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It has been a tense couple of months at GM Korea. Back in February, the company announced a restructuring plan for the division which included the closure of the Gunsan plant (one of the four plants operating in South Korea), and voluntary redundancies for 2,600 workers to stem the hemorrhaging of cash. Recently, GM has been pushing its workers’ union for concessions that would total $80 million. This is part of an effort to get a $500 million injection from the South Korean government to pay suppliers and workers. The workers union weren't buying, threatening to strike and trashing company executive offices earlier this month. Then GM threw down the gauntlet, either agree to the concessions by April 20th or we begin bankruptcy proceedings. “Without concessions from the labor union and clear resolution from stakeholders, the company has no choice but to go ahead with rehabilitation proceedings,” said GM Korea executive Kaher Kazem in an email to employees. Unfortunately, the date passed with no agreement and it seemed bankruptcy was on the horizon. But both GM and union rep would continue to talk over the weekend to see if a deal could be reached. At the 11th hour, an agreement was reached. “Through the latest agreement, GM Korea will be a competitive manufacturing company,” said Kazem in a statement today. According to Reuters who got to see the deal, the union agreed to freeze base wages, skip bonuses for this year, and cut back on benefits. “The labor union made huge concessions to save the company,” said Hong Young-pyo, a lawmaker of the ruling Democratic Party who worked on the mediation between the two groups. A union spokesman declined to comment when contacted by Reuters, only saying that workers will vote on the agreement later this week. The deal now allows the Korean government to fund Korea Development Bank (KDB) - the second largest shareholder in GM Korea - to provide support. It also allows GM to allocate two new models for the region. But some analysts are still uncertain as to the future of GM Korea. Labor costs, poor sales, and expensive export costs have some wondering if GM is in it for the long run or are planning an exit strategy. “GM has extended the lifeline of GM Korea, but not sure how long it will last,” said Lee Hang-koo, a senior research fellow at Korea Institute for Industrial Economics & Trade. Source: Reuters View full article -
It has been a tense couple of months at GM Korea. Back in February, the company announced a restructuring plan for the division which included the closure of the Gunsan plant (one of the four plants operating in South Korea), and voluntary redundancies for 2,600 workers to stem the hemorrhaging of cash. Recently, GM has been pushing its workers’ union for concessions that would total $80 million. This is part of an effort to get a $500 million injection from the South Korean government to pay suppliers and workers. The workers union weren't buying, threatening to strike and trashing company executive offices earlier this month. Then GM threw down the gauntlet, either agree to the concessions by April 20th or we begin bankruptcy proceedings. “Without concessions from the labor union and clear resolution from stakeholders, the company has no choice but to go ahead with rehabilitation proceedings,” said GM Korea executive Kaher Kazem in an email to employees. Unfortunately, the date passed with no agreement and it seemed bankruptcy was on the horizon. But both GM and union rep would continue to talk over the weekend to see if a deal could be reached. At the 11th hour, an agreement was reached. “Through the latest agreement, GM Korea will be a competitive manufacturing company,” said Kazem in a statement today. According to Reuters who got to see the deal, the union agreed to freeze base wages, skip bonuses for this year, and cut back on benefits. “The labor union made huge concessions to save the company,” said Hong Young-pyo, a lawmaker of the ruling Democratic Party who worked on the mediation between the two groups. A union spokesman declined to comment when contacted by Reuters, only saying that workers will vote on the agreement later this week. The deal now allows the Korean government to fund Korea Development Bank (KDB) - the second largest shareholder in GM Korea - to provide support. It also allows GM to allocate two new models for the region. But some analysts are still uncertain as to the future of GM Korea. Labor costs, poor sales, and expensive export costs have some wondering if GM is in it for the long run or are planning an exit strategy. “GM has extended the lifeline of GM Korea, but not sure how long it will last,” said Lee Hang-koo, a senior research fellow at Korea Institute for Industrial Economics & Trade. Source: Reuters -
