DETROIT – The negotiations over what happens at Chrysler are getting to be contentious. The Wall Street Journal reports that Chrysler’s banks rejected the government’s request that they slash the company’s debt by 85 percent. No dice, say the bankers. They offer to cut that debt by only 35 percent, plus they want 40 percent of Chrysler’s stock, a seat on the board, and they want Fiat to put in $1 billion.
They’re also mad that the UAW is supposed to get $3 billion for the VEBA fund, even though the union is much farther down the list of who’s supposed to get paid. And these bankers seem to hold all the aces. They tell the government they think they can recoup 66 percent of their debt if the company is forced into liquidation.
Honda’s operating profit last fiscal year is expected to be better than estimated. According to Reuters, the company’s profit was boosted by a weaker yen and better-than-expected sales in China. Don’t forget, Honda�??s motorcycle sales are booming and that�??s a key reason why its profits are 10 billion yen more than anticipated even though it�??s still an 84 percent drop from last year.
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