downward. Admittedly, HOG did introduce 10 new motorcycles a few days ago.Complete Story » seekingalpha.com |
Ford: Volvo Talks with Geely May Have Hit a Speed Bump TheCarConnection.com submits: A couple of weeks ago, we reported that Crown -- a consortium of American investors led by former auto industry executives -- is making a play for Volvo. The group's bid for the brand is substantially lower than that of current front-runner Geely, but we pointed out that the Americans do have some advantages at the bargaining table, especially when it comes to one of Ford's biggest concerns: intellectual property. China in general, and Geely in particular, aren't known for respecting IP rights, and as negotiations move forward, we suggested that could become a sticking point.Apparently, it has become a sticking point.Complete Story » seekingalpha.com |
Honda Poised to Become Number Four in U.S. TheCarConnection.com submits: It's no longer just Toyota (TM) that's running with the Big Three in terms of sales. Over the past month, Honda (HMC) has quietly passed Chrysler as the number-four automaker in the U.S. market. That places American Honda after Toyota Motor Sales and the new General Motors Company in U.S. sales.Complete Story » seekingalpha.com |