Airbag manufacturer Takata is at the center of one the largest automotive recalls which affect an estimated 100 million vehicles from two dozen automakers around the world. The airbags in question have inflators that can rupture and send shrapnel flying in the event of a crash. They have been linked to at least 16 deaths and 180 injuries. Now, the next chapter begins as Takata filed for bankruptcy. Yesterday, TK Holdings (Takata's U.S. operations) filed for Chapter 11 bankruptcy in Delaware on Sunday with liabilities totaling between $10 billion to $50 billion. The company would file for bankruptcy in Japan today. Takata also announced that it would be selling its key assets to Key Safety Systems, a Michigan-based supplier owned by China's Ningbo Joyson Electronic Corp. The purchase will cost Key $1.6 billion. At a press conference today in Tokyo, CEO Shigehisa Takada said the company had no choice to sell their assets due to liabilities increasing and finances collapsing. "We spent much time on negotiations, it was extremely difficult to reach an agreement with more than 10 carmakers worldwide and a sponsor candidate company," said Takada. "If things are left as is, we are aware of risks that we may not able to raise fund and to continue stable supply of products. In light of the management environment we face, the state of negotiations with the sponsor candidate and carmakers, and the external expert committee's opinion, we have decided today to file for bankruptcy protection." Takata attorney Nobuaki Kobayashi said the total amount of liabilities was still unknown and the company is in talks with automakers to figure out the worldwide cost. According to Automotive News, analysts put potential liabilities as high as $10 billion for ongoing recalls, penalties and settlements. A report from Tokyo Shoko Research Ltd., puts Takata total liabilities at 1.7 trillion yen (about $15 billion). Back in February, Takata pleaded guilty to wire fraud charges in the U.S. for withholding key information about the defects and manipulating test data. Source: Automotive News (Subscription Required), Reuters View full article
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Airbag manufacturer Takata is at the center of one the largest automotive recalls which affect an estimated 100 million vehicles from two dozen automakers around the world. The airbags in question have inflators that can rupture and send shrapnel flying in the event of a crash. They have been linked to at least 16 deaths and 180 injuries. Now, the next chapter begins as Takata filed for bankruptcy. Yesterday, TK Holdings (Takata's U.S. operations) filed for Chapter 11 bankruptcy in Delaware on Sunday with liabilities totaling between $10 billion to $50 billion. The company would file for bankruptcy in Japan today. Takata also announced that it would be selling its key assets to Key Safety Systems, a Michigan-based supplier owned by China's Ningbo Joyson Electronic Corp. The purchase will cost Key $1.6 billion. At a press conference today in Tokyo, CEO Shigehisa Takada said the company had no choice to sell their assets due to liabilities increasing and finances collapsing. "We spent much time on negotiations, it was extremely difficult to reach an agreement with more than 10 carmakers worldwide and a sponsor candidate company," said Takada. "If things are left as is, we are aware of risks that we may not able to raise fund and to continue stable supply of products. In light of the management environment we face, the state of negotiations with the sponsor candidate and carmakers, and the external expert committee's opinion, we have decided today to file for bankruptcy protection." Takata attorney Nobuaki Kobayashi said the total amount of liabilities was still unknown and the company is in talks with automakers to figure out the worldwide cost. According to Automotive News, analysts put potential liabilities as high as $10 billion for ongoing recalls, penalties and settlements. A report from Tokyo Shoko Research Ltd., puts Takata total liabilities at 1.7 trillion yen (about $15 billion). Back in February, Takata pleaded guilty to wire fraud charges in the U.S. for withholding key information about the defects and manipulating test data. Source: Automotive News (Subscription Required), Reuters -
One of the groups that haven't been able to take any legal action against General Motors over the faulty ignition switch were those who bought the affected vehicles before the company announced bankruptcy in 2009. Last year, a bankruptcy judge said that New GM was shielded from liabiliites over the actions taken by Old GM. But today, the U.S. Second Circuit Court of Appeals in Manhattan reversed that decision. In the ruling, the court stated that New GM must face some of the claims from owners that arose from their actions before their bankruptcy. “We are reviewing the ruling and its impact. Even if some claims are ultimately allowed to proceed, the plaintiffs must still prove their cases," said GM spokesman Jim Cain in an email to the Wall Street Journal. This decision could expose GM to additional costs as it tries to move away from this mess. According to the ruling, the protection given to GM shielded them from up to $10 billion of liability claims. Source: Automotive News (Subscription Required), Wall Street Journal (Subscription Required) -
