Less than three and a half years after Chrysler Group LLC’s bankrupt predecessor paid out 29 cents on the dollar to creditors, Chief Executive Officer Sergio Marchionne can point to the bond market for an endorsement.
By David Welch April 29 (Bloomberg BusinessWeek) -- The 15 General Motors dealers who flew to Detroit last September for a dinner with GM management were not an easily rattled bunch. They had endured the worst auto sales slide in 25 years, as well as the bankruptcy of the iconic carmaker on which they had built their businesses. Only three months had passed since GM accepted a $50 billion federal bailout, announcing the retirement of four of its eight brands and the shutting down of 1,900 dealers—a third of its domestic retail network. These dealers were the survivors, some of the more prosperous people in their towns, and they wanted a little reassurance. CEO Fritz Henderson gathered the group in a private conference room at the Westin Detroit Metro Airport and tried to demonstrate that he had a plan, according to an executive in the room who asked not to be named because he was not authorized to describe the dinner. Henderson announced that GM was going on the
Navistar International Corp. has gone from being more creditworthy than its peers to less in the past 3 weeks as a drop in earnings signal troubles beyond its bet on a new engine that has yet to win regulatory approval.
A benchmark gauge of corporate credit risk rose by the most in almost three weeks after data showed service industries in the U.S. expanded less than forecast as the economic recovery struggles to gather pace.