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Friday, April 3, 2009

General Motors (GM) and Chrysler will receive bridge loans from the government of Canada and the provincial government of Ontario, however no more will be forthcoming from either Canadian or US governments unless the companies can reinvent themselves.

“This is a regrettable but necessary step to protect the Canadian economy. We are doing this on the assumption that we obviously cannot afford either in the United States or Canada a catastrophic short-term collapse.” said Stephen Harper, Prime Minister of Canada.

“We cannot, we must not, and we will not let our auto industry simply vanish. This industry is, like no other, an emblem of the American spirit; a once and future symbol of America’s success,” said Barack Obama, President of the United States. “These companies – and this industry – must ultimately stand on their own, not as wards of the state.”File:Sinsheim quer.jpg

Chrysler will receive CA$1 billion and may in fact be eligible for as much as CA$4 billion. If Chrysler succeeds in the next 30 days with a restructuring plan it would be eligible for a US$6 billion loan. A part of Chrysler’s restructuring plan must include a partnership with Fiat within 30 days to appease the US administration. Fiat is a supplier of smaller fuel-efficient vehicles, and the merger will help Chrysler to be viable in the North American market. A Chrysler court bankruptcy would inevitably lead to it being sold off.

As a part of Chrysler’s restructuring plans, Tom LaSorda, the president of Chrysler announced that Canadian operations would fold if it does not receive both the US commitment of $2.3 billion of aid and a new Canadian Auto Workers CAW contract to reduce all-in costs by CA$19 per hour. As a result of this announcement Chrysler’s auto sales volume in Canada dropped 23% compared to March of 2008.

GM has until the end of May to restructure its company to receive up to CA$7.5 billion. As part of the companies restructuring, General Motor’s chief executive Rick Wagoner was replaced Sunday with Fritz Henderson, the current chief operating officer. Henderson spoke out on Tuesday that GM has submitted a restructuring plan which would close five plants, and this may be increased to meet the requirements for financial aid. He is in full compliance with Obama’s auto task force to seek bankruptcy if GM cannot negotiate with their unions, bondholders and others.

GM recently brought forward the “GM Total Confidence” program providing consumer purchase protection for customers who lose their job for economic reasons within the first two years from purchase. As a result of Chrysler’s restructuring announcement in Canada, GM’s Canadian vehicle sales volume fell only 17.3% compared to 2008, an increase from the previous month.

GM must reduce some of its legacy costs which include its pensions and union health care costs. A part of GM’s ailments arose from investing in supplying truck and SUVs during an economy of high gas prices when consumers were demanding fuel efficient vehicles.

Tony Clement, Canada’s Minister of Industry, is hoping that the CAW will support the restructuring process and re-negotiate their agreement. Whereas a United Auto Workers negotiator has said, “I don’t see how the UAW will do anything until they see what the bondholders will give up.”

The Obama administration is looking toward bankruptcy proceedings for the automakers, “as a mechanism to help them restructure quickly and emerge stronger. [It will] quickly clear away old debts that are weighing them down. What we are asking is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognise that they cannot hold out for the prospect of endless government bailouts.” said Obama.

The auto parts suppliers and IT software exporters in India have already been affected by the declining auto sales. GM and Chrysler software contracts provide US$300 to 350 million a year to vendors in India. As well these two major automakers usually award US$1 billion contracts to auto parts suppliers. “We are worried and closely watching the developments in the US to gauge the impact. The decline in auto sales in the US has already hit the order books of Indian suppliers,” said a Delhi auto parts supplier.

“Going forward, the industry will undoubtedly be smaller, but if our efforts are successful it will be viable and it will support good jobs for Canadians,” said Clements.

Betty Sutton, Ohio’s Congresswoman put forward the CARS act which provides a US$3,000 to 5,000 incentive for those who trade in their vehicle for a fuel-efficient car. “It clearly stimulates the economy, and it gets the consumer into the showroom and gets them buying again. But importantly — and this is what I particularly like about it — it really helps the environment quite a bit in two respects.” said William Clay Ford Jr., executive chairman of Ford Motor Co.

Ford Motor Company has not come forward with requests for assistance.

Since December GM and Chrysler have received US$17.4 billion government loans.

Friday, January 9, 2009

Global chemical manufacturer LyondellBasell — the third-largest private chemical company in the world — has collapsed. The firm filed for Chapter 11 bankruptcy protection in the United States, as well as the Dutch equivalent. They had failed to meet a January 4 deadline on postponed debt payments, and talks with creditors failed.

Headquartered in The Netherlands, LyondellBasell is owned by private equity tycoon Len Blavatnik, who had already refused the company a loan to help deal with debt resulting from a $12.7 billion merger between Basell International Holdings and Lyondell Chemical to create LyondellBasell Industries.

The company had already appointed Kevin McShea from Alix Partners to restructure the firm. McShea was assigned speculatively prior to the bankruptcy filing. Access Industries, Blavatnik’s company, refused to extend credit as part of a loan deal brokered in March, a decision Lyondell Chemicals Company, a subsidiary of LyondellBasell, stated they were unhappy with.

LyondellBasell had postponed $280 million worth of interest payments, which Standard & Poor said placed it in “selective default” with a “rapidly weakening liquidity position”. S&P also said that LyondellBasell have debts of $26 billion in a report on the company prior to the firm’s collapse.

