Obbligazioni societarie GM, Ford, Chrysler: il 3D dell'automotive USA (1 Viewer)

[paologorgo]

GMAC resembles a bank about as much as I resemble Tom Cruise

The biggest loser on the stress test was clearly GMAC. It needs to raise $11.5 billion in capital, which is about half of its current equity. Unlike the commercial banks, it has no earnings power -- it lost $675 million in the first quarter. Yet per Tim Geithner and Ben Bernanke, none of the banks among the 19 will be allowed to fail.
That would seem to mean that come hell or high water, GMAC will continue to exist, probably due to more government money. Keep in mind that this company wasn't even a bank until the Fed looked the other way and approved its application for bank holding company status in December. Let's review a few details.
First, GMAC resembles a bank about as much as I resemble Tom Cruise. It's a mostly failed subprime mortgage bank and an auto finance company. Several years ago, GM in a fit of sanity sold it to Cerberus which was operating without benefit of firing synapses.
As the financial crisis accelerated, its mortgage portfolio turned toxic and began to poison the entire company. It's only hope was a federal bailout so it lined up in front of the Fed with its application to become a bank in hand.
Since the government was knee deep in bailing out GM at that time and even they could figure out that they needed someone to keep on financing GM's cars, the Fed said OK with a condition. Get 75% if your bondholders to convert their debt to equity.
Then began an agonizing series of deadlines for the bondholders to convert. So the company put the creditors on notice that it was convert or BK and the creditors called their bluff. Deadlines came and weren't met and new ones were established. Then in mid-December the Fed delivered a Christmas present. They approved the BHC application. Later we learned that only 52% of the bondholders ever agreed to the debt for equity swap.
The TARP money flowed in, GMAC became a bank and PIMCO and the rest of the holdouts smiled secure in the knowledge that they were now home free. No one was messing with the creditors of banks, not even the Treasury or Fed.
Fast forward to today. Oh, wait a minute. In the meantime, Chrysler Credit folds and GMAC announces it will take over financing for all Chrysler products as well as GM cars. Now GMAC is the go to guy for the new shareholders of GMAC and Chrysler. Anyway, GMAC is now branded as the worst of the Group of Nineteen and has to come up with capital.
Can it pull it off? Of course not. Who would want anything to do with a company that's hemorrhaging money, probably still has a boat load of toxic mortgage assets and is going to say how high when either the government or the UAW say jump.
On second thought, sure it can pull it off. GMAC is leading a charmed life. There is one investor that desperately needs them to hang around and they have the ultimate deep pockets. The federal government will dig down again, put some more money on the table and GMAC will be recapitalized. How else are you going to sell green cars to people that don't want them if you don't have a finance company to give money away.
So one compromise begets another and another and another. Don't think for a moment that the recapitalization of GMAC will be the last compromise.

http://seekingalpha.com/instablog/1...-was-the-big-stress-loser-but-they-ll-be-fine

 

[c0ltran3]

Una breve sintesi sull' andamento mercato dell' auto negli USA.

 

[paologorgo]

This is pretty much exactly what we wanted, right? Chrysler gets the benefits of bankruptcy — such as being able to restructure its obligations to its dealer network — while the holdout creditors, who pushed Chrysler into bankruptcy in the first place, get less than they were initially offered by the Obama administration.
I do wonder what that means for the prospects of a GM bankruptcy. On the one hand, would-be holdouts are unlikely to make the same mistake twice. But on the other hand, there are so many more of them that the collective-action problems of getting a successful restructuring done out of bankruptcy are pretty much insurmountable. I think the best-case scenario for GM, just as with Chrysler, is a quick bankruptcy with little fractiousness from bondholders. The chances of avoiding bankruptcy outright seem slim indeed: the bigger risk is that bankruptcy will drag on to the point at which GM can no longer emerge from it as a going concern.

http://seekingalpha.com/article/136621-chrysler-bankruptcy-going-according-to-plan?source=yahoo

se si vuole cercare di fare una analisi di cosa può significare il precedente del Chapter 11 chrysler in vista della ristrutturazione del debito di GM, si possono fare alcune riflessioni:

i creditori di chrysler erano privilegiati. al di là dell'offerta (meno di 30 centesimi) fatta dall'azienda (o forse dovremmo dire dalla task force...), il pensiero di chi non ha accettato è stato: non ci va bene che il sindacato, che ha un credito che è sicuramente subordinato, se ne esca meglio di noi, con una partecipazione azionaria dell'azienda risanata riducendo fortemente il nostro credito, etc. etc. - in ch 11 riceveremo di più (noi siamo privilegiati).

