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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: TH who wrote (100987)	2/6/2009 7:29:55 AM
From: orkrious	Read Replies (1) \| Respond to of 110194

More this weekend, including a story about a supplier that GREW sales last year (only one I know of that did this in 08, and I'll be interested if anyone on the thread can guess how they did this). They built stuff for the military.

To: TH who wrote (100987)	2/6/2009 12:50:12 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 110194

thank you so much, i'm glad i asked...also found an article yesterday on how the F pension fund is going to need a BIG cash infusion....look forward to your update....this is the article on the pension fund: Ford May Need to Put $4 Billion Into Pension, Spurring Aid Bid By Keith Naughton Feb. 6 (Bloomberg) -- Ford Motor Co. may have to contribute $4 billion to its pension plan after a 2008 shortfall, a cash drain that risks dragging the second-largest U.S. automaker closer to a federal bailout. The collapsing stock market left the fund with a $4.1 billion deficit for its projected obligations, after 2007’s $3 billion surplus, Ford said in its fourth-quarter financial results. That may force an infusion of money starting next year, according to the viability plan filed with Congress in December. Diverting money to the retirement program would add to the strain on the only Detroit automaker not relying on U.S. aid. With domestic auto sales at their lowest since the early 1980s, Ford said Jan. 29 it lost a record $14.6 billion last year and on Feb. 3 tapped its entire $10.1 billion line of credit while the money was still available. “The pension is another demand on cash at a time when Ford cannot really afford it,” said Pete Hastings, a fixed-income analyst with Morgan Keegan Inc. in Memphis, Tennessee. Ford is working to pare costs through steps such as closing plants and is trying to raise money by selling its Volvo unit. The Dearborn, Michigan-based automaker is in early talks with China’s Geely Automobile Holdings Ltd., people familiar with the matter have said. The pension fund hasn’t been a drain on Ford’s resources in recent years, and the company last contributed to the program in 2005, with a $1.4 billion deposit. Ford cited the new shortfall in its Jan. 29 earnings release. Chief Executive Officer Alan Mulally said again that day that Ford believes it has enough liquidity to avoid asking for federal aid. ‘Watch It Carefully’ “Any time you’re underfunded, that’s not a good thing,” Executive Vice President Mark Fields said in an interview. “We’ve got to watch it carefully.” Ford’s filing to Congress on Dec. 2 signaled concern that the company might have to kick in money for the fund that provides retirement benefits to 335,000 former employees. The plan experienced a “significant, unexpected reduction” in value because of the stock market’s 2008 slump, Ford said. “Without an improvement in market conditions, required contributions to our major U.S. pension plan are expected,” Ford said in the filing. The contribution would be $3 billion to $4 billion, “starting in 2010.” The prospect of a pension contribution is “further stressing cash levels,” and Ford may need to seek government assistance later this year, Barclays Capital analyst Brian Johnson in Chicago wrote in a Feb. 2 report. He rates the stock as “underweight/neutral” with a $1 target price. Ford fell 2 cents to $1.93 yesterday in New York Stock Exchange composite trading, dragging the shares’ decline to 70 percent over the past year. Cash Declines Ford said its available cash fell $21 billion last year to $13.4 billion. The automaker has $38 billion in bonds and loans coming due by 2011, according to Bloomberg data. Johnson expects Ford to reach its minimum cash levels in the second half of 2009. Ford won’t say how much cash it needs to operate. “If auto sales don’t recover and in 2010 they have to put $3 billion or $4 billion into the pension fund, that means they’ll have to get cash from the government,” Johnson said in an interview. General Motors Corp., which has been pledged $13.4 billion in federal loans, has said its pension plan had a shortfall of $1.8 billion as of Oct. 31, down from a $20 billion surplus 10 months earlier. The biggest U.S. automaker has said it has no plans to contribute to the fund soon. Ford and GM’s pension liabilities also are putting stress on the government. The Pension Benefit Guaranty Corp., which bails out failed retirement programs, estimated that the U.S. plans had a collective $47 billion deficit last year. Almost half of that shortfall came from manufacturers including automakers and parts suppliers. The PBGC said it has worked with 13 bankrupt auto-parts companies since 2005 to keep their plans from failing, and took control of the retirement program at partsmaker Collins & Aikman Corp. after it went bankrupt in 2007. To contact the reporter on this story: Keith Naughton in Southfield, Michigan, at Knaughton3@bloomberg.net Last Updated: February 6, 2009 00:00 EST