While breaking, this story really comes as now surprise to me that the City of Detroit has filed for chapter 9 bankruptcy protection.
In a surprise move today, the city's state appointed emergency manager, Kevyn Orr asked for permission to put the city under Chapter 9 protection this afternoon in court. Currently, Detroit is $18.5 billion dollars in dept. Currently, the Governor of Michigan has to sign off on the bankruptcy since it is the largest municipal bankruptcy in U.S. history.
Details are still forthcoming so we will be posting updates as we find them.
Source: Detroit News.
Showing posts with label Bankruptcy. Show all posts
Showing posts with label Bankruptcy. Show all posts
Thursday, 18 July 2013
Monday, 5 November 2012
Suzuki files for Chapter 11 protection, no more U.S. car sales
As part of the wind down operations, ASMC will discontinue all U.S. automobile sales. However, unlike Saab's bankruptcy, all warranties will be honored for owners. Suzuki, states that "low sales volumes, a limited number of models in its line-up, unfavorable foreign exchange rates, the high costs associated with growing and maintaining an automotive distribution system in the continental U.S. and the disproportionally high and increasing costs associated with stringent state and federal regulatory requirements unique to the U.S. market." as the reasoning behind their decisions. I am curious as to why it has taken them this long to reach that decision as their sales performance has been slipping for the last several years. Their marketing was at times puzzling, comparing the Kizashi against cars like the Mercedes C class and Audi A4.
As we receive more details about Suzuki, we'll keep you updated here.
Source: American Suzuki Motor Corporation.
Press release:
American Suzuki Motor Corporation ("ASMC") Announces Restructuring and Realignment to Focus on Motorcycles/ATV and Marine Divisions
ASMC to wind down and discontinue new automobile sales in continental U.S.
Consumers will be protected and all warranties will continue to be fully honored
BREA, Calif.--(BUSINESS WIRE)-- American Suzuki Motor Corporation ("ASMC" or "the Company"), the sole distributor in the continental United States of Suzuki Motor Corporation ("SMC") automobiles, motorcycles, all-terrain vehicles and marine outboard engines, today announced that it plans to realign its business to focus on the long-term growth of its Motorcycles/ATV and Marine divisions. Following a thorough review of its current position and future opportunities in the U.S. automotive market, ASMC will wind down and discontinue new automobile sales in the continental U.S. The Company has determined the best path to achieve this realignment in an efficient and orderly manner is to restructure its operations under chapter 11. The case will be filed in the United States Bankruptcy Court, Central District of California in Santa Ana.
Consistent with ASMC's long history of standing by its products, owners of Suzuki automobiles will be protected. All warranties will continue to be fully honored and automobile parts and service will be provided to consumers without interruption through ASMC's parts and service dealer network.
ASMC remains firmly committed to Motorcycles/ATV and Marine products, and these divisions are competitively positioned in their respective markets, allowing for long-term growth as economic conditions improve. The realignment is intended to better position ASMC for long-term success and is a return to the Company's roots in the U.S. market, which began with motorcycles and has grown to include ATV and marine products. ASMC remains very proud of its high quality, high performance motorcycle, ATV and Marine products. The Company will continue to bring ASMC products to market, including its full lineup of sportbike, cruiser, touring, scooter, dualsport, motocross, off-road motorcycles and KingQuad ATV line, as well as its flagship DF300AP, state-of-the-art DF20A, and DF15A, among other models. Additionally, ASMC is working to further build its market share through continued investment in additional support for dealers through marketing and advertising activities and sales promotion. Suzuki will continue to have a strong presence as a sponsor of teams in supercross, outdoor motocross and road racing.
In evaluating its position in the highly regulated and competitive U.S. automotive industry, ASMC determined that its Automotive division was facing a number of serious challenges. These challenges include low sales volumes, a limited number of models in its line-up, unfavorable foreign exchange rates, the high costs associated with growing and maintaining an automotive distribution system in the continental U.S. and the disproportionally high and increasing costs associated with stringent state and federal regulatory requirements unique to the U.S. market. While the decision to discontinue new automobile sales in the U.S. was difficult to make, today's actions were inevitable under these circumstances. ASMC is dedicated to honoring its commitments to Automotive customers through and after the wind down of new automobile sales in the continental U.S.
An Orderly Process to Serve Consumers
ASMC intends to work within its current U.S. Automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations, or, in some instances, an orderly wind down of dealership operations. ASMC intends to market and sell its remaining U.S. automobile inventory through its Automotive dealer network. Through and after the restructuring, all warranties will be fully honored and automobile parts and services will be provided to consumers through the dealer network. ASMC intends to honor any automobile buyback agreements that are currently in place with financial institutions.
As part of its chapter 11 filings, ASMC will submit a proposed Plan of Reorganization and Disclosure Statement that specifies how the Motorcycle, ATV and Marine divisions will be maintained and enhanced, and how its relationship with Automotive dealers will be largely transitioned to support consumers and dealers through continued parts and service operations. SMC or its nominee intends to purchase ASMC's Motorcycle, ATV and Marine businesses, as well as the Automotive service operation responsible for parts and warranties, through a new U.S. subsidiary that will retain the ASMC brand name.
ASMC believes it has sufficient cash on hand to operate its businesses during the restructuring. If necessary, ASMC will request permission from the Court to borrow additional funds from SMC needed during the restructuring.
Honoring Commitments
ASMC intends to operate its Motorcycles/ATV and Marine businesses as usual and is dedicated to completing the realignment process as smoothly and efficiently as possible. ASMC will continue to fully stand behind all of its products and honor all warranties from these divisions. ASMC is working with GE Capital's Retail Finance and Commercial Distribution Finance businesses to continue providing motorcycles and ATV consumer financing programs and motorcycle, ATV and marine dealer inventory financing respectively. The Company expects existing agreements with other dealer and consumer financing providers to continue as well.
ASMC has filed a series of first day motions requesting approval to continue paying employee wages and benefits in the ordinary course, offering dealer incentives and payments under customer warranties. ASMC also expects to pay vendors in the normal course of business for goods and services delivered on or after its November 5, 2012 filing. Payments for goods received before ASMC's November 5, 2012 filing will be made in accordance with the chapter 11 procedure.
SMC, the 100 percent interest holder in ASMC, is not a debtor in the chapter 11 filing.
ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of M. Freddie Reiss, Senior Managing Director at FTI Consulting, as Chief Restructuring Officer, and has also added two independent Board members to assist it through this period.
Additional information regarding ASMC's business realignment can be found at the Company's website, www.suzuki.com, or via an information hotline at 1-877-465-4819.
Tuesday, 7 February 2012
Saabs of our lives: No news is good news?
Source: Automotive News.
Tuesday, 17 January 2012
Saabs of our lives: Breaking news! Museum liquidation sale
Source: Bringatrailer.com
Tuesday, 20 December 2011
Breaking Saab news: No more warranty coverage.
Breaking news from Saab. Saab North America will no longer be honoring warranties on Saab vehicles sold in the U.S. Additionally, all new Saabs sold will be sold "as-is" with no warranty coverage what so ever.
Effective Dec. 19, "warranty coverage is suspended indefinitely for all new Saab vehicles sold. During this period, the warranty booklet must be removed from the owner information packet," Saab Cars North America said in a statement provided to Automotive News.
"For any vehicle sold or leased during this period, the customer should be affirmatively advised that the vehicle does not carry any warranty coverage and is sold 'as is.' "
Saab Cars North America also said it has suspended the processing and payment of all claims, including but not limited to:
• New-car warranties
• Powertrain warranties
• Emission warranties
• Parts warranty
• Safety belts, airbags
• Towing
• Recalls and campaigns
• Certified pre-owned coverage
• Goodwill
• No charge maintenance
Effective Dec. 19, "warranty coverage is suspended indefinitely for all new Saab vehicles sold. During this period, the warranty booklet must be removed from the owner information packet," Saab Cars North America said in a statement provided to Automotive News.
"For any vehicle sold or leased during this period, the customer should be affirmatively advised that the vehicle does not carry any warranty coverage and is sold 'as is.' "
Saab Cars North America also said it has suspended the processing and payment of all claims, including but not limited to:
• New-car warranties
• Powertrain warranties
• Emission warranties
• Parts warranty
• Safety belts, airbags
• Towing
• Recalls and campaigns
• Certified pre-owned coverage
• Goodwill
• No charge maintenance
Monday, 19 December 2011
Saab files for bankruptcy protection. What's next?