comunque la si voglia pensare, non ha funzionato. la procedura del ch 11 consente al management di istituire la vendita della "good company", che è stata costruita per rispecchiare esattamente la soluzione iniziale. il rischio è il rilancio. in realtà, Fiat e Co. (se come sembra saranno i soli a partecipare alla vendita) se ne avvantaggeranno, perchè i "problemi" resteranno in carica ai creditori (privilegiati, primi nella distribuzione, ma che riceveranno meno della offerta iniziale dalla vendita della good company, e si tengono i problemi, da cui difficilmente otterranno un vantaggio economico).

cosa ci insegna questo per GM? che se non ce la fanno i creditori privilegiati, è difficile che ce la possono fare gli unsecured, a sostenere e dimostrare che vengono lesi i diritti di "precedenza" del credito. e lo sfaldamento del fronte "anti-offerta" appena giunti in ch 11, che probabilmente non erano stati avvertiti fino in fondo sugli aspetti tecnici della procedura, ed i rischi sui andavano incontro, oltre alla moral suasion dei rischi di andare contro decisioni del Governo (ma a questo dovevano pensarci prima...).

il problema di GM è che non si ha a che fare con banche ed investitori professionali, che analizzano la questione e fanno la scelta "meno penalizzante", ma anche con tanti investitori privati, che possono fare considerazioni diverse. quanto valgono i bond che gli viene chiesto di convertire? come leggevo su un blog, valgono quello che i titolari pensano che debbano valere, e se la proposta dell'azienda sembra penalizzare le loro aspettative, ci può essere la voglia di vedere come andrà in corte.

 

[paologorgo]

Long road to a ‘good GM’ filing


Flushed with the immediate tactical success of the Chrysler bankruptcy, the US administration’s plans for the subsequent GM filing are moving forward, along the lines laid out a couple of weeks ago. The White House’s auto task force, with the UAW, the car workers’ union, behind it, could have had a quick, consensual trip in and out of court, but apparently that wasn’t what they wanted.
The “363” plan (a provision under the Bankruptcy Act that allows the company to sell assets), is the means for a “good GM” funded by the government to buy assets from the existing company, or “bad GM”. The plan, based on a review of some fairly clear precedents from past cases, is a legally flawed way to disregard the rights of certain creditors – in GM’s case, their public bondholders.
The unsecured bondholders are being offered somewhere between 4 and 5 cents on the dollar for their claims. In contrast, unsecured claims (with equal legal rank) by the union retirees’ healthcare plan are being offered a recovery of 74 cents on the dollar.
Nevertheless, the plan will probably work, in the sense of achieving the intended short-term effect. The key to the tactic’s success is not its integrity, but the current lack of available exit financing for companies emerging from bankruptcy.
The 363 loophole, (really 363(b)), was intended to give a judge the authority to allow for the quick disposal of wasting assets, or assets that are not part of the core business, without waiting for creditors to vote their permission. It was not intended as a way to impose what is called a “sub rosa plan of reorganisation”. That is a plan of reorganisation of the entire company on which creditors do not get a vote.
In GM’s case, the “sub rosa plan” is to sell the valuable assets, with accompanying union contracts, to a new, “good” GM, and leave the money-losing assets in the original company, which is left in the street to bleed cash and die.
GM’s law firm, Weil Gotschal, has attempted to use this section of the bankruptcy code in the past, and had only mixed success in doing so. For example, a bankruptcy judge in New York ruled against a similar Weil Gotschal tactic in the Westpoint Stevens case, saying: “The fact that a transaction including a 363(b) sale of assets may ultimately be in the best economic interests of a debtor’s various constituencies does not authorise the court to ignore the creditors’ rights and procedural requirements of Chapter 11.”
Here’s how I believe the GM bankruptcy case will play out. The government, the UAW and GM are in a good position to “forum shop”, or find a bankruptcy judge who will be sympathetic to the government-UAW plan. That judge may be in New York (convenient for Weil Gotschal, headquartered in New York’s GM building), or Michigan (hometown advantage for GM). That judge will almost certainly grant the request of GM, the union and the government for the 363(b) sale.
Then the bondholders do some forum shopping of their own. They could well find a judge in a Federal district court (one level up from bankruptcy court) willing to grant a temporary restraining order blocking the 363(b) sale.
Given the facts of the case, and the precedent on the side of the bondholders, I think it’s quite possible that the judge will issue a TRO, and set a hearing on a motion by the bondholders to enjoin the sale.
That will be the end of the good news for the bondholders. The judge will read through the law, and the facts, and then ask an unpleasant question of the bondholders: what’s your alternative?
They won’t have one. There will be a great deal of back and forth, but at the end of the day the bondholders need – not just the law – but a big cheque book on their side, and the money isn’t there. Not for the $35bn (£23bn, €26bn) or so they would need to pay off the government and step into its commanding position.
Their problem is that the US government will be offering not just working capital for GM during its bankruptcy, but “exit financing” for GM’s emergence from Chapter 11. That is hard to get now on commercial terms, even on a smaller scale than would be needed for GM.
There are other problems with the government/union plan. The suppliers to the remaining “good” brands will need to spread their fixed costs over fewer parts, and transferring and revising all the contracts is logistically very difficult. Getting effective, decisive management, when the major shareholders have made unconvincing pledges to be hands off and avoid conflicts . . . very uncertain.
The bondholders still fight a hard, continuing, rearguard action, since they have little or nothing to lose, and want to preserve their rights and legal precedents for future reorganisations.
If the administration and the union had just richened the deal offered the bondholders from 4-5 cents to maybe 10-12-15 cents on the dollar, they might have got an agreed, prepackaged deal, and avoided a lot of sturm und drang.