One of the groups that haven't been able to take any legal action against General Motors over the faulty ignition switch were those who bought the affected vehicles before the company announced bankruptcy in 2009. Last year, a bankruptcy judge said that New GM was shielded from liabiliites over the actions taken by Old GM. But today, the U.S. Second Circuit Court of Appeals in Manhattan reversed that decision. In the ruling, the court stated that New GM must face some of the claims from owners that arose from their actions before their bankruptcy. “We are reviewing the ruling and its impact. Even if some claims are ultimately allowed to proceed, the plaintiffs must still prove their cases," said GM spokesman Jim Cain in an email to the Wall Street Journal. This decision could expose GM to additional costs as it tries to move away from this mess. According to the ruling, the protection given to GM shielded them from up to $10 billion of liability claims. Source: Automotive News (Subscription Required), Wall Street Journal (Subscription Required) View full article
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William Maley Staff Writer - CheersandGears.com November 25, 2013 The Department of Energy (DOE) announced on Friday that it had found a buyer for dormant automaker, Fisker. The buyer is Hybrid Tech Holdings, LLC, a company founded by Richard Li, one of the people who was interested in buying Fisker. So how much did Hybrid Tech pay for the assets of Fisker? Reports say around $25 million, which means the DOE lost around $139 million in its investment into Fisker. To keep the transfer process smooth and make sure Fisker's creditors and suppliers get paid, the company has filled for Chapter 11 Bankruptcy in a California court. "After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive's value for the benefit of all stakeholders. We believe that the Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid's leadership," said Marc Beilinson, Fisker Automotive's Chief Restructuring Officer in a statement. What does Hybrid Tech have in mind for Fisker? The company plans to restart production and sales of the Karma sedan, and work on developing new vehicles. "As we continue to examine Fisker's opportunities, we will be making decisions about the structure and footprint of the new business," said Caroline Langdale, a spokeswoman for Hybrid Technology. Source: Automotive News (Subscription Required), Fisker William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] you can follow him on twitter at @realmudmonster. Press Release is on Page 2 Fisker Automotive Announces Agreement for Asset Sale to Hybrid Tech Holdings ANAHEIM HILLS, Calif., Nov. 22, 2013 /PRNewswire/ -- Fisker Automotive, Inc. and Fisker Automotive Holdings, Inc. (collectively, Fisker Automotive) announced today that they have entered into an asset purchase agreement with Hybrid Tech Holdings, LLC (Hybrid) for the sale of substantially all of its assets. Hybrid is the lender under an approximately $170 million loan secured by first liens on substantially all of Fisker Automotive's assets. Hybrid's parent, Hybrid Technology, LLC (Hybrid Technology), purchased the loan from the U.S. Department of Energy (DoE) after DoE conducted a robust marketing process and auction. To facilitate the sale process and provide for orderly distributions to creditors, Fisker Automotive has voluntarily filed petitions under Chapter 11 of the U.S. Bankruptcy Code. Hybrid Technology has committed up to approximately $8 million in debtor-in-possession (DIP) financing to fund the sale and Chapter 11 process. "After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive's value for the benefit of all stakeholders," said Marc Beilinson, Fisker Automotive's Chief Restructuring Officer. "We believe that the Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid's leadership." -
William Maley Staff Writer - CheersandGears.com November 25, 2013 The Department of Energy (DOE) announced on Friday that it had found a buyer for dormant automaker, Fisker. The buyer is Hybrid Tech Holdings, LLC, a company founded by Richard Li, one of the people who was interested in buying Fisker. So how much did Hybrid Tech pay for the assets of Fisker? Reports say around $25 million, which means the DOE lost around $139 million in its investment into Fisker. To keep the transfer process smooth and make sure Fisker's creditors and suppliers get paid, the company has filled for Chapter 11 Bankruptcy in a California court. "After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive's value for the benefit of all stakeholders. We believe that the Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid's leadership," said Marc Beilinson, Fisker Automotive's Chief Restructuring Officer in a statement. What does Hybrid Tech have in mind for Fisker? The company plans to restart production and sales of the Karma sedan, and work on developing new vehicles. "As we continue to examine Fisker's opportunities, we will be making decisions about the structure and footprint of the new business," said Caroline Langdale, a spokeswoman for Hybrid Technology. Source: Automotive News (Subscription Required), Fisker William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] you can follow him on twitter at @realmudmonster. Press Release is on Page 2 Fisker Automotive Announces Agreement for Asset Sale to Hybrid Tech Holdings ANAHEIM HILLS, Calif., Nov. 22, 2013 /PRNewswire/ -- Fisker Automotive, Inc. and Fisker Automotive Holdings, Inc. (collectively, Fisker Automotive) announced today that they have entered into an asset purchase