Posted by: Moon Ihlwan on May 29
Three days before a government-imposed restructuring deadline, GM’s board of directors mulls ways to win concessions from various parties, a strategy that would help the company quickly exit from bankruptcy protection if it files for Chapter 11 reorganization on Monday.
Bankruptcy experts say the more operational, labor and financial concessions the automaker secures in advance of a Chapter 11 filing, the faster the ailing automaker can emerge a leaner, stronger company. Workers across the country won’t know until Monday which 14 plants GM will close or where the 21,000 more layoffs will come. An announcement on the fate of GM’s Hummer brand is expected Friday, when talks are scheduled to resume in Germany about the future of GM’s European Opel unit.
Source: Associated Press
Japan’s factory production surged the most in 56 years in April as a rebound in exports helps the economy emerge from its worst recession since World War II. The big output gains reflect how much companies had cut back at factories and refineries in recent months to rid themselves of a growing inventory of products. Output rose 5.2% from March, the second monthly gain, the Trade Ministry said. Companies said they planned to boost output in May and June as well.
In another upbeat development in Asia, the Indian economy grew a better-than-expected 5.8% in the three months to March. That was a relief for re-elected Prime Minister Manmohan Singh, as he tries to keep his country chugging along despite a global recession. For the full year, the economy grew 6.7% in 2008/09, sharply slower than the 9.0% or more in the previous three years.
Source: Economic Times
Dell gave little comfort to investor looking for signs that tech’s worst days were over. The world’s No. 2 computer maker said its first-quarter earnings tumbled 63%, and sales dropped 23%. On the heels of a tepid sales forecast from rival Hewlett-Packard last week, Dell’s report showed that corporations shied away from buying computers in recent months and that they’re holding off on placing new orders.
A deal that would pave the way for Chrysler to form an alliance with Italy’s Fiat could close as early as Friday if a U.S. bankruptcy court approves the transaction, according to Robert Nardelli, Chrysler’s chief executive. The court is weighing the sale of most of Chrysler’s assets to Fiat, the US and Canadian governments and the United Autoworkers Union for a $2 billion cash payment to lenders.
Source: Financial Times
After remaining in bankruptcy proceedings for four years, auto parts maker Delphi may finally emerge from Chapter 11 and avert liquidation. As Delphi’s one-time parent, General Motors, lays the final groundwork for its own bankruptcy filing, the Obama administration’s auto task force is pushing for a sale of at least some Delphi assets to a third-party buyer, possibly another parts supplier or an investment firm.
Source: New York Times
One of the most bitter proxy fights in recent history ended May 28 with a clear victory for management as Target shareholders rejected a hedge fund provocateur’s proposal to install new directors. Shareholders of the Minneapolis retailer elected four incumbents over activist shareholder William Ackman’s five picks, which included himself.
German efforts to rescue GM’s unit Opel were under threat after Italy’s Fiat said it would skip crucial talks. A source said frustration was rising at rival bidder Magna. Germany and the U.S. get what may be their last chance to shield Opel from a looming GM bankruptcy on Friday after a first round of talks collapsed amid mutual recriminations.
Crude oil headed for its biggest monthly gain in a decade after OPEC kept its output unchanged amid signs the global economy is recovering. Oil has gained 28 percent in May as equities rose and the U.S. dollar weakened, spurring demand for commodities. Crude oil for July delivery rose as much as 36 cents to $65.44 a barrel on the New York Mercantile Exchange.
Reader Karl Writes: “Youth in America aren’t going to do what their parents and grandparents did. The only way GM could make it is if they merged with Apple. The iCAR would sell well.”
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