http://www.ft.com/cms/s/0/c28d427c-...ance&ft_ref=yahoo1&segid=03058&nclick_check=1

 

[paologorgo]

GM Hires Search Firm for New Board

By JOANN S. LUBLIN and JOHN D. STOLL

General Motors Corp. has hired an executive-search firm to help find replacements for at least half of its 12 directors, reflecting the Obama administration's increasing influence over the auto maker.
Interim GM Chairman Kent Kresa has hired New York-based Spencer Stuart to help him in a bid to line up new directors to join the board as early as this summer, according to people close to the situation.
Mr. Kresa, along with GM Chief Executive Fritz Henderson, was named to his post in late March by the U.S. Treasury Department after the government forced out the former chairman and CEO, Rick Wagoner.
Messrs. Kresa and Henderson have been subject to strong government oversight in the weeks they've been running the company. In this case, Mr. Kresa was hoping to conduct the board search on his own, without the assistance from an outside search firm, the people close to the situation said. In early April, President Barack Obama's automotive task force told the company to begin planning for a so-called 363 sale in bankruptcy court, and also dictated the terms of GM's new capital structure that was announced late last month. Under a 363, GM could split into two parts -- a good company and bad company -- with all of the undesirable assets being wound down in the bad company.
Because the government could own a controlling stake in the new GM, or in the non-bankrupt company if it avoids a Chapter 11 filing, it is expected to name a small portion of the directors in addition to Mr. Kresa's picks to represent the Treasury Department. The United Auto Workers union, which has been offered 39% of GM in exchange for health-care concessions, will likely get to pick at least one board member in the future, according to people familiar with the matter.
Spencer Stuart, one of the largest U.S. executive search firms, has advised or is advising board searches taking place at several companies accepting Treasury funding in recent months. Those companies include Citigroup Inc., American International Group Inc. and GMAC LLC.
Mr. Kresa has a deep base of contacts after several years on GM's board, a tenure as chief executive of Northrop Grumman Corp. that ended in 2003, and a stint as a director at Chrysler. He had planned to rely on his professional network to conduct the search.
But officials at the Treasury, which has lent GM $15.4 billion, "strongly" suggested that Mr. Kresa choose Spencer Stuart for GM's board search, telling him that the search firm "can do it quickly," said a person close to the matter. They told Mr. Kresa he would be contacted by Tom Neff, head of the firm's U.S. operations, this person said.

Kent Kresa

The men spoke, and "the deal was done," this person said. In seeking new directors, Spencer Stuart's Mr. Neff deals mainly with Mr. Kresa, according to this individual. "The client is the chairman of the board of GM," rather than Treasury, this person emphasized. But Mr. Kresa didn't feel he had much leeway in choosing Mr. Neff. "Kent had Tom foisted on him," according to another knowledgeable person who recently spoke with Mr. Kresa.
Mr. Kresa did not return calls seeking comment.
A Treasury spokeswoman declined to comment on the matter directly, but said the Task Force is working collaboratively with GM on matters related to its board.
Many of GM's directors have been on the board since before the company sank into trouble in 2005, including Mr. Kresa. It has reported losses of more than $80 billion since then. Mr. Henderson joined the board last month when he replaced Mr. Wagoner as CEO.
Under the government's plan for GM, at least six of the directors will be replaced. GM's board has been the subject of intense scrutiny for several years, and was publicly criticized by shareholder activist and former board member Jerome York in 2006 for being too passive and not pushing management for enough details.
When GM's new board actually takes over depends on whether GM files for Chapter 11 bankruptcy protection. The new board would not take over until after GM emerges from bankruptcy protection, one person said. If GM avoids bankruptcy, the company's new directors will likely be voted on during an annual meeting, slated for Aug. 4.
The auto maker last month launched a debt-for-equity exchange that closes May 26. GM has said it will file for Chapter 11 around June 1 if the offer fails to erase 90% of the company's $27 billion in unsecured bonds.
The exchange offer has garnered little public support from bondholders thus far, and GM officials and the task force are increasingly leaning toward a bankruptcy filing. They aim to wrap up the entire bankruptcy case in 30 days to 60 days, according to several people involved in the company's planning.

