Thursday, September 29, 2005

Another Form of Cramdown

So, you thought the US automotive industry was in the shitter already, hell its starting to look attractive for a daring private equity firm to come in and scoop up a few troubled automotive suppliers.

Ford to Cut Half of Suppliers to Improve Technology - Bloomberg
Sept. 29 (Bloomberg) -- Ford Motor Co. will cut half of its suppliers and sign long-term contracts with the rest to reduce costs and improve technology as the world's third-largest carmaker struggles to reverse declining profit and shrinking sales.

Ford will announce agreements today with Sweden's Autoliv Inc., Delphi Corp., Johnson Controls Inc., Lear Corp., Canada's Magna International Inc., Visteon Corp. and Japan's Yazaki Corp., said Gabriele Gutscher, a spokeswoman for Ford in Cologne, Germany (continued...)

Well, it really sucks if you are an automotive supplier and you aren't one of those companies named above. Well, somebody had to pay for all of those price discounts. Well let's see, you have a few airlines in Chapter 11, a few automotive suppliers........anyone starting to see a trend?. Looks like pension heavy business ain't what they used to be..........the next thing to keep any eye out for is these companies to be shedding their pension obligations.


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