agreement with Hybrid Tech Holdings, LLC (Hybrid) for the sale of substantially all of its assets. Hybrid is the lender under an approximately $170 million loan secured by first liens on substantially all of Fisker Automotive's assets. Hybrid's parent, Hybrid Technology, LLC (Hybrid Technology), purchased the loan from the U.S. Department of Energy (DoE) after DoE conducted a robust marketing process and auction. To facilitate the sale process and provide for orderly distributions to creditors, Fisker Automotive has voluntarily filed petitions under Chapter 11 of the U.S. Bankruptcy Code. Hybrid Technology has committed up to approximately $8 million in debtor-in-possession (DIP) financing to fund the sale and Chapter 11 process. "After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive's value for the benefit of all stakeholders," said Marc Beilinson, Fisker Automotive's Chief Restructuring Officer. "We believe that the Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid's leadership." View full article
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William Maley Staff Writer - CheersandGears.com June 19, 2013 Another automaker bites the dust. Carbon Motors, the company behind the futuristic E7 police vehicle has filled for chapter seven bankruptcy (i.e. liquidation) last Friday. The Indianapolis Business Journal says the company's bankruptcy paperworks lists liabilities of $21.7 million and assets of just $18,976. Those assets include one E7 prototype, some furniture, books, and intellectual property. Carbon Motor's business plan hinged upon getting a $310 million loan from U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program. Last March, the Department of Energy declined their application. CEO William Santana Li said at the time the company was a victim of politics and would be looking elsewhere for money. It seems their search didn't work since there has been radio silence and the company quietly pulled out of its plant in Connerville, Indiana back in April. “The entire business model was premised on that entire loan coming through. It was a huge, unexpected disappointment for management as well as the investors,” said Henry Efroymson, a partner at Ice Miller LLP, who is representing Carbon Motors. Many of the liabilities in Carbon Motor's filling are from investors and suppliers, such as BMW which would have supplied a diesel engine for the vehicle. The chapter seven bankruptcy also gives the company protection from any litigation brought against the company, such as three former executives suing the company for unpaid wages. Source: Indianapolis Business Journal, 2 William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. View full article
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William Maley Staff Writer - CheersandGears.com June 19, 2013 Another automaker bites the dust. Carbon Motors, the company behind the futuristic E7 police vehicle has filled for chapter seven bankruptcy (i.e. liquidation) last Friday. The Indianapolis Business Journal says the company's bankruptcy paperworks lists liabilities of $21.7 million and assets of just $18,976. Those assets include one E7 prototype, some furniture, books, and intellectual property. Carbon Motor's business plan hinged upon getting a $310 million loan from U.S. Department of Energy's Advanced Technology Vehicles Manufacturing program. Last March, the Department of Energy declined their application. CEO William Santana Li said at the time the company was a victim of politics and would be looking elsewhere for money. It seems their search didn't work since there has been radio silence and the company quietly pulled out of its plant in Connerville, Indiana back in April. “The entire business model was premised on that entire loan coming through. It was a huge, unexpected disappointment for management as well as the investors,” said Henry Efroymson, a partner at Ice Miller LLP, who is representing Carbon Motors. Many of the liabilities in Carbon Motor's filling are from investors and suppliers, such as BMW which would have supplied a diesel engine for the vehicle. The chapter seven bankruptcy also gives the company protection from any litigation brought against the company, such as three former executives suing the company for unpaid wages. Source: Indianapolis Business Journal, 2 William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. -
By William Maley Staff Writer - CheersandGears.com May 26, 2013 Two groups are trying to get their hands on what remains of Fisker Automotive. Group one is VL Automotive (the fine folks who are planning to make the Destino) and China's Wanxiang Group have put in a joint bid of around $20 million, a far cry from Fisker Automotive's almost $2 billion estimate from a investor document filing obtained by Reuters. As we reported earlier this month, Lutz said that VL Automotive could with Fisker's suppliers to keep the Karma in production, but that could become a logistics nightmare. "I want Fisker to live and succeed, if only to ensure a continuing supply of Karma bodies for my and my parter's (sic) VL Destino, a de-electrified Karma with a Corvette drive train, for which there is brisk demand," Lutz wrote in a blog piece for Forbes.com in April. The second group is a investment group being led by Hong Kong billionaire and Fisker investor Richard Li. This group got a huge boost this past week when founder and former CEO, Henrik Fisker joined the group. Sources say the group is offering between $25 to $30 million. Source: Reuters, 2, 3 William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. -