http://online.wsj.com/article/SB124199416094004699.html?ru=yahoo#mod=yahoo_hs

 

[paologorgo]

U.S. Forced Chrysler's Creditors to Blink

President Barack Obama's auto task force heard a blunt message early this spring from J.P. Morgan Chase & Co., the largest lender to Chrysler LLC. In any deal to remake the troubled auto maker, Chrysler would have to repay its lenders all $6.9 billion it owed.
"And not a penny less," said James B. Lee Jr., vice chairman at the bank, in a call to auto task-force boss Steven Rattner on March 29.
The next day, Mr. Obama called the banker's bluff. The president stepped before a podium to announce that Chrysler could face a disorderly bankruptcy or even liquidation. His meaning was clear: If that happened, the lenders would get nowhere near $6.9 billion.
A few hours later, Mr. Lee called Mr. Rattner back. "We need to talk," he said.
The banker's about-face was a vivid example of the government's tightening grip on a humbled financial industry. Pulling a trick from the hedge-fund playbook, the government used its leverage as the sole willing lender to Chrysler, either in bankruptcy court or out, to extract deep concessions from some of the country's biggest banks.
The results of these hardball tactics were on display Friday, as the last resisters of a deal to slash the value of Chrysler debt abandoned their effort to fight it in bankruptcy court. That raised the chances for a relatively swift transit through Chapter 11, producing a new Chrysler 55%-owned by a trust for union retirees, 35% by Fiat SpA -- which hasn't even been a Chrysler creditor -- and not at all by the senior secured lenders.
That conclusion would upend a longstanding tradition concerning rights in a bankruptcy: Senior secured lenders usually get paid in full before lower-priority creditors get anything. Not this time.
The White House's role in restructuring Chrysler has sent a shudder through the community of lawyers and lenders in the field of bankruptcy and corporate workouts. Critics complain that the administration has violated a bedrock principle of American capitalism and unfairly demonized financial firms that are vital to the functioning of the economy and its eventual recovery.
Administration officials reply that the Chrysler crisis required bold action. While Chrysler's suppliers, dealers and unionized workers are critical to its survival -- and so is Fiat, which will contribute high-efficiency engines and foreign distribution -- the creditors were expendable.
"You don't need banks and bondholders to make cars," said one administration official.
The administration could exert such leverage because it was convinced big banks were too tarnished in the public eye to put up a fight. They risked being blamed for Chrysler's demise. And if Chrysler had to liquidate, they and other lenders would have to try to recover their money by selling closed auto plants and other assets that are little in demand.
Mr. Rattner forced the issue during the spring negotiations. More than once, he told Mr. Lee: "You can have the company and run it or liquidate it."
This account of the fight among Chrysler, its lenders and the government is based on interviews with dozens of people involved in the negotiations, including bankers, financial advisers, lawyers, union and Chrysler officials and Obama aides.
The struggle began last year when Chrysler and General Motors Corp. faced a potential meltdown. Chrysler went to the lenders that held 70% of its debt -- J.P. Morgan, Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley. It wanted to know if they would lend more and if they would provide financing in case Chrysler filed for bankruptcy.
When they said no, the auto maker turned to Washington. Just before Christmas, the Bush administration agreed to lend Chrysler $4 billion, as well as $13.4 billion to GM. The Treasury gave Chrysler three months to reduce its debt and forge a cost-cutting agreement with the United Auto Workers union.
Chrysler turned to the lenders it had just been asking for new loans, but now asked them to agree not to get paid in full for their old loans. It wanted them to chop the $6.9 billion debt to $5 billion. At a meeting in early February, Mr. Lee and other bank executives rebuffed the request. With the government getting so involved in supporting Chrysler, the banks held out for talks with federal officials.
The Obama administration's auto task force held scant hope that all of Chrysler's lenders would agree to a compromise. There were 46 debtholders in all, including many small hedge funds and distressed-debt funds. Most of these had acquired their holdings at a discount on the secondary market. With no consumer operations, they had less reputation on the line than the banks did. In addition, unlike banks, they didn't have to worry about saving Chrysler in order to salvage other loans, to parts suppliers and to Chrysler Financial.
The task force's Ron Bloom, a former investment banker and steelworkers-union negotiator, agreed to handle talks with the UAW and Fiat. Mr. Rattner, co-founder of private-equity firm Quadrangle Group, would take on the lenders. He soon butted heads with Mr. Lee. Known on Wall Street for his suspenders, white collars and deep Rolodex, Mr. Lee, as the senior deal maker at J.P. Morgan, has lent more money to more companies than almost anyone else on Wall Street.
J.P. Morgan faced by far the most Chrysler exposure: $2.7 billion of debt. Monitoring the situation, J.P. Morgan Chief Executive Jamie Dimon called Chrysler Chief Executive Robert Nardelli several times.
Mr. Lee's March 29 demand for full repayment reflected a common view among the creditors. "You lend someone $6.9 billion, you would like $6.9 billion back," said one.
Many of the lenders believed the administration wouldn't let Chrysler file for bankruptcy. "The plan was to call the government's bluff. The game was to game the government," said a manager of a distressed-debt fund.
