Credit firm puts auto suppliers on watch
[2008-12-23 17:04:27]
Credit firm puts auto suppliers on watch
Source :
Crain's Detroit Business
[Posted on Dec 15,2008 at 10:37]
DETROIT -- Six auto suppliers were placed on review late Thursday for a possible ratings downgrade on fears of a potential bankruptcy at General Motors.
Wall Street credit ratings firm Fitch Ratings placed the suppliers??nbsp;issuer default ratings, which grade a company’s ability to meet financial obligations, on watch late Thursday. The companies were:
American Axle & Manufacturing Holdings Inc.
? ArvinMeritor Inc.
? Hayes-Lemmerz International Inc.
? TRW Automotive Holdings Corp.
? Visteon Corp.
? Johnson Controls Inc.
The companies were placed on review because of the impact of a possible Chapter 11 bankruptcy at GM, and Fitch’s view that Ford Motor Co. would also fall into Chapter 11 if GM sought court protection, according to a Fitch memo.
The note said auto industry bankruptcies could result from a failure of the $14 billion federal aid package slated for GM and Chrysler L.L.C. to receive congressional approval, or a failure of the Detroit 3 to develop viable restructuring plans.
The White House now is considering use of the Troubled Asset Relief Program to bail out the Detroit 3 -- a move that would change previous administration policy about the bailout.
"In the event of a GM bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain," the Fitch note said. "Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their tier one suppliers."
Wall Street credit ratings firm Fitch Ratings placed the suppliers??nbsp;issuer default ratings, which grade a company’s ability to meet financial obligations, on watch late Thursday. The companies were:
American Axle & Manufacturing Holdings Inc.
? ArvinMeritor Inc.
? Hayes-Lemmerz International Inc.
? TRW Automotive Holdings Corp.
? Visteon Corp.
? Johnson Controls Inc.
The companies were placed on review because of the impact of a possible Chapter 11 bankruptcy at GM, and Fitch’s view that Ford Motor Co. would also fall into Chapter 11 if GM sought court protection, according to a Fitch memo.
The note said auto industry bankruptcies could result from a failure of the $14 billion federal aid package slated for GM and Chrysler L.L.C. to receive congressional approval, or a failure of the Detroit 3 to develop viable restructuring plans.
The White House now is considering use of the Troubled Asset Relief Program to bail out the Detroit 3 -- a move that would change previous administration policy about the bailout.
"In the event of a GM bankruptcy, Fitch believes that the resulting contraction in auto production, the supply chain, trade credit and capital-access would cause widespread shutdowns and bankruptcies throughout the supply chain," the Fitch note said. "Fitch notes that even if the OEMs avoid bankruptcy, major restructurings of their operations will occur, causing material changes in the operations of their tier one suppliers."
Source: 中华汽配网
Keywords:AUTO; vehicles; Engine
Related Articles:
