Bollywood actress Katrina Kaif is the most searched person online in India, while social networking site Orkut is the most searched keyword in the country, according to Google’s India Zeitgeist – a survey of online search terms.
“Different people find different things to do on the Web, so these lists are a good representation of the unique ways in which users mine the Internet,” said Vinay Goel, Head of Products, Google India.
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Friday, December 19, 2008
GM, Chrysler in 102-Day Race to Keep Federal Loans
The clock is ticking for General Motors Corp. and Chrysler LLC. The automakers have 102 days to slash debt, renegotiate labor contracts and lay plans to cut thousands of jobs or face a government-mandated bankruptcy.
The Bush administration threw them a $13.4 billion lifeline from the U.S. bank-bailout program, with $4 billion more for GM in February provided Congress expands that fund. In exchange, the government gets warrants that will allow it to profit if the rescue succeeds and seniority over much of the companies’ debt if the effort fails.
Today’s move gives the U.S. wide authority to call the shots in the auto industry for the first time since the 1980s bailout of Chrysler Corp. and keeps GM and Chrysler alive long enough for a broader reorganization plan from the incoming Congress and President-elect Barack Obama.
“The restructuring they’re going to have to go through will be huge,” said Maryann Keller, an independent auto analyst and consultant in Greenwich, Connecticut. “This is money to tide them over. They’re going to come back for more money. That’s when the government is going to have to decide whether they’re viable businesses.”
The White House stepped in after a compromise plan backed by President George W. Bush and House Democrats failed to pass the Senate, thwarting Bush’s aim to avoid a “disorderly” bankruptcy that would have further weakened the U.S. economy.
Obama endorsed the plan, calling it a “necessary step” to “save this critical industry.”
March 31 Deadline
GM, the biggest U.S. automaker, and No. 3 Chrysler have until March 31 to meet the government terms or have the Treasury Department call the loans. Such a step would likely force the companies into bankruptcy, because they had said they were only weeks away from insolvency without an infusion of cash.
“Our focus now turns to rapidly and fully implementing our restructuring plan,” GM Chief Executive Officer Rick Wagoner said at a news conference in Detroit, the automaker’s hometown.
Ford Motor Co., the second-biggest U.S. automaker, has said it doesn’t need emergency aid.
GM and Auburn Hills, Michigan-based Chrysler must provide warrants for non-voting stock, limit executive pay, open up financial records, not issue dividends until the debt is repaid and give the government veto power over transactions larger than $100 million. They also have to agree not to use corporate jets.
Debt Terms, Czar
Government debt will become senior to other borrowing, to the extent allowed by law, and the automakers must cut their debt by two-thirds in an equity exchange.
Joel Kaplan, Bush’s deputy chief of staff, said the Treasury secretary would in effect be the so-called car czar, enforcing deadlines and holding authority to revoke the loans.
Bush also linked the assistance to changes in automakers’ union agreements, stipulating that half of the companies’ payments to a United Auto Workers retirement fund be made in equity.
A program that pays UAW members when they don’t work must be eliminated, and union labor costs and rules must be recrafted to be competitive with those of foreign automakers by Dec. 31.
The requirements could be modified by negotiations with the union and debtholders.
‘Kicked the Can’
“The president has come forward and did the minimum that he could do in order not to get nailed with the failure of the auto companies,” said Gerald Meyers, a professor at the University of Michigan in Ann Arbor and a former CEO of American Motors Corp. “Bush has kicked the can, so to speak.”
GM rose 83 cents, or 23 percent, to $4.49 at 4:03 p.m. in New York Stock Exchange composite trading, while Ford slid 11 cents, or 3.9 percent, to $2.95. The companies’ shares have tumbled 82 percent and 56 percent this year, respectively.
GM will get $4 billion by Dec. 29, $5.4 billion by Jan. 16 and the final $4 billion by Feb. 17, provided Congress agrees to release the second $350 billion of the funds allocated for the $700 billion Troubled Asset Relief Program. Chrysler would get $4 billion by Dec. 29.
U.S. auto sales that slumped last month to the lowest annual rate in 26 years pushed GM and Chrysler to the brink of failure.
Reeling from almost $73 billion in losses since 2004, GM reported $16.2 billion in cash as of Sept. 30, and needs $11 billion to pay monthly bills. Its 2008 U.S. sales declined 22 percent through November.