Then came President Obama's tough talk about the possibility of Chrysler going into bankruptcy or even liquidation, which came just hours after the administration pushed out GM's chief executive, Rick Wagoner. Acting like a bank that is a troubled firm's last hope, President Obama sketched out what Chrysler would have to do to get more federal money.
When Mr. Lee spoke to Mr. Rattner again on March 30, the J.P. Morgan man acknowledged the landscape had changed. He sought a meeting that would bring the lenders to Washington.
Chrysler's four main lenders were already indebted to the Treasury as recipients of loans from the Troubled Asset Relief Program, the government's pool of emergency aid to financial-system titans. Citigroup had received $45 billion; J.P. Morgan, $25 billion; and Goldman and Morgan Stanley, $10 billion each.
Obama aides say they were under White House orders not to use TARP as leverage over the banks. Lawmakers weren't so shy. Rep. Gary Peters, a Democrat whose Michigan district includes Chrysler offices, wrote to the bank CEOs listing their TARP loans and asking them to extinguish most of Chrysler's debt.
Mr. Rattner hosted a meeting of senior bank officers on April 2, in an ornate conference room at the Treasury. They heard presentations from Chrysler's Mr. Nardelli and Fiat Chief Executive Sergio Marchionne. The more than 25 listeners were told that deals with Fiat and the UAW were nearly complete.
When the issue of the $6.9 billion in debt came up, Mr. Rattner looked at the lending group and said, "We have in mind for you a much lower number." He silenced the room by proposing they get just $1 billion.
While that wasn't the administration's bottom line, the task force had determined what was: the amount lenders would get in a liquidation of Chrysler assets. A Chrysler analysis in January estimated that at $2 billion. The UAW and Fiat knew about this figure, and also knew that the task force was first going to offer lenders just $1 billion. But the lenders, having waited so long to engage with the Treasury, were in the dark.
The bankers asked the government team for projections of what a combined Chrysler-Fiat alliance would look like. "If you want a response other than 'No,' something like a counteroffer, then we need those new numbers," Mr. Lee said, according to people present in the room.
In the following days, the lenders began to realize their leverage was small and dwindling. Only the government had the ability or willingness to finance a bankruptcy reorganization of Chrysler, while also supporting its warranties and suppliers and recapitalizing Chrysler Financial. None of the lenders, some of which had consumer operations in the Midwest near Chrysler plants, had any desire to take over and liquidate the company.
Mr. Lee had another problem. Unrest was spreading among creditors as some worried that TARP-recipient banks were open to cutting a deal with the Treasury. Some lenders that hadn't gotten TARP money decided to hire their own lawyer. To calm the smaller debtholders, the banks on April 10 allowed three of them on the group's steering committee: OppenheimerFunds, Stairway Capital Management and Perella Weinberg Partners' Xerion Fund.
The Chrysler-Fiat projections sought from the Treasury didn't arrive until Easter, April 12. By then, deals with Fiat and the UAW had largely been hammered out.
The lenders spent a week haggling over how to respond to Mr. Rattner. The big banks at first proposed the group offer to cut the debt in half and get no equity stake. That outraged some hedge funds and distressed-debt firms that didn't face the banks' broader concerns and that were accustomed to fighting in the trenches for their interests. The reply, sent April 20, reflected the hardening position of the hedge funds: The lenders would cut just $2.4 billion in debt, in exchange for 40% of Chrysler's equity.
The offer landed with a thud. Rep. Peters said the lenders were seeking much more than market value for their debt, "which amounts to a taxpayer subsidy." It was just 10 days until the government's deadline to reach agreements with the UAW, Fiat and lenders if Chrysler was to get more government money.
After receiving one more bank counteroffer, the Treasury on April 28 offered what it had planned all along, to buy out the lenders for $2 billion. The only sweetener was that it would be in cash, meaning the lenders didn't have to wait for a reorganized Chrysler-Fiat to pay it.
Mr. Rattner called Mr. Lee: "It's $2 billion, take it or leave it."
The big banks quickly agreed to the deal -- equal to 29 cents on the dollar. Though that offered a profit to a few firms that bought debt as low as 15 cents on the dollar, most of the lenders had paid 50 cents to 70 cents, and the banks 100 cents. News that the big banks were accepting the offer leaked before they had told the smaller lenders. "To say the least, we were floored," says one.
Mr. Lee was nonetheless intent on winning 100% approval from debtholders, to give the government the option of avoiding a Chrysler bankruptcy filing. He asked the Treasury to raise its offer by $250 million, which it grudgingly agreed to do if the lenders answered within 90 minutes. After a flurry of last-minute calls, about 20 firms, mostly small hedge funds, voted no.
At noon the next day, April 30, Mr. Obama said Chrysler would file for bankruptcy. He blamed "speculators" who had turned down the $2 billion offer for their $6.9 billion of debt. A lawyer for holdout firms, Tom Lauria, accused the White House of threatening to destroy the reputation of Perella Weinberg. The White House denied exerting pressure on it. Mr. Lauria's clients took their fight into bankruptcy court last week, imperiling the administration's plan to guide Chrysler into and out of court swiftly. But on Friday, the holdouts abandoned the fight as too costly, financially and politically.
"The overarching sense of political pressure," Mr. Lauria said, "remained out there till the end."

