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Monday, April 13, 2009 RSSSEND TO A FRIENDPRINT
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Top 10 Stories
GM's Plan For Brief Stay In Bankruptcy Faces Hurdle
'Surgical' Bankruptcy Possible for G.M.
Here's How Dealers Can Prepare
Fiat Funds From Subsidiary Loan Could Aid Chrysler
Chrysler Debt Plan Still Vague
Uncertainty Over GM's Fate Leaves Many Wondering About Theirs
Dealers Lose Hope; Saturn Loses Stores
Auto-Dealer Ranks Dwindled in First Quarter
GM, Chrysler Ratings Are Cut by S&P as Deadlines Loom
Cash-for-Clunkers Can Benefit Environment and Detroit
Top 10 Stories
GM's Plan For Brief Stay In Bankruptcy Faces Hurdle

General Motors Corp.'s strategy for a quick trip through bankruptcy court is likely to spark legal challenges from bondholders worried about getting steamrolled. Some bondholders ... fear there is little they can do to slow momentum on GM's plans [under Section 363 of the U.S. Bankruptcy Code], given the $13.4 billion in taxpayer money invested in the auto maker and the enthusiasm within the administration for the 363 route. Yet even if they don't prevail, bondholders say a legal challenge could discourage similar fast-track efforts down the line.
Source: The Wall Street Journal

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'Surgical' Bankruptcy Possible for G.M.

DETROIT — The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline ... The preparations are aimed at assuring a G.M. bankruptcy filing is ready should the company be unable to reach agreement with bondholders to exchange roughly $28 billion in debt into equity in G.M. and with the United Automobile Workers union ... “If we need to resort to bankruptcy, we have to do it quickly,” [G.M.’s chief executive Fritz Henderson] said.
Source: The New York Times

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Here's How Dealers Can Prepare

If an automaker goes under, beware the hazards
A Chapter 11 filing by General Motors or Chrysler LLC would create many hazards for dealers. But dealers can prepare, some dealers and attorneys say. Here is a summary of the advice we collected.

-- Trim inventory.
-- Bill the factory now. ... such as sales incentives and warranty claims.
-- Prepare Plan B. [Attorney Leonard Bellavia of Mineola, N.Y.,] says dealers should prepare to find an alternative use for their dealership buildings — such as a used-car lot.
-- Talk to your lender. "Dealers should sit down with their accountants and develop a presentation" they can give their lenders, says Michael Charapp, a dealer attorney in McLean, Va.
Source: Automotive News

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Fiat Funds From Subsidiary Loan Could Aid Chrysler

The Italian automaker Fiat SpA is seeking billions of dollars in U.S. banking rescue funds through one of its subsidiaries -- money that could be used to prop up its deteriorating cash reserves and, ultimately, help Fiat and Chrysler LLC finalize an alliance that could rescue the Auburn Hills-based automaker. [Fiat] is seeking the funds through its majority-owned subsidiary, CNH Capital ... "It opens up the availability of cash for Fiat," [said Craig Litherland, a bankruptcy attorney with the firm of Gilbert Oshinsky in Washington, D.C.]
Source: Detroit Free Press

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Chrysler Debt Plan Still Vague

Automaker, task force have 19 days to settle it
WASHINGTON -- With 19 days to go, talks among Chrysler LLC, the Obama administration and Chrysler's creditors have yet to produce a firm proposal for how the company's debt should be reduced.
Source: Detroit Free Press

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Uncertainty Over GM's Fate Leaves Many Wondering About Theirs

John McEleney, the chairman of the National Automobile Dealers Association ... said used car sales, service departments and faithful returning GM customers have helped him weather the tough economy. With customers already anxious about GM's future, however, a bankruptcy would only aggravate the problem. "That would just diminish consumer confidence further and make it harder to get financing for retail buyers and for dealers who need inventory financing. So I think it's fraught with problems," McEleney said.
Source: McClatchy Newspapers

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Dealers Lose Hope; Saturn Loses Stores

DETROIT — On Jan. 1, Saturn had 420 stores in the United States. That dropped to 405 on Feb. 15 and 384 on April 6. GM's plan to wind down Saturn, announced Feb. 17, is hammering sales.
Source: Automotive News

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Auto-Dealer Ranks Dwindled in First Quarter

DETROIT -- In the first quarter of the year, 271 auto dealers in the U.S. went out of business, according to the National Automobile Dealers Association.
Source: The Wall Street Journal

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GM, Chrysler Ratings Are Cut by S&P as Deadlines Loom

General Motors Corp. and Chrysler LLC had ratings cut on some of their debt by Standard & Poor’s as the automakers face government deadlines to restructure or file for bankruptcy.
Source: Bloomberg

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Cash-for-Clunkers Can Benefit Environment and Detroit

A temporary incentive that encourages lots of drivers to trade the dirtiest clunkers for more fuel efficient models will help every American, including those employed by the domestic auto industry, breathe easier.
Source: Detroit Free Press

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Quotable
 
"[Bankruptcy of GM or Chrysler] would just diminish consumer confidence further and make it harder to get financing for retail buyers and for dealers who need inventory financing. So I think it's fraught with problems."

    -- John McEleney, chairman of NADA, McClatchy Newspapers, April 10


“If we need to resort to bankruptcy, we have to do it quickly.”

    -- Fritz Henderson, CEO of GM, The New York Times, April 13

Video Highlights
 
 
GM Bankruptcy Not Inevitable (msnbc.com)

 
Senate Testimony on Floorplan Loans (NADA-TV)



NADA and the Obama Auto Task Force  (NADA-TV)


 
Banks Turning on American Car Dealers? (WTNH-TV)


 
EPA Hearing on Fuel Economy (NADA-TV) 


 NADA Tackles Industry Crisis
 NADA Chairman Speaks at the Convention in New Orleans
NBC: "Demise of Local Dealerships Leaves Big Dent"
2009 Convention in New Orleans
NADA on the Front Lines


Click here for more video reports.

 
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