General Motors, former owner of Saab until their own bankruptcy let them shed the automaker, has been blocking the potential sale of Saab to a Chinese automaker. GM's basis is because they do not want the sharing of GMs platform technology with another competitor that could potentially undercut them in the Chinese market that GM has seen huge success with. And unfortunately, Saab depends on GM's help in that are in order to be able to build cars or at least until Saab has the funds to develop their own technology again. And that really isn't going to happen any time soon.All the while dealers in the US and around the world have been patiently awaiting cars to be able to sell to customers, and with each passing day, its looking less and less likely they'll see them. So is this the swansong for Saab? Unfortunately it looks like it may very well be. I have always been a fan of the brand and would hate to see them go away, but I think the time has come to envision a world without new Saabs.
Sunday, 31 May 2009
General Motors to declare bankruptcy tomorrow
Tomorrow will be a truly sad day for the automobile industry. General Motors, the largest automobile manufacturer in the world, bankrupt. It just doesn't make sense saying it, even though we've been talking about it for months now.
General Motors was once THE company to watch in the industry. You could have said, what General Motors wants is what America wants. Unfortunately that isn't the case any more. Poor management decissions and the inability to keep up with market trends led to yearly losses in the billions of dollars. Couple that with legacy costs, the UAW, and the failure to restructure after government loans to the tune of $20 billion and we're left with the smoldering pile of goo that was once General Motors.
The saddest part is the loss of some great GM brands. We lost Oldsmobile in 2004. Hummer and Saab had been up in the air for the last 6 or so months, Saturn was poisoned by GM management over the last 15 + years. Opel is being divided up. And the biggest blow, Pontiac. Finally when Pontiac is making some great, fun cars they get the rug pulled out from under them.
This leaves GM with just Chevrolet, Cadillac, Buick, and GMC truck. I doubt we'll see the giant of GM that once was in the 1950s and 60s.
Stay tuned for more info as it becomes available.
General Motors was once THE company to watch in the industry. You could have said, what General Motors wants is what America wants. Unfortunately that isn't the case any more. Poor management decissions and the inability to keep up with market trends led to yearly losses in the billions of dollars. Couple that with legacy costs, the UAW, and the failure to restructure after government loans to the tune of $20 billion and we're left with the smoldering pile of goo that was once General Motors.
The saddest part is the loss of some great GM brands. We lost Oldsmobile in 2004. Hummer and Saab had been up in the air for the last 6 or so months, Saturn was poisoned by GM management over the last 15 + years. Opel is being divided up. And the biggest blow, Pontiac. Finally when Pontiac is making some great, fun cars they get the rug pulled out from under them.
This leaves GM with just Chevrolet, Cadillac, Buick, and GMC truck. I doubt we'll see the giant of GM that once was in the 1950s and 60s.
Stay tuned for more info as it becomes available.
Thursday, 14 May 2009
NADA responds to Chrysler's dealer announcement
As the U.S. dealer network continues to take in the loss of 789 Chrysler, Dodge & Jeep dealerships. The National Automobile Dealers Association weighs in on the truth of the matter.
Source: NADA
Today’s announcement by Chrysler that it is rejecting 789 of its Chrysler, Dodge and Jeep dealers marks a very sad day in retail automotive history.
These dealers and their more than 40,000 employees have done nothing but proudly represent the Chrysler brand through good times and bad, and today find themselves left behind as the company reorganizes itself in bankruptcy court.
While NADA understands the realities of the current marketplace, we also know that dealers didn’t cause the situation that Chrysler finds itself in today. Furthermore, we believe that these draconian dealer cuts are not only misguided but counterproductive. Fewer dealers mean less revenue for the automakers. Dealers are the manufacturer’s customer; they buy the cars and parts and even the signs in front of their dealerships.
NADA fully expects Chrysler to honor all its obligations to the affected dealers who have been nothing but good partners over the years.
NADA will continue to work aggressively on all fronts with regard to assisting these dealers during these historically challenging times.
Source: NADA
Today’s announcement by Chrysler that it is rejecting 789 of its Chrysler, Dodge and Jeep dealers marks a very sad day in retail automotive history.
These dealers and their more than 40,000 employees have done nothing but proudly represent the Chrysler brand through good times and bad, and today find themselves left behind as the company reorganizes itself in bankruptcy court.
While NADA understands the realities of the current marketplace, we also know that dealers didn’t cause the situation that Chrysler finds itself in today. Furthermore, we believe that these draconian dealer cuts are not only misguided but counterproductive. Fewer dealers mean less revenue for the automakers. Dealers are the manufacturer’s customer; they buy the cars and parts and even the signs in front of their dealerships.