Cerberus Capital Management LP’s Chrysler has been battered by a 28 percent plunge in U.S. sales, the most among major automakers. It finished the third quarter with $6.1 billion in cash and needs at least $3 billion to operate, Chief Executive Officer Robert Nardelli told Congress on Nov. 18.
GM’s Challenges
For GM, the two biggest challenges will be working out the debt-for-equity swap with debtholders and completing agreements with unions, Wagoner said at the briefing. GM halted its dividend in July.
UAW leaders agreed Dec. 3 to suspend the program that pays laid-off employees after their jobs end, and to postpone automakers’ contributions to the new union-run trusts that will take on responsibility for retirees’ medical care.
Some of the union conditions match those developed last week by Republican Tennessee Senator Bob Corker in a failed attempt to win support of Senate Republicans for a $34 billion congressional bailout.
“While we appreciate that President Bush has taken the emergency action needed to help America’s auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers,” UAW President Ron Gettelfinger said in a statement.
Working With Debtholders
GM will need to persuade debtholders such as Franklin Resources Inc. and Pimco Advisors LP to accept two-thirds less than the face value of their bonds as part of a plan to cut about $62 billion in debt, including future obligations to the health-care fund.
Excluding the retiree-fund obligations, GM’s debt was $43.3 billion at the end of September.
“Negotiations will be very complex and unprecedented,” Kip Penniman, an analyst at KDP Investment Advisors Inc. in Montpelier, Vermont, wrote in a report today. “Bondholders with short-maturity notes will likely argue that their recoveries should be greater than long-dated notes. Secured creditors will be wary of taking any haircut.”
Chrysler debtholders, suppliers and dealers all will need to show “continued support” to help create a viable business plan by March, Nardelli told employees in an e-mail.
Cerberus’s View
Cerberus, the New York-based buyout firm that bought 80.1 percent of Chrysler from Daimler AG for $7.4 billion last year, said it would hand over equity in Chrysler’s automotive operations to employees and creditors under the rescue plan.
Fitch Ratings cut both GM and Chrysler debt to C, the last grade above default, from CCC, on concern the automakers don’t have enough equity to meet the federal requirements or the debt exchange, and may still have to seek court protection.
“The threat of a bankruptcy remains,” Fitch said.
GM’s 8.375 percent bonds due in July 2033 rose 3 cents to 18.5 cents on the dollar, yielding 45.2 percent, according to Trace, the bond-pricing service of the Financial Industry Regulatory Authority. Ford’s 7.45 percent bonds due in July 2031 gained 0.5 cent to 25.5 cents on the dollar, yielding 29.4 percent, Trace data showed. for more details www.bloomberg.com www.uniqueinstitutes.org for india news
The Bush administration threw them a $13.4 billion lifeline from the U.S. bank-bailout program, with $4 billion more for GM in February provided Congress expands that fund. In exchange, the government gets warrants that will allow it to profit if the rescue succeeds and seniority over much of the companies’ debt if the effort fails.
Today’s move gives the U.S. wide authority to call the shots in the auto industry for the first time since the 1980s bailout of Chrysler Corp. and keeps GM and Chrysler alive long enough for a broader reorganization plan from the incoming Congress and President-elect Barack Obama.
“The restructuring they’re going to have to go through will be huge,” said Maryann Keller, an independent auto analyst and consultant in Greenwich, Connecticut. “This is money to tide them over. They’re going to come back for more money. That’s when the government is going to have to decide whether they’re viable businesses.”
The White House stepped in after a compromise plan backed by President George W. Bush and House Democrats failed to pass the Senate, thwarting Bush’s aim to avoid a “disorderly” bankruptcy that would have further weakened the U.S. economy.
Obama endorsed the plan, calling it a “necessary step” to “save this critical industry.”
March 31 Deadline
GM, the biggest U.S. automaker, and No. 3 Chrysler have until March 31 to meet the government terms or have the Treasury Department call the loans. Such a step would likely force the companies into bankruptcy, because they had said they were only weeks away from insolvency without an infusion of cash.
“Our focus now turns to rapidly and fully implementing our restructuring plan,” GM Chief Executive Officer Rick Wagoner said at a news conference in Detroit, the automaker’s hometown.
Ford Motor Co., the second-biggest U.S. automaker, has said it doesn’t need emergency aid.
GM and Auburn Hills, Michigan-based Chrysler must provide warrants for non-voting stock, limit executive pay, open up financial records, not issue dividends until the debt is repaid and give the government veto power over transactions larger than $100 million. They also have to agree not to use corporate jets.