By William Maley Staff Writer - CheersandGears.com May 26, 2013 Two groups are trying to get their hands on what remains of Fisker Automotive. Group one is VL Automotive (the fine folks who are planning to make the Destino) and China's Wanxiang Group have put in a joint bid of around $20 million, a far cry from Fisker Automotive's almost $2 billion estimate from a investor document filing obtained by Reuters. As we reported earlier this month, Lutz said that VL Automotive could with Fisker's suppliers to keep the Karma in production, but that could become a logistics nightmare. "I want Fisker to live and succeed, if only to ensure a continuing supply of Karma bodies for my and my parter's (sic) VL Destino, a de-electrified Karma with a Corvette drive train, for which there is brisk demand," Lutz wrote in a blog piece for Forbes.com in April. The second group is a investment group being led by Hong Kong billionaire and Fisker investor Richard Li. This group got a huge boost this past week when founder and former CEO, Henrik Fisker joined the group. Sources say the group is offering between $25 to $30 million. Source: Reuters, 2, 3 William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. View full article
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By William Maley Staff Writer - CheersandGears.com April 10, 2013 It seems the end is close for Fisker. Reuters is reporting that Fisker could be filling for Chapter 11 bankruptcy this week due to pressure of the U.S. Department of Energy who want the company to pay back nearly $200 million in government loans. A source tells Reuters that Fisker's lawyers have drawn up the documents needed to file for bankruptcy, and are ready to go within the next few days. Fisker and the Department of Energy's relationship has been strained over the past few months due to missing milestones for the loans, not building any vehicles since last summer, and number of other problems. The company has been has been trying to renegotiate terms of a payment due on April 20th with the Department of Energy. However, the Department of Energy said enough was enough and is pushing Fisker in bankruptcy. Source: Reuters William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. View full article
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By William Maley Staff Writer - CheersandGears.com April 10, 2013 It seems the end is close for Fisker. Reuters is reporting that Fisker could be filling for Chapter 11 bankruptcy this week due to pressure of the U.S. Department of Energy who want the company to pay back nearly $200 million in government loans. A source tells Reuters that Fisker's lawyers have drawn up the documents needed to file for bankruptcy, and are ready to go within the next few days. Fisker and the Department of Energy's relationship has been strained over the past few months due to missing milestones for the loans, not building any vehicles since last summer, and number of other problems. The company has been has been trying to renegotiate terms of a payment due on April 20th with the Department of Energy. However, the Department of Energy said enough was enough and is pushing Fisker in bankruptcy. Source: Reuters William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. -
By William Maley Staff Writer - CheersandGears.com March 6, 2013 The end is here for Suzuki automobiles in the U.S. On Thursday, a judge from U.S. Bankruptcy Court for the Central District of California in Santa Ana approved Suzuki's Chapter 11 reorganization plan. The plan calls for American Suzuki's motorcycle, ATV and marine engine businesses to exit bankruptcy and become part of a new, wholly-owned subsidiary of Suzuki Motor Corp, Suzuki Motor of America. Suzuki's automotive branch will go away after dealer sell off the remaining inventory. "Today's confirmation is a significant milestone and is one of the last remaining steps in our realignment and restructuring process," said Freddie Reiss, American Suzuki's chief restructuring officer in a statement. Source: Automotive News (Subscription Required), Suzuki William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] you can follow him on twitter at @realmudmonster. Press Release is on Page 2 Court Approves American Suzuki Motor Corporation's Chapter 11 Plan BREA, Calif.