NADA fully expects Chrysler to honor all its obligations to the affected dealers who have been nothing but good partners over the years.
NADA will continue to work aggressively on all fronts with regard to assisting these dealers during these historically challenging times.
Chrysler to close 789 dealers.
In compliance with bankruptcy protocol, Chrysler LLC is exercising the option to close 789 Chrysler, Dodge, and Jeep dealers across the United States. This is just one of the many steps being taken to return Chrysler to profitability when they emerge from bankruptcy proceedings and the new aliance with Fiat.
44% of the dealers affected have dual brands, meaning Chysler & Dodge, Dodge & Chevrolet etc. So some dealers will only loose one brand. But one of the key alignments is to align the dealers with the expected annual sales numbers of 12 to 14 million units per year. So you will see a Dodge dealer, that may take on Chrysler and Jeep in the near future.
Jim Press, Co-President of Chrysler LLC states that "Chrysler is open for business". And assures Chrysler customers that they will still be able to purchase cars, parts, and have their Chrysler products serviced for many years to come.
This raises the question of what will happen to the current inventory of Chrysler vehicles when the 789 dealers close. There is currently 400+ thousand Chrysler, Dodge & Jeep vehicles spread across the 789 dealers. The cars will be taken back by Chrysler and redistributed to the remaining dealers. This is due to Chrysler's decission to not produce any more vehicles during the bankruptcy process. So dealers that will be taking on new franchises will have a supply of cars to pick from.
Source: Chrysler
PRESS RELEASE:
Chrysler LLC Files Papers to Retain Majority of U.S. Dealer Network as Part of Company's Sales ProcessAuburn Hills, Mich., May 14, 2009 - Chrysler LLC today filed a motion with the U.S. Bankruptcy Court seeking to reject certain U.S. dealer agreements, and a list of U.S. dealer agreements to be assigned to the buyer of its business assets. Subject to Court approval, 2,392 Chrysler, Jeep® or Dodge dealers will continue with the new company in a global alliance with Fiat once the sale is complete. This action will help improve the landscape of the Chrysler dealership network following the sale and enhance the full line portfolio of Dodge, Jeep and Chrysler products for customers."We are in the process of revitalizing Chrysler's business to succeed as a viable enterprise under new ownership in the future," said Jim Press, Vice Chairman and President. "The unprecedented decline in the industry has had a significant impact on our sales and forced us to reduce production levels to better match the needs of the market. With the downsizing of operations after the sale and reduction of plants and production, similar reductions must be made to the size of the dealer body. We appreciate the support of our dealers and regret this painful action. We wish market conditions made it possible to keep everyone."Chrysler plans to maintain "business as usual" with all of its dealers through the transition. The Company intends to honor warranty and incentive payments during the period that rejected dealers remain active. Chrysler is committed to working with these dealers to ensure a positive relationship with customers. To ease the burden on dealers whose agreements have not been assumed, Chrysler will work to assist in the redistribution of new vehicles and parts to the remaining dealer network."It is with a deep sense of sadness that we must take steps to end some of our Sales and Service Dealer Agreements," said Steven Landry, Executive Vice President, North American Sales and Marketing, Global Service and Parts. "The decision, though difficult, was based on a data-driven matrix that assessed a number of key metrics. In total, 789 dealers, which represents 14 percent of our sales volume, will be rejected and, subject to the court approval, they will discontinue selling Dodge, Chrysler or Jeep vehicles on or about June 9."The review was an objective and rigorous process that was both thoughtful and thorough. We plan to work to have an orderly transition. These are extraordinary times, and they call for an extraordinary response. It is important to our dealers and to our customers that these steps be completed quickly and seamlessly as we transition to a new Chrysler," Landry added.Additionally, on May 12, the Court approved the motion regarding Chrysler LLC's agreement with GMAC Financial Services to provide the automotive financing products and services to the Company's dealers and customers moving forward. GMAC Financial Services will be the preferred lender in North America for Chrysler, Jeep and Dodge dealer and consumer business, including wholesale of new and used vehicles as well as retail. GMAC Financial Services will be able to offer the best long-term finance options for Chrysler dealerships and customers and is established as a bank holding company with access to a variety of funding sources.While difficult, the actions to restructure its dealer network are a necessary part of Chrysler's viability plan and are central to the proposed sale transaction. These actions will help ensure that both remaining dealers and the new company will be stronger and more profitable going forward."A stronger dealer network supported by GMAC's long-term finance options provides an advantage to consumers, and that is what will ultimately drive the creation of a significantly stronger global competitor," said Press.Additional information, including the motions filed, can be found at www.chryslerrestructuring.com.
