(Akron/Tire Review) Struggling General Motors Corp announced this morning that it would close nine North American production and assembly plants and cut 30,000 manufacturing jobs by 2008 as part of an effort to get production in line with demand. Rick Wagoner, chairman and CEO of the world’s largest automaker, announced the closures during a speech to employees from GM’s Detroit headquarters. Wagoner has repeatedly denied that GM would file for bankruptcy.
Automotive supplier Delphi has filed for chapter 11 bankruptcy protection. General Motors, Delphi’s former parent company will bear the brunt of the collapse because it could be liable for up to $11 billion (£6 billion) worth of pension and retirement benefits for about 25,000 Delphi employees.
(Akron/Tire Review) Federal-Mogul Corp can see light at the end of the bankruptcy tunnel, thanks to a key agreement that was reached late last week between the company and administrators in the UK that will settling outstanding asbestos claims. The agreement is seen as key to allowing Federal-Mogul to emerge from Chapter 11 bankruptcy after some four years.
Michelin has ended its attempts to sue a 78-year-old pamphleteer. Shimon Tzavbar, who faced bankruptcy as a result of the legal proceedings, agreed not to use the firm’s name on an “unofficial” guide to Israeli jails.Michelin also withdrew a demand for Mr Tzabar to pay any of its legal costs.
Givign evidence the writer had said: “In order to make a satire that will catch the public eye, one has to use a name or symbol that is famous. The same way that the artist Andy Warhol used the famous Campbell soup name and logo to change the consumerism of society, so did I use the famous Michelin name to spread awareness of a great human tragedy, a tragedy that the Jews in Israel should know all about.”
The company had said his depiction of the Michelin man, with one arm raised and a tyre in his other hand, infringed its trademark rights.
Months after announcing that the company’s Bibendum had been short-listed as one of the world’s most recognised logos, Michelin is going to court to defend the beloved ‘Michelin Man.’
Daewoo-FSO Motor Polska is to slash up to 1,500 jobs in Poland, in a bid to save the company from bankruptcy and to encourage investment in restructuring. The exact number of jobs to be lost will be decided in discussions with unions, but 1,000 workers picketed a meeting of shareholders at the Economy Ministry.
Federal-Mogul Corporation has advised the U.S. Bankruptcy Court for the District of Delaware that it has approached Citigroup Venture Capital Equity Partners, which has expressed an interest in making an equity investment of 350 million US dollars in the company. CVC has requested that Federal-Mogul agree to an exclusive 90-day negotiating period with CVC and to reimburse CVC for necessary fees and expenses incurred by it in connection with the due diligence review of the company’s business and negotiation of the possible investment.
Chip McClure, Federal-Mogul chief executive officer and president says, “An investment of the type CVC is proposing, if consummated, would create value for the long term by strengthening the balance sheet and enhancing liquidity, while helping ensure that we will continue to deliver innovative products and services to our customers.”
An infusion of new capital will reduce Federal-Mogul’s long-term debt and significantly enhance its liquidity, thus strengthening the company’s ability to compete and succeed in the increasingly competitive global auto parts market.
Hayes Lemmerz, the wheel producer who recently emerged from Chapter 11 bankruptcy protection, is trying to reduce costs without compromising financial recovery. This comes in response to the expectation that US vehicle manufacturers will ask suppliers to reduce prices in order to improve the manufacturers’ own bottom lines.
Hayes Lemmerz International, Inc. has announced its intention to sell up to 225 million US dollars of senior unsecured notes due in 2010. Hayes Lemmerz intends to use the net proceeds from the offer to make payments in connection with its Plan of Reorganisation to support its emergence from Chapter 11. Hayes Lemmerz, its U.S. subsidiaries and one subsidiary organised in Mexico filed voluntary petitions for reorganisation under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware on December 5, 2001.
Hayes Lemmerz, the wheel manufacturer who filed for bankruptcy protection under Chapter 11 of the US bankruptcy code in December 2001, has reached agreement in principle with the Official Committee of Unsecured Creditors over a plan for reorganisation. The company hopes that the agreement will enable it to make progress and emerge from Chapter 11 within a few months.
Hayes Lemmerz has filed a Plan of Reorganisation with the US Bankruptcy Court. This is the first step in the company’s attempt to emerge successfully from Chapter 11 proceedings, which it hopes will happen in the first half of next year. The Plan requires approval from creditors and the Court. Among the corporate initiatives already put in place by Hayes Lemmerz are rationalisation of manufacturing and marketing and divesting non-core assets. It is understood that the plan involves Hayes Lemmerz paying creditors $425 million in notes and common stock in the reorganised company and assuming a debt of $650 million.
At a press conference, Bridgestone president Yoichiro Kaizaki dismissed rumours that claims for damages in the USA could force Bridgestone/Firestone Inc. into bankruptcy. The company has set aside $450 million to cover claims and any extra needed could come from the US company’s reserves, estimated at $2.3 billion. Despite the reassurance, Bridgestone shares fell by over 13 per cent in Tokyo.
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