USA; CHRYSLER will file for Chapter 11 bankruptcy protection,

• Apr 30: Chrysler will file for Chapter 11 bankruptcy protection, kicking off what the administration predicts will be a 30- to 60-day restructuring. At the same time, Chrysler entered into a partnership with Italian auto maker Fiat. The U.S. government will provide up to an additional $8bl in aid, including up to $3.5bl in debtor-in-possession financing, to ensure Chrysler survives the reorganization process (WSJ)
• Apr 27: GM needs $11.6bl more in government loans and it plans to file for bankruptcy protection if a debt exchange with its bondholders is unsuccessful. By 2010, GM will phase out its Pontiac brand, eliminate 42% of its dealers, close 13 plants and cut 21,000 hourly jobs as part of its revised restructuring plan (NYTimes)
• Apr 24: Ford has enough money to make it through 2009. The auto maker reported a smaller-than-expected first-quarter loss and slowed its cash burn. Ford posted a net loss of $1.4bl, or 60 cents a share, compared with a profit of $70ml or three cents a share for the same period in 2008. Revenue declined 37% to $24.8bl (WSJ)
• Apr 17: GM still hopes to avoid a bankruptcy, but the option is becoming increasingly unavoidable as the company struggles to achieve key goals toward an out-of-court restructuring. Henderson--> bankruptcy remains a "probable" outcome for the auto maker, which is subsisting on government loans and in need of more cash (WSJ)
• Apr 12: U.S. Treasury is directing GM to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite GM’s public contention that it could still reorganize outside court. The goal is to prepare for a fast “surgical” bankruptcy and GM insists that a quick restructuring is necessary so its image and sales are not damaged permanently. The preparations are aimed at assuring a GM bankruptcy filing is ready should the company be unable to reach agreement with bondholders to exchange roughly $28bl in debt into equity in GM and with the UAW, which has balked at granting concessions without sacrifices from bondholders (NYTimes)
• Apr 08: U.S. Treasury began financing support programs through GM and Chrysler aimed at helping auto-parts makers survive the industry’s sales slump. GM will get $2bl under the programs, which guarantee payments owed to suppliers and Chrysler will be able to use $1.5bl (Bloomberg)
• Apr 03: Henderson-->There were many people saying ‘well, the government would never let GM file for bankruptcy] – well it’s pretty clear that’s not the case. And if you have any doubts still then listen to me: we’re going to get the job done one way or the other and I think therefore people who were maybe sitting back and saying well that won’t happen – it may happen, it may very well happen, but the company will achieve its goals (FT)
• Auto Sales: GM's March US sales fell by 45%, Ford's by 41% and Chrysler's by 39% in a dismal continuation of weak sales for most auto makers (WSJ) Sales of new autos is currently averaging at 8.8ml annually, the lowest number in 27 years, and substantially less than the average 16.8ml vehicles sold annually in the decade up to 2007 (Bloomberg)
• Apr 01: President Obama believes a quick, negotiated bankruptcy is the most likely way for GM to restructure and become a competitive automaker. Obama also is prepared to let Chrysler go bankrupt and be sold off piecemeal if the third-largest U.S. automaker can’t form an alliance with Fiat (Bloomberg)
• Mar 31: Henderson-->GM could reach the goals set by the U.S. auto task force ahead of a June 1 deadline. GM remained focused on restructuring out of court and understood the tasks needed to avoid a "quick rinse" bankruptcy. The government will provide GM with working capital until June 1 as GM develops the plan and tries to thrash out deals with unions, creditors and other stakeholders. However, GM has made contingency plans for "a quick rinse" bankruptcy process (WSJ)
• Mar 30: The Obama administration pushed out the chairman of GM and instructed Chrysler to form a partnership with the Italian automaker Fiat within 30 days as conditions for receiving another much-needed round of government aid
• cont: The decision to ask GM’s CEO and Chairman, Rick Wagoner, to resign caught many by surprise, and it underscored the Obama administration’s determination to keep a tight rein on the companies it is bailing out — a level of government involvement in business perhaps not seen since the Great Depression. Details of the bailout will be announced by the President later today
• Mr. Obama’s auto industry task force, in a report released Sunday night assessing the viability of both companies and detailing the administration’s new plans for them, concluded that Chrysler could not survive as a stand-alone company (NYTimes)
  
• The Fed used emergency powers on Dec 24 to grant GMAC's bank conversion, citing turmoil in financial markets and the potential impact on GM, as the biggest U.S. automaker taps emergency federal loans to stay in business. GM and Cerberus will give up control of GMAC to comply with federal rules on who can own banks. GM owned all of GMAC until selling the stake in 2006 to the Cerberus-led group
• Dec 5: Altman-->Some of the U.S. automakers (e.g. GM) should file for bankruptcy protection under Chapter 11, but the U.S. Government should not turn its back on these huge, important American firms and provide directly, or, through a guarantee to large banks or large firm conduits, e.g. G.E., a massive debtor-in-possession (DIP) loan to provide the necessary liquidity to sustain them during the likely long restructuring period
• cont: The average Z-Score of a sample of hundreds of bankrupt firms in the recent past was -0.19. When estimating the pro-forma financial profile as of 12/31/08, GM’s Z-Score improves slightly to -0.09, assuming the receipt of $12bl in loans and to -0.03 assuming an increase of $18bl in cash from the government. These scores are still much closer to a “D” rating equivalent than to a “CCC” rating. Meaning that GM still has a high probability of going bankrupt, even with the $18bl aide package

May 1, 2009