--(BUSINESS WIRE)--American Suzuki Motor Corporation (the "Company") today announced that the Honorable Scott C. Clarkson of the U.S. Bankruptcy Court for the Central District of California in Santa Ana approved the confirmation of the Company's Chapter 11 Plan, which creditors overwhelmingly accepted. Confirmation of the Plan clears the way for the Company to complete its restructuring process, which is expected to occur on March 31, 2013. "Today's confirmation is a significant milestone and is one of the last remaining steps in our realignment and restructuring process" As previously announced, the Plan approved the Company's sale of its Motorcycles/ATV and Marine divisions and Automotive parts and service operation to a newly organized, wholly-owned subsidiary of Suzuki Motor Corporation. The subsidiary will operate in the continental U.S. as Suzuki Motor of America, Inc. and will use the Suzuki products brand name "Today's confirmation is a significant milestone and is one of the last remaining steps in our realignment and restructuring process," said M. Freddie Reiss, the Company's Chief Restructuring Officer. "During the next few weeks, we will take final steps to implement the Plan, which will allow the Company to sell its Motorcycles/ATV, Marine, Automotive parts and service divisions. This will promote the long-term growth of the Motorcycles/ATV and Marine divisions, as well as providing automotive parts and service through the dealer network." A copy of the Plan is available at www.omnimgt.com. Additional information regarding Company's business realignment can be found at the following website, www.suzuki.com, or via an information hotline at 1-877-465-4819. -
By William Maley Staff Writer - CheersandGears.com March 6, 2013 The end is here for Suzuki automobiles in the U.S. On Thursday, a judge from U.S. Bankruptcy Court for the Central District of California in Santa Ana approved Suzuki's Chapter 11 reorganization plan. The plan calls for American Suzuki's motorcycle, ATV and marine engine businesses to exit bankruptcy and become part of a new, wholly-owned subsidiary of Suzuki Motor Corp, Suzuki Motor of America. Suzuki's automotive branch will go away after dealer sell off the remaining inventory. "Today's confirmation is a significant milestone and is one of the last remaining steps in our realignment and restructuring process," said Freddie Reiss, American Suzuki's chief restructuring officer in a statement. Source: Automotive News (Subscription Required), Suzuki William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] you can follow him on twitter at @realmudmonster. Press Release is on Page 2 Court Approves American Suzuki Motor Corporation's Chapter 11 Plan BREA, Calif.--(BUSINESS WIRE)--American Suzuki Motor Corporation (the "Company") today announced that the Honorable Scott C. Clarkson of the U.S. Bankruptcy Court for the Central District of California in Santa Ana approved the confirmation of the Company's Chapter 11 Plan, which creditors overwhelmingly accepted. Confirmation of the Plan clears the way for the Company to complete its restructuring process, which is expected to occur on March 31, 2013. "Today's confirmation is a significant milestone and is one of the last remaining steps in our realignment and restructuring process" As previously announced, the Plan approved the Company's sale of its Motorcycles/ATV and Marine divisions and Automotive parts and service operation to a newly organized, wholly-owned subsidiary of Suzuki Motor Corporation. The subsidiary will operate in the continental U.S. as Suzuki Motor of America, Inc. and will use the Suzuki products brand name "Today's confirmation is a significant milestone and is one of the last remaining steps in our realignment and restructuring process," said M. Freddie Reiss, the Company's Chief Restructuring Officer. "During the next few weeks, we will take final steps to implement the Plan, which will allow the Company to sell its Motorcycles/ATV, Marine, Automotive parts and service divisions. This will promote the long-term growth of the Motorcycles/ATV and Marine divisions, as well as providing automotive parts and service through the dealer network." A copy of the Plan is available at www.omnimgt.com. Additional information regarding Company's business realignment can be found at the following website, www.suzuki.com, or via an information hotline at 1-877-465-4819. View full article
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William Maley Staff Writer - CheersandGears.com December 6, 2012 A month a after American Suzuki Corporation filled for bankruptcy and announced the closure of its automotive branch, 98% of its dealers (213 dealers) have agreed to a settlement offered by the company. The settlement would compensate dealers 50% within ten days of the agreement, with the rest following after the bankruptcy proceeding. The settlements also allow former dealers to operate as a service centers to provide warranty and repair services for Suzuki vehicles. "We greatly value our relationship with our customers, and it is very important to us that they continue to receive the necessary support from ASMC during and after our restructuring. As these agreements demonstrate, we are working within our current U.S. automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations," said Freddie Reiss, American Suzuki's chief restructuring officer. Source: Automotive News (Subscription Required) William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. Related Stories: Suzuki Vehicles Bid Adieu, Files Chapter 11 Suzuki Dealers Are Stuck Between A Rock And A Hard Place -