http://online.wsj.com/article/SB124199948894005017.html?ru=yahoo#mod=yahoo_hs

 

[paologorgo]

lunghina, ma interessante. ne posto solo un pezzo (FORD):

'Pretty relentless'
Mulally, who was hired as CEO in September 2006, hasn't engineered, designed, or built any cars. But he has devised a plan that identifies specific goals for the company, created a process that moves it toward those goals, and installed a system to make sure it gets there. Mulally watches all this with intensity - and demands weekly, sometimes daily, updates. "Alan's style is pretty relentless," says chief financial officer Lewis Booth, a 31-year Ford veteran. "He says, 'If this is the reality, what are we going to do about it?' not 'We're going to work our way through it.'"
The Mulally method has pointed Ford to some smart strategic moves. Sensing a recession in 2006, Mulally decided to borrow $23.6 billion against Ford's assets. Piling on more debt wasn't an easy call, but the extra cash meant that Ford could say no to government loans when sales fell apart last year. Mulally is moving to integrate the company globally, despite several failed attempts in the past. In 2010, Ford will be selling small cars in the U.S. that were developed in Europe. Mulally persuaded Bill Ford to dispose of Jaguar and Land Rover and focus its resources on the Ford brand, and by moving quickly he managed to sell them to India's Tata in 2007 when there was still a market for makers of luxury vehicles. He took longer to untangle Volvo from the rest of the company, but he has now put that up for sale too.
Those moves have helped Ford separate from GM and Chrysler, and Mulally is pumped. "As we come through this, we're going to be a turbo machine on the other side," he says. He has promised that Ford's core North American operations, as well as the entire company, will turn profitable by 2011. It had better, because it can't keep losing money indefinitely. Ford recorded a loss of $14.7 billion last year and another $1.4 billion in 2009's first quarter.

http://money.cnn.com/2009/05/11/news/companies/mulally_ford.fortune/index.htm?source=yahoo_quote

 

[yellow]

11.05.09 12:28 - Gm: ok Consob a documento su Opsc obbligazioni
ROMA (MF-DJ)--La Consob ha approvato la pubblicazione del documento di offerta relativo all'offerta pubblica di scambio volontaria avente ad oggetto prestiti obbligazionari emessi da General Motors Corporation a fronte di azioni di nuova emissione.

E' quanto si legge sulla newsletter settimanale.


Il documento, al quale e' allegato il prospetto informativo approvato dall'autorita' di vigilanza del Regno Unito (Fsa), e' stato approvato anche in conformita' alla procedura prevista sulle offerte pubbliche di scambio aventi ad oggetto titoli obbligazionari promosse contestualmente in piu' Paesi dell'Unione europea.


L'offerta di scambio promossa dalla General Motors si inserisce nel contesto di un piano di ristrutturazione del debito concordato con il governo degli Stati Uniti.


L'offerta e' rivolta al pubblico indistinto negli Usa e in Canada, nel Regno Unito, nel Lussemburgo, in Germania, Austria, Francia, Belgio,
Italia e Svizzera;
a investitori qualificati, ai sensi della normativa locale, in altri Paesi europei e non.


L'offerta ha ad oggetto 28 prestiti obbligazionari convertibili e non convertibili emessi direttamente dalla societa' offerente, ovvero dalla controllata General Motors Nova Scotia Finance Company, societa' finanziaria interamente controllata da Gm.


Il valore nominale complessivo delle obbligazioni oggetto dell'offerta ammonta a 27,2 miliardi di dollari.


Nessuna delle vecchie obbligazioni e' quotata in Italia, mentre quattro emissioni -di cui due denominate in euro e due in sterline- risultano quotate alla borsa del Lussemburgo.


Il corrispettivo offerto e' pari a 225 azioni ordinarie Gm di nuova emissione per ogni 1.000 dollari statunitensi di valore nominale delle vecchie obbligazioni.


Nel caso che la totalita' delle obbligazioni sia conferita, il corrispettivo complessivo sara' pari a circa 6,1 milioni di nuove azioni.


L'offerta di scambio e' soggetta al verificarsi o alla rinuncia di una serie di condizioni,
inclusa la circostanza che i risultati delle adesioni siano soddisfacenti per il Tesoro statunitense.


GM si riserva inoltre la facolta' di revocare l'offerta.


Il periodo di offerta negli Stati Uniti e' iniziato il 27 aprile, negli altri Paesi europei il 28 aprile 2009.


In Italia l'offerta ha avuto inizio il 6 maggio e, come negli altri Paesi, terminera' il 26 maggio 2009.

 

[paologorgo]

Welcome to our coverage of this morning’s conference call with Fritz Henderson, the chief executive of General Motors. There are three weeks remaining until G.M.’s June 1 deadline to reduce its debt and expenses significantly, and the carmaker has recently resumed negotiations with the United Automobile Workers and offered to swap equity for some $27 billion in debt held by bondholders.
But consensus is growing here in Detroit that G.M. will fail to meet all of the Treasury Department’s guidelines and almost certainly have to follow Chrysler into bankruptcy. G.M. last week revealed that in the first quarter it burned through $10.2 billion of its cash reserves, two thirds of the $15.4 billion it has borrowed from the government since December.
Nick Bunkley is live-blogging the call, with the most recent posts at the top.
10:00 a.m. | Treasury Dictated Terms for Bondholders: Mr. Henderson said the Treasury told G.M. to offer its bondholders up to a 10 percent stake in the company in return for the $27 billion in debt that they hold but did not give a reason why. Bondholders have said the stake is too small compared to what others are receiving. The current plan calls for 89 percent of a restructured G.M. to be held by the Treasury and the U.A.W.
“They didn’t support us going above 10 percent,” Mr. Henderson said. “We went to the maximum that they permitted us.”
That was the final question, so we’ll end our live blog here. Stay with the Times for more coverage of G.M. and any other developments in the auto industry throughout the day.
9:56 am. | Treasury ‘Supportive’: Mr. Henderson told the Times’s Bill Vlasic that the Treasury Department is “supportive of the actions the company is taking” but that government officials are still reviewing G.M.’s latest plan and have not said whether it is aggressive enough. The Obama administration rejected the plans that G.M. and Chrysler submitted in February.
9:54 a.m. | Bankruptcy ‘Probable’: Mr. Henderson still insists that bankruptcy is not a foregone conclusion, though he concedes there is a lot to do in very little time.
“Certainly the task that we have in front of us is large, but we know that we can get it done,” he said. “Today it’s more probable that we would need to resort to a bankruptcy process. But there’s still a possibility and an opportunity for it to be done outside of a bankruptcy.”
9:48 am. | Dealer Closures to Take Time: G.M.’s plan to cut 42 percent of its dealerships will take longer than “weeks or months,” Mr. Henderson said. He said redistributing the inventory of vehicles at those dealerships and closing the stores requires more time than that.
9:45 a.m. | Two Bidders Vying for Hummer: G.M. received three bids for the Hummer brand and is in talks with two of those bidders, Mr. Henderson said. He did not name the bidders. A sale could occur by the end of this month, he said.
He gave little insight into the status of talks to sell Saturn and Saab.
9:40 am. | No Changes to Bond Exchange Offer: Mr. Henderson said G.M. does not intend to sweeten its bond exchange offer, which many analysts have described as being destined to fail.
He declined to answer questions about the status of talks with the U.A.W. and efforts to sell the Opel division in Europe.
9:35 a.m. | A headquarters move?: Mr. Henderson dismissed — sort of — speculation that G.M. might move its headquarters out of Detroit’s Renaissance Center. There have been several rumors to that effect, and last week the mayor of Warren, a suburb, said he is urging G.M. to move its corporate offices to the sprawling G.M. technical center campus in that city.
“We’re looking at frankly everything in our business,” Mr. Henderson said. “At this point I don’t have anything to report. Our headquarters is here, and we’re happy to be here.”
Pressed further, Mr. Henderson continued, “We don’t have that in our plans, but if we did it would be motivated by business rationale.”
9:32 a.m. | No ‘Real News’: G.M.’s chief spokesman, Steve Harris, starts out by announcing that today’s call is merely to provide an update on how the restructuring is going. “We don’t have any real news to be honest with you,” Mr. Harris said.
9:15 a.m. | Three Weeks Left: We will hear this morning from Mr. Henderson, who has said bankruptcy is probable but not necessarily inevitable. Two weeks ago, Mr. Henderson announced drastic cost-cutting steps that G.M. is planning by the end of next year, including the closure of 13 plants, the elimination of 21,000 factory jobs and the shedding of about 2,600 dealerships across the United States. Dealers who will not be part of G.M.’s future should start getting letters telling them the bad news as soon as today.
Mr. Henderson likely will provide an update on that effort, as well as G.M.’s talks to sell three of its eight brands — Saturn, Saab and Hummer – by the end of this year. A fourth brand, Pontiac, is now scheduled to close in 2010.
This will be the first time that Mr. Henderson has spoken about G.M.’s restructuring since Chrysler filed for bankruptcy protection on April 30. Last week, on a conference call to discuss G.M.’s $6 billion first-quarter loss, the company’s chief financial officer, Ray Young, said executives “are closely following the Chrysler proceedings in case we have to go through a process similar to that.”
But Mr. Young said G.M. still prefers to restructure without filing for bankruptcy.

