Big 3 headed for bankruptcy – may kill off NASCAR
“Clearly we face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets," the automaker said in the statement. “But bankruptcy protection is not an option GM is considering. It would not be in the interests of our employees, stockholders, suppliers or customers, and we believe speculation about a possible filing is exaggerated and unconstructive."
GM is expected to announce further production cuts at stamping or powertrain plants as early as next week.
10/10/08 General Motors Corp., Ford Motor Co. and Chrysler LLC may be forced into bankruptcy by slowing economies and dwindling U.S. auto sales, Standard & Poor's analyst Robert Schulz said today.
“Macro factors could overwhelm them at some point'' even with the three biggest U.S. automakers committed to turnarounds, Schulz said in a Bloomberg Television interview. S&P said yesterday it may cut GM and Ford debt deeper into junk on forecasts for 2009 auto demand falling to the lowest since 1992.
GM, Ford and Chrysler are under pressure as the worsening global credit crisis makes it harder for buyers to get loans and dealers to finance their operations. U.S. industry wide sales tumbled 27 percent in September, the most in 17 years.
GM fell 17 cents, or 3.6 percent, to $4.59 at 9:52 a.m. in New York Stock Exchange composite trading, while Ford added 7 cents to $2.15. GM slumped to a 58-year low yesterday and Ford closed at its lowest since 1982. Chrysler is closely held.
With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a “strategic'' decision, said Schulz, who is based in New York.
“We don't see that as something they would choose,'' he said. Schulz said the “trigger'' for a forced restructuring under bankruptcy protection would be based on the automakers' ability to preserve liquidity as sales decline. Bloomberg
[Editor's Note: If all three file for bankruptcy it is quite possible all three may be forced out of NASCAR, which could destroy the series. Alternatively we could see a 43-car Toyota field. Just change the headlight and front grille decals. The fans don't care what is under the hood.]