William Maley Staff Writer - CheersandGears.com December 6, 2012 A month a after American Suzuki Corporation filled for bankruptcy and announced the closure of its automotive branch, 98% of its dealers (213 dealers) have agreed to a settlement offered by the company. The settlement would compensate dealers 50% within ten days of the agreement, with the rest following after the bankruptcy proceeding. The settlements also allow former dealers to operate as a service centers to provide warranty and repair services for Suzuki vehicles. "We greatly value our relationship with our customers, and it is very important to us that they continue to receive the necessary support from ASMC during and after our restructuring. As these agreements demonstrate, we are working within our current U.S. automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations," said Freddie Reiss, American Suzuki's chief restructuring officer. Source: Automotive News (Subscription Required) William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. Related Stories: Suzuki Vehicles Bid Adieu, Files Chapter 11 Suzuki Dealers Are Stuck Between A Rock And A Hard Place View full article
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William Maley Staff Writer - CheersandGears.com November 5, 2012 We knew the day was coming, just when was the question. Now, that day has arrived. Earlier tonight, American Suzuki Motor Corporation has announced they would be filling for Chapter 11 bankruptcy and close up their automotive division. "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.," said ASMC in a statement tonight. ASMC says they'll honor warranties, as well as supply parts and service cars through its dealer network. As for dealers, ASMC says they'll help dealers transition from selling vehicles to parts and service operations, and in certain cases, wind-down dealer operations. Suzuki won't fully disappear from the U.S. market. The company will still be selling motorcycles, all-terrain vehicles, and marine products. Source: American Suzuki Motor Corporation William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. Press Release is on Page 2 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. View full article
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William Maley Staff Writer - CheersandGears.com November 5, 2012 We knew the day was coming, just when was the question. Now, that day has arrived. Earlier tonight, American Suzuki Motor Corporation has announced they would be filling for Chapter 11 bankruptcy and close up their automotive division. "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.," said ASMC in a statement tonight. ASMC says they'll honor warranties, as well as supply parts and service cars through its dealer network. As for dealers, ASMC says they'll help dealers transition from selling vehicles to parts and service operations, and in certain cases, wind-down dealer operations. Suzuki won't fully disappear from the U.S. market. The company will still be selling motorcycles, all-terrain vehicles, and marine products. Source: American Suzuki Motor Corporation William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. Press Release is on Page 2 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. -
William Maley Editor/Reporter - CheersandGears.com June 13, 2012 Despite the heavy odds against it, Saab will rise up once more. Today, Saab’s bankruptcy administrators, Anne-Marie Pouteaux and Hans L. Bergqvist, announced that National Electric Vehicle Sweden AB has agreed to purchase a majority of Saab. National Electric Vehicle Sweden AB is a consortium made up by Hong Kong-based National Modern Energy Holdings Ltd. and the Japanese investment group Sun Investment LLC. The deal includes a production facility, Saab Tools, test facilities, Saab Powertrain, and the 9-3 architecture. Not included intellectual property rights to the 9-4x or 9-5 and Saab Parts. Neither one of the parties would reveal the purchase price. At a news conference earlier this morning in Trollhattan, NEVS chief Karl Johan Jiang revealed the that the consortium will use the Saab name. Also, NEVS said their first vehicle would be based on the current Saab 9-3 with Japanese technology and come out sometime in late 2013 or 2014. The vehicle will be built in Trollhattan. Source: The New York Times, SaabsUnited View full article
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William Maley Editor/Reporter - CheersandGears.com June 13, 2012 Despite the heavy odds against it, Saab will rise up once more. Today, Saab’s bankruptcy administrators, Anne-Marie Pouteaux and Hans L. Bergqvist, announced that National Electric Vehicle Sweden AB has agreed to purchase a majority of Saab. National Electric Vehicle Sweden AB is a consortium made up by Hong Kong-based National Modern Energy Holdings Ltd. and the Japanese investment group Sun Investment LLC. The deal includes a production facility, Saab Tools, test facilities, Saab Powertrain, and the 9-3 architecture. Not included intellectual property rights to the 9-4x or 9-5 and Saab Parts. Neither one of the parties would reveal the purchase price. At a news conference earlier this morning in Trollhattan, NEVS chief Karl Johan Jiang revealed the that the consortium will use the Saab name. Also, NEVS said their first vehicle would be based on the current Saab 9-3 with Japanese technology and come out sometime in late 2013 or 2014. The vehicle will be built in Trollhattan. Source: The New York Times, SaabsUnited