44% of the dealers affected have dual brands, meaning Chysler & Dodge, Dodge & Chevrolet etc. So some dealers will only loose one brand. But one of the key alignments is to align the dealers with the expected annual sales numbers of 12 to 14 million units per year. So you will see a Dodge dealer, that may take on Chrysler and Jeep in the near future.
Jim Press, Co-President of Chrysler LLC states that "Chrysler is open for business". And assures Chrysler customers that they will still be able to purchase cars, parts, and have their Chrysler products serviced for many years to come.
This raises the question of what will happen to the current inventory of Chrysler vehicles when the 789 dealers close. There is currently 400+ thousand Chrysler, Dodge & Jeep vehicles spread across the 789 dealers. The cars will be taken back by Chrysler and redistributed to the remaining dealers. This is due to Chrysler's decission to not produce any more vehicles during the bankruptcy process. So dealers that will be taking on new franchises will have a supply of cars to pick from.
Source: Chrysler
PRESS RELEASE:
Chrysler LLC Files Papers to Retain Majority of U.S. Dealer Network as Part of Company's Sales ProcessAuburn Hills, Mich., May 14, 2009 - Chrysler LLC today filed a motion with the U.S. Bankruptcy Court seeking to reject certain U.S. dealer agreements, and a list of U.S. dealer agreements to be assigned to the buyer of its business assets. Subject to Court approval, 2,392 Chrysler, Jeep® or Dodge dealers will continue with the new company in a global alliance with Fiat once the sale is complete. This action will help improve the landscape of the Chrysler dealership network following the sale and enhance the full line portfolio of Dodge, Jeep and Chrysler products for customers."We are in the process of revitalizing Chrysler's business to succeed as a viable enterprise under new ownership in the future," said Jim Press, Vice Chairman and President. "The unprecedented decline in the industry has had a significant impact on our sales and forced us to reduce production levels to better match the needs of the market. With the downsizing of operations after the sale and reduction of plants and production, similar reductions must be made to the size of the dealer body. We appreciate the support of our dealers and regret this painful action. We wish market conditions made it possible to keep everyone."Chrysler plans to maintain "business as usual" with all of its dealers through the transition. The Company intends to honor warranty and incentive payments during the period that rejected dealers remain active. Chrysler is committed to working with these dealers to ensure a positive relationship with customers. To ease the burden on dealers whose agreements have not been assumed, Chrysler will work to assist in the redistribution of new vehicles and parts to the remaining dealer network."It is with a deep sense of sadness that we must take steps to end some of our Sales and Service Dealer Agreements," said Steven Landry, Executive Vice President, North American Sales and Marketing, Global Service and Parts. "The decision, though difficult, was based on a data-driven matrix that assessed a number of key metrics. In total, 789 dealers, which represents 14 percent of our sales volume, will be rejected and, subject to the court approval, they will discontinue selling Dodge, Chrysler or Jeep vehicles on or about June 9."The review was an objective and rigorous process that was both thoughtful and thorough. We plan to work to have an orderly transition. These are extraordinary times, and they call for an extraordinary response. It is important to our dealers and to our customers that these steps be completed quickly and seamlessly as we transition to a new Chrysler," Landry added.Additionally, on May 12, the Court approved the motion regarding Chrysler LLC's agreement with GMAC Financial Services to provide the automotive financing products and services to the Company's dealers and customers moving forward. GMAC Financial Services will be the preferred lender in North America for Chrysler, Jeep and Dodge dealer and consumer business, including wholesale of new and used vehicles as well as retail. GMAC Financial Services will be able to offer the best long-term finance options for Chrysler dealerships and customers and is established as a bank holding company with access to a variety of funding sources.While difficult, the actions to restructure its dealer network are a necessary part of Chrysler's viability plan and are central to the proposed sale transaction. These actions will help ensure that both remaining dealers and the new company will be stronger and more profitable going forward."A stronger dealer network supported by GMAC's long-term finance options provides an advantage to consumers, and that is what will ultimately drive the creation of a significantly stronger global competitor," said Press.Additional information, including the motions filed, can be found at www.chryslerrestructuring.com.
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