Debt Terms, Czar
Government debt will become senior to other borrowing, to the extent allowed by law, and the automakers must cut their debt by two-thirds in an equity exchange.
Joel Kaplan, Bush’s deputy chief of staff, said the Treasury secretary would in effect be the so-called car czar, enforcing deadlines and holding authority to revoke the loans.
Bush also linked the assistance to changes in automakers’ union agreements, stipulating that half of the companies’ payments to a United Auto Workers retirement fund be made in equity.
A program that pays UAW members when they don’t work must be eliminated, and union labor costs and rules must be recrafted to be competitive with those of foreign automakers by Dec. 31.
The requirements could be modified by negotiations with the union and debtholders.
‘Kicked the Can’
“The president has come forward and did the minimum that he could do in order not to get nailed with the failure of the auto companies,” said Gerald Meyers, a professor at the University of Michigan in Ann Arbor and a former CEO of American Motors Corp. “Bush has kicked the can, so to speak.”
GM rose 83 cents, or 23 percent, to $4.49 at 4:03 p.m. in New York Stock Exchange composite trading, while Ford slid 11 cents, or 3.9 percent, to $2.95. The companies’ shares have tumbled 82 percent and 56 percent this year, respectively.
GM will get $4 billion by Dec. 29, $5.4 billion by Jan. 16 and the final $4 billion by Feb. 17, provided Congress agrees to release the second $350 billion of the funds allocated for the $700 billion Troubled Asset Relief Program. Chrysler would get $4 billion by Dec. 29.
U.S. auto sales that slumped last month to the lowest annual rate in 26 years pushed GM and Chrysler to the brink of failure.
Reeling from almost $73 billion in losses since 2004, GM reported $16.2 billion in cash as of Sept. 30, and needs $11 billion to pay monthly bills. Its 2008 U.S. sales declined 22 percent through November.
Cerberus Capital Management LP’s Chrysler has been battered by a 28 percent plunge in U.S. sales, the most among major automakers. It finished the third quarter with $6.1 billion in cash and needs at least $3 billion to operate, Chief Executive Officer Robert Nardelli told Congress on Nov. 18.
GM’s Challenges
For GM, the two biggest challenges will be working out the debt-for-equity swap with debtholders and completing agreements with unions, Wagoner said at the briefing. GM halted its dividend in July.
UAW leaders agreed Dec. 3 to suspend the program that pays laid-off employees after their jobs end, and to postpone automakers’ contributions to the new union-run trusts that will take on responsibility for retirees’ medical care.
Some of the union conditions match those developed last week by Republican Tennessee Senator Bob Corker in a failed attempt to win support of Senate Republicans for a $34 billion congressional bailout.
“While we appreciate that President Bush has taken the emergency action needed to help America’s auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers,” UAW President Ron Gettelfinger said in a statement.
Working With Debtholders
GM will need to persuade debtholders such as Franklin Resources Inc. and Pimco Advisors LP to accept two-thirds less than the face value of their bonds as part of a plan to cut about $62 billion in debt, including future obligations to the health-care fund.
Excluding the retiree-fund obligations, GM’s debt was $43.3 billion at the end of September.
“Negotiations will be very complex and unprecedented,” Kip Penniman, an analyst at KDP Investment Advisors Inc. in Montpelier, Vermont, wrote in a report today. “Bondholders with short-maturity notes will likely argue that their recoveries should be greater than long-dated notes. Secured creditors will be wary of taking any haircut.”
Chrysler debtholders, suppliers and dealers all will need to show “continued support” to help create a viable business plan by March, Nardelli told employees in an e-mail.
Cerberus’s View
Cerberus, the New York-based buyout firm that bought 80.1 percent of Chrysler from Daimler AG for $7.4 billion last year, said it would hand over equity in Chrysler’s automotive operations to employees and creditors under the rescue plan.
Fitch Ratings cut both GM and Chrysler debt to C, the last grade above default, from CCC, on concern the automakers don’t have enough equity to meet the federal requirements or the debt exchange, and may still have to seek court protection.
“The threat of a bankruptcy remains,” Fitch said.
GM’s 8.375 percent bonds due in July 2033 rose 3 cents to 18.5 cents on the dollar, yielding 45.2 percent, according to Trace, the bond-pricing service of the Financial Industry Regulatory Authority. Ford’s 7.45 percent bonds due in July 2031 gained 0.5 cent to 25.5 cents on the dollar, yielding 29.4 percent, Trace data showed. for more details www.bloomberg.com www.uniqueinstitutes.org for india news
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