http://dealbook.blogs.nytimes.com/2...g-the-gm-conference-call/?partner=rss&emc=rss

 

[paologorgo]

chapeau.

Ford to Sell New Shares in Show of Strength

By MATTHEW DOLAN

Ford Motor Co. will offer 300 million common shares in a public offering designed to shore up the car maker's cash reserves and keep the company out of bankruptcy as its crosstown rivals struggle to restructure.
Ford's move -- which could raise $1.7 billion to $2 billion -- indicates the company believes investors will pin their hopes on it as General Motors Corp. and Chrysler LLC are consumed by uncertain reorganizations. Ford believes raising the cash is worthwhile despite any backlash from current stockholders who fear their shares will be diluted.
The auto maker's stock sale "will make people more confident about its future and raise confidence that Ford can avoid bankruptcy," said John Casesa, an auto analyst with Casesa Shapiro Group in New York.
Unlike GM, Ford has been able to secure an agreement with the United Auto Workers union to lower labor costs by $500 million annually. Ford also cut its debt by $9.9 billion to $25.8 billion as of April 8, and lowered annual cash interest payments by more than $500 million through agreements with debtholders.
"We continue to make strong progress on our transformation plan -- gaining retail market share with great new products, improving quality, reducing costs and positioning Ford for a return to profitability," Ford Chief Executive Alan Mulally said in a statement.
Ford, facing nearly $10 billion in health costs for retired union workers, now may make up to half its contributions to a trust for such payments in stock rather than cash. But the new terms, worked out with the UAW, also could dilute the company's shares, though they are based on a stock price no higher than $2.20.
The company said in a government filing Monday that proceeds from the stock offering are expected to fund its cash obligation to the health-care trust.
Ford is taking advantage of a market rally that has sent its shares up nearly fourfold in 11 weeks. Ford shares are trading at the same price as last summer, before the financial crisis worsened and auto sales collapsed.

The move to sell shares widens the gap between the company and GM and Chrysler. GM's shares have continued to slide as investors bet the stock will be worthless in an expected bankruptcy.
At Chrysler, which filed for bankruptcy last month, not only were the private-equity holders that controlled the company wiped out, but the senior secured lenders, who rarely lose money in a bankruptcy, suffered big losses.
The Ford stock offering is set to price after the market closes Tuesday. Typically, companies don't announce offerings unless they are confident they can sell the shares at a reasonable price.
If the shares are sold at a price far below Monday's closing price of $6.07, it would be a sign that Ford overreached. In after-hours trading, Ford shares fell 33 cents, or 5.43%, to $5.75. Such stock sales are often done at a discount of about 5% to the market price.
As part of the deal, Ford plans to grant the underwriters a 30-day option to purchase as many as 45 million shares in addition to the public offering of 300 million shares. The sale will be led by four of the top underwriters on Wall Street -- Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley.
The Ford issue would be the second-largest stock sale by a nonfinancial company this year, after a $2.25 billion sale priced last Wednesday by Dow Chemical Co., according to Dealogic, which tracks stock issues.
Ford has 2.9 billion shares outstanding, including 70.9 million Class B shares used by the Ford family to control the company.
Last month, Ford posted a net loss of $1.4 billion, or 60 cents a share, for the first quarter, a reversal from net income of $70 million, or three cents a share, in 2008's first quarter.
But the loss was lower than analysts expected -- and noticeably better than Toyota Motor Co.'s results -- and a marked improvement from Ford's $5.5 billion loss in last year's fourth quarter. Revenue fell 37% to $24.8 billion.
The results reflect in part Ford's strategy: to steal customers from its weakened domestic rivals and separate itself from GM and Chrysler in the minds of the public, investors and lawmakers. Unlike GM and Chrysler, Ford hasn't taken a U.S. handout.
Nonetheless, Ford is suffering from one of the worst car markets in history. Its monthly sales have fallen year over year by more than 30% since the start of 2009. Since Mr. Mulally became CEO in 2006, Ford pulled back from its promise to return to profitability in 2009 and has lost $31.4 billion.
Ford insists it is on track to break even in its critical North America operations by 2011.

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