As far as the GM bankruptcy issue goes, the number of suppliers affected by the impending closure is countless. However, as a business, that is not all that General Motors has to worry about. Remember that for any corporation or business, debts go far beyond auto suppliers. Some may not even be aligned with the auto manufacturing binge something which was revealed as far as the growing concern on the GM row.

GM has over $100 million in debts, a large chunk of which is from the advertising sector. Date back and you will notice the aggressive nature of advertising and promotional practice that popular businesses undertake and General Motors is among that niche.

Among the company’s top 50 creditors, 10 are outside the auto or transportation industries. GM owes these firms just under $250 million. But they have to take a back seat in the bankruptcy process.

Given that figure alone, you can imagine why the GM bankruptcy filing is taking quite a beating. A lot of businesses stand to lose a lot from the GM mess. And mind you, not all of them are from car parts sector.

(Source) CNN

Tags: 100 million, aggressive nature, Auto Suppliers, back seat, bankruptcy filing, bankruptcy process, binge, business debts, car parts, chunk, creditors, General Motors, GM, growing concern, impending closure, transportation industries

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If you think Chrysler’s declaration of bankruptcy is one setback, wait until it amplifies on the affiliated suppliers. Apparently, the auto suppliers will also have some problems coming their way, potentially losing one of their biggest clients for some time now.

Problems with suppliers could also impact production at the US plants of other major automakers such as Ford, Toyota and Honda which have been working with months to ensure to stability of their supply.

Under a plan announced Thursday by President Barack Obama, Chrysler aims for a “surgical” bankruptcy to wipe out a portion of its debts, allowing the creation of a new firm tied to Fiat to put the Detroit firm on the road to profitability.

Chrysler said it will idle most plants during the bankruptcy process, which it anticipates will take 30 to 60 days. But analysts warn the process could take significantly longer.

And suppliers were already smarting from news that General Motors — which has until June 1 to present a viability plan to the US Treasury — plans to shut most of its assembly plants during May, June and July to help control inventory and avoid difficulties with parts shortages.

US auto sales, which collapsed last fall amid a deepening economic crisis, were down 34 percent in April and are not expected to improve for months.

(Source) ABS CBN

Tags: assembly plants, auto sales, Auto Suppliers, automakers, bankruptcy process, Barack Obama, Chrysler, economic crisis, Fiat, Ford, ford toyota, General Motors, Honda, us treasury

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After weeks of speculation, Chrysler has finally filed for Chapter 11, a development that many deem as long overdue. Even during the early phases of the celebrated financial bailout plan, critics saw that it was just a matter of time before Chrysler bit the bullet. And apparently that time is now.

BankruptcyData.com reports that Chrysler LLC has filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York. The Company is represented by Corrine Ball of Jones Day. According to BankruptcyProfessional.com, since 1990, Jones Day has served as petitioning counsel for 7 of the nearly 300 public company bankruptcies listing a pre-petition asset figure of $1 billion or more.

Chrysler has indicated that it maintains approximately 100,000 employees. That figure makes it the third largest corporate employer to seek refuge with the U.S. Bankruptcy Court since 1980, according to BankruptcyData.com. The largest and second largest employee counts belong to Kmart Corporation and Delphi Corporation (DPHIQ), respectively.

In addition to its high employee and asset count, Chrysler’s filing is newsworthy in another respect. George Putnam, III explains, “The Chrysler bankruptcy could be particularly interesting because of the government involvement. The Obama Administration may have a few things to learn about the bankruptcy process.”

(Source) Press

Tags: 1 billion, bailout plan, bankruptcy court, bankruptcy process, Chapter 11, Chrysler, company bankruptcies, corporate employer, delphi corporation, financial bailout, george putnam, government involvement, kmart, matter of time, petition, southern district of new york, speculation

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