LyondellBasell responded with a press release, issuing the following statement: “Standard & Poor’s definition of ‘selected default’ related to our corporate credit rating should not be misinterpreted to suggest that LyondellBasell is currently in default of its bank agreements. As they stated in their press release, ‘This is a default in our opinion according to our definitions and criteria.’ LyondellBasell is not currently in default according to its agreements with its lenders.”

The company met with high oil prices shortly after the expensive merger. This was followed by a general tail-off in demand caused by the ongoing financial crisis. Investors were continuing to bet before the collapse that the firm would restructure under bankruptcy protection, leaving lenders with big losses, potentially over 90% of their investments. The cost of credit protection for LyondellBasell bonds had soared. The creditors include Merrill Lynch, Goldman Sachs, Citigroup, ABN Amro and UBS.

On Thursday, an interim allowance was made by a judge for LyondellBasell to seek up to $2.167 billion of loans. There is also an emergency loan paid out of $100 million. As well as LyondellBasell, 79 affiliates have become insolvent. Citigroup has said the collapse will set them back $1.4 billion in unpaid debts.

Tuesday, December 20, 2005

Delta Electricity, New South Wales’ second largest electricity producer has increased security at its four plants near Sydney following an extortion threat.

Delta Electricity operates coal-fired power plants at Wallerawang and Mount Piper (near Portland) in the state’s Central West with Mummorah and Vales Point both between Sydney and Newcastle.

Delta reportedly received the letter last week which is said to contain a threat to bomb one of the plants if a “multi-million” dollar payment was not received. Jim Henness, Chief Executive of Delta Electricity denies that the letter threatened to bomb company facilities or harm employees. He did concede that Delta has undertaken responses “for the protection of people and plant”.

New South Wales Police have set up Strike Force Wayside investigate the threat. Members of the strike force have been working with Delta to help identify the source of the extortion demand.

The mayor of Lithgow, Neville Castle said that residents were nervous. He said “Obviously there’s concern in the community”

“We’d look at it very dimly however to my mind it wouldn’t be concerned with terrorism activity because as far as I am aware, terrorists don’t forecast what they are goring to do in advance. It seems to be very sudden as to what they do.”

Lithgow is located close to Wallerawang and Mount Piper plants and a large number of residents are employed at the plants or in the local coal mines that supply them.

Monday, August 6, 2007

At least six miners are trapped approximately 1700 feet underground in a coal mine in Utah after portions of the shaft collapsed. The mine is owned by Utah American Energy and is close to the town of Huntington, Emery County, 160 km south of Salt Lake City.

Robert Murray, The CEO, President, Director and owner of Murray Energy and the owner of Utah American Energy, said during a press conference at 5:00 p.m. (eastern time), an “earthquake caused the collapse at about 3:00 a.m. (mountain time).”

The United States Geological Survey (USGS) recorded what is allegedly a magnitude 3.9 earthquake at 2:48 a.m. (mountain time) on Monday morning 21 km (13 miles) east, southeast of Mount Pleasant, Utah, but the director of the USGS seismology stations Walter Arabasz, says that no earthquake caused the collapse.

Murray states that at least “two mining machines will be brought in to clean out the debris” at the beginning of the collapse and that he will “spare no expense” in rescuing the men.

“We have four rescue teams working to free the trapped miners. We will try four ways to get to the miners which include drilling 1,700 feet from the top of the mountain. We will also drill a hole” in a neighboring mine shaft sealed in 2004 after it was finished being mined that is “about 100 feet from the miners.”

Wednesday, January 5, 2005

The International Monetary Fund (IMF) Managing Director Rodrigo Rato offered special relief funds for the countries victim of the tsunami disaster. The money is, however, in the form of a loan. The IMF has been present in the area on various occasions.

The IMF offered a one billion U.S. dollar loan. The money would be given as Emergency Natural Disaster Assistance facility, and would be repaid in full and with interests within 3¼ to 5 years.

The money could help the area tremendously, but since it is a loan as opposed to an outright donation, it may not be as helpful. The loan, some fear, may not lead to economic stability in the long run. Despite the possible long term effects, the governments of the tsunami torn nations may simply have no choice but to accept the offer.

Tuesday, July 22, 2014

On Sunday, in the deadliest day of fighting for the Israeli military in several years, thirteen Israeli soldiers were reported killed in the Gaza Strip. Over 500 deaths of Palestinians have been reported in the Gaza Strip in the now-fourteen days of Israel’s offensive against Hamas.

Over 67 deaths of Palestinians on Sunday, by one report well over 100 — both civilians and fighters combined — occurred in one area, the Gaza City suburb of Shujai’iya, following heavy fighting and shelling by Israeli forces.

Meanwhile, thirteen Israeli soldiers were killed Sunday, including two soldiers who were United States citizens. Furthermore, the armed wing of Hamas claimed in a statement, “We have captured a Zionist soldier and the occupation has not admitted that”, and displaying a identification card and a serial number. The IDF is investigating the claim. A anonymous senior Israeli military source told The Guardian in regards to Hamas fighters, “We have to admit we were facing good fighters, very well equipped with sophisticated weapons systems, accurate weapons, heavy weapons including mortars, booby traps.”

All this occurred while a United Nations Security Council meeting was held in New York City at the request of Jordan. Speaking to reporters after the meeting, Rwanda’s UN ambassador Eugene Gasana said, “The members of the Security Council expressed serious concern about the growing number of casualties. The members of the Security Council called for an immediate cessation of hostilities”. