Media Teleconference to Examine Future of Automotive Sector Distress

Issue:

The prospect of tapped-out consumers cutting back on spending and credit markets tightening intensify the financial distress for the automotive sector. Despite adjustments to their recovery plans and a $25 billion loan package from the government, automakers and parts manufacturers continue to face a grim future. A panel of experts specializing in automotive company bankruptcies will discuss the latest problems in this sector, as well as the outlook for the automotive industry.

Who:

Speakers for the program include experts in the field of restructuring distressed automotive companies:

• Deborah L. Thorne is a partner at Barnes & Thornburg LLP (Chicago).
• Ronald J. Silverman is a partner with Bingham McCutchen LLP (New York).
• Ben Pickering is a senior managing director at Mesirow Financial Consulting, LLC (New York).

Background:

U.S. automakers and parts manufacturers at the start of 2008 were trying to weather the effects of declining sales, increasing gas and commodity prices, legacy pension liabilities and the reduced availability to credit. Despite revisiting their financial strategies, the financial storm surrounding the automotive industry has intensified during the current credit crisis as sales continue to fall and financing for operations becomes more elusive.

Research firm Autodata reported earlier this month that September vehicle sales decreased 27 percent over the past year as General Motors, Toyota, Ford and Chrysler, the four largest automakers in the U.S. market, reported double-digit sales drops. Auto parts makers’ financial distress is being compounded by vehicle manufacturers’ decisions to reduce production and impose factory shutdowns as their car sales fall. Auto parts manufacturer Delphi Corp., which continues to operate under chapter 11 protection, experienced difficulty lining up exit financing after equity investors pulled out of a deal to invest up to $2.55 billion in April.

The teleconference features top experts who have worked with financially distressed automotive companies discussing the current situation of the automotive industry, as well as their views on future trends and prospects for improvement in the sector.