Thursday, March 19, 2009

Automakers Face Bankruptcy

Half of U.S. auto suppliers face bankruptcy: study

Reuters — More than half of the top U.S. auto parts suppliers could file for bankruptcy protection in 2009 with at least one million job losses, according to a study by global consultants A.T. Kearney.
Those suppliers, which ship parts directly to automakers, are pressured from above by production cuts by the automakers and from below by increasingly fragile companies that supply them with components, the study found.
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U.S. Treasury unveils $5 billion aid for auto suppliers

The Detroit News — The Treasury Department agreed today to provide up to $5 billion in financing for cash-strapped auto parts suppliers -- a move that could help stave off collapse of many major suppliers.
A credit-insurance program run through General Motors Corp. and Chrysler LLC will allow suppliers access to "government-backed protection that money owed to them for the products they ship will be paid no matter what happens to the recipient car company."
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Auto supplier shares leap on bailout news

Reuters — News that the U.S. Treasury had pledged up to $5 billion in financing support to struggling auto suppliers sent shares in auto parts makers soaring on Thursday.
The price of Lear stock more than doubled shortly after the news, before slipping to $1.25, or 75 percent above the stock's Wednesday close on the New York Stock Exchange of 72 cents.
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