TOP 100 RACING SITES
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| GM's bondholders inch toward a deal General Motors is inching toward a few deals that it needs to restructure the company and stay out of bankruptcy. A committee representing its bondholders said on Monday night that it has submitted to GM management and President Obama’s Auto Task Force a framework for reducing the company’s $27.5 billion in bond debt. The committee didn’t give exact figures. But a source close to the committee said that its members basically agreed in principle to cut it by roughly two-thirds, which is the amount that the Bush Administration asked for last year before extending more credit to GM or Chrysler. Bondholders would get roughly one-third of the value of their bond in cash and the rest in GM stock. But there’s a catch. Several, it seems. The bondholders want the United Auto Workers to reduce labor costs and accept equity for at least half of the $20 billion GM owes the union for healthcare liabilities. They want management to take a tougher look at the company’s restructuring plan. The bondholders have also asked the government to guarantee the cash portion of GM’s debt. There’s another big catch. The bondholders committee represents about $6 billion worth of bonds directly and is in frequent contact with creditors holding about $6 billion more in debt. So the most the bondholders committee can do is make a call for $12 billion of the $27.5 billion in bonds. GM and the Task Force still must convince the remaining bondholders to take the swap. That could be a big problem. GM needs about 90% of the bondholders to accept a cram down to fix its balance sheet. Otherwise, bankruptcy is still an option. In bankruptcy court, they only need two-thirds to agree to a cram down and the court will make the deal firm. No wonder Steve Rattner, the Wall Street banker who heads up the task Force, told the Detroit Free Press that the bondholders are being difficult. In any case, GM is moving in the right direction. But much work remains. rss.businessweek.com |
Gordon treated to relieve back pain before 600 Jeff Gordon had an injection in his back to help ease the pain he's had for more than a year, and the four-time NASCAR champion ... rssfeeds.usatoday.com |
Massa suffers skull fracture in high-speed wreck Felipe Massa sustained a skull fracture after his high-speed crash at the Hungarian Grand Prix and will undergo surgery, Ferrari ... rssfeeds.usatoday.com |
Here comes the clunker hangover Here comes the hangover from the cash for clunkers program. Recall that last month, the seasonally adjusted rate of car sales was 14.1 million vehicles. That was a banner month considering that sales rates for most months this year were around 10 million cars. For most of the decade, Americans were buying easily 16 million cars and trucks a year. But the economy tanked last year and we only bought 13.5 million. So the cash for clunkers program was a welcome boost for carmakers, parts companies and dealers. Now comes a bit of payback. Edmunds.com predicts that September will have had a selling rate of 9.3 million vehicles and J.D. power says it will be 9.2 million vehicles. That’s a 41% drop from August. That means that some buyers who would have bought this month just bought last month instead. In a recent interview, General Motors CEO Fritz Henderson told me that we would see some payback for the cash for clunkers program, but he doesn’t think it will last long. With the economy showing signs of life, we may see sales slowly inch back up once the clunker hangover ends. Does that mean the clunker program was a failure? Not really. But in the end it will have added a modest 7% boost to sales for a dismal year. It helped carmakers as some of them called employees back to work to rebuild inventory. If car sales really start to rise over the next few months, it won’t be due to the clunker program. It will be due to the Obama Administration’s other stimulus moves and because the U.S. economy is starting to bounce back. rss.businessweek.com |
Kyle Petty, NASCAR return to their racing roots in Nashville Growing up among racing royalty in NASCAR afforded Kyle Petty regal treatment in Nashville, too. Though he no longer drives in ... rssfeeds.usatoday.com |