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GM, Ford May Face Bankruptcy on Slowdown
Jeff Green and Marco Bertacche
October 10, 2008
General Motors Corp., Ford Motor Co. and Chrysler LLC may be forced into bankruptcy by slowing economies and dwindling U.S. auto sales, Standard & Poor’s analyst Robert Schulz said today.
“Macro factors could overwhelm them at some point” even with the three biggest U.S. automakers committed to turnarounds, Schulz said in a Bloomberg Television interview. S&P said yesterday it may cut GM and Ford debt deeper into junk on forecasts for 2009 auto demand falling to the lowest since 1992.
GM, Ford and Chrysler are under pressure as the worsening global credit crisis makes it harder for buyers to get loans and dealers to finance their operations. U.S. industrywide sales tumbled 27 percent in September, the most in 17 years.
GM fell 17 cents, or 3.6 percent, to $4.59 at 9:52 a.m. in New York Stock Exchange composite trading, while Ford added 7 cents to $2.15. GM slumped to a 58-year low yesterday and Ford closed at its lowest since 1982. Chrysler is closely held.
With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a “strategic” decision, said Schulz, who is based in New York.
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