On Fri, 12 Dec 2008 21:43:30 -0500, "Ed Huntress"
wrote:
snip
As many of the vendors have been driven to the brink of
bankruptcy, and in many cases are now working at cost, in
addition to providing zero interest loans through the "90 days
same as cash" Detroit vendor payment plans, it is unclear exactly
what they are supposed to do.
snip
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This just in -- possibly the start of a cascade of B/K Detroit
automotive vendors.
=====================
6:12 p.m., Dec. 12, 2008
Precision Parts files for Chapter 11 bankruptcy
By Ryan Beene
Rochester Hills-based auto supplier Precision Parts International
L.L.C. filed for Chapter 11 bankruptcy protection late Friday in
Delaware.
The company said in a motion filed with U.S. Bankruptcy Court in
Wilmington, Del. that falling sales to domestic automotive and
non-automotive manufacturers, increasing steel prices and other
factors have combined to cut revenues and cash flow and impaired
the company’s ability to pay its debts.
A list of creditors filed with the court shows that Precision
Parts owes the Detroit 3 more than $4.6 million for steel
acquired through the automakers’ steel repurchasing program — a
system for steel purchasing where automakers buy steel for its
suppliers to get a better price on larger orders, which the
supplier pays for after the fact.
snip
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http://www.crainsdetroit.com/article...EE/812120291/0
======================
11:26 a.m., Dec. 12, 2008
Credit firm puts auto suppliers on watch
By Ryan Beene
Six local auto suppliers were placed on review late Thursday for
a possible ratings downgrade on fears of a potential bankruptcy
at General Motors Corp.
Wall Street credit ratings firm Fitch Ratings placed the
suppliers’ Issuer Default Ratings, which grade a company’s
ability to meet financial obligations, on watch late Thursday.
The companies we
--Detroit-based American Axle & Manufacturing Holdings Inc.
(NYSE: AXL)
--Troy-based ArvinMeritor Inc. (NYSE: ARM).
--Northville-based Hayes-Lemmerz International Inc. (NASDAQ:
HAYZ).
--Livonia-based TRW Automotive Holdings Corp. (NYSE: TRW)
--Van Buren Township-based Visteon Corp. (NYSE: VC)
--Milwaukee-based Johnson Controls Inc. (NYSE: JCI). Johnson
Controls’ automotive operations are based in Plymouth.
The companies were placed on review because of the impact of a
possible Ch.11 bankruptcy at General Motors, and Fitch’s view
that Ford Motor Co. would also fall into Ch. 11 if GM sought
court protection, according to a Fitch memo.
snip
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http://www.crainsdetroit.com/article...FREE/812129993
====================
December 12, 2008, 10:57 am
As Goes GM, So Go Auto Suppliers; Savings And The Consumer
Posted by Bob O'Brien
FITCH WARNS OF IMPENDING DOWNGRADES IF GM GOES
If General Motors (GM) were to find itself with no recourse but
to declare bankruptcy, a host of auto supplier could - not
surprisingly - follow suit. At the very least, the rest of the
automotive food chain, including suppliers of parts, components
and systems, would face widespread default on credit obligations,
and find themselves facing an increasingly adversarial creditor
base.
Fitch ratings service said that it may cut the credit ratings on
seven auto suppliers because of concerns over the prospect of a
GM bankruptcy filing. It said such a move would result in
”contraction of auto production, supply chain, trade credit, and
capital access, and cause widespread slowdowns and bankruptcies
throughout the supply chain.” At the very least, a GM bankruptcy
would spark violations of loan-covenant agreements ”across a
majority of (parts) suppliers.”
The firm said it considered American Axle (AXL) to have the
greatest risk of a downgrade; if it changed the rating on the
company, which is currently rated five steps below investment
grade, it would fall to the extremely speculative rating of ‘CC’.
Hayes Lemmerz (HAYZ) and ArvinMeritor (ARM) are also currently
graded five steps below investment grade. Within the group,
Visteon (VC) - eight steps from investment grade - carries the
most-speculative rating; Johnson Control (JCI) is the only name
in the sector with an investment-grade rating.
Tenneco (TEN) and TRW (TRW), whose current investment ratings
have them within two steps of investment grade, are regarded as
the healthiest names in the sector, in terms of
credit-worthiness. But even they would likely have to renegotiate
their current debt covenants with lenders.
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http://blogs.barrons.com/stockstowat...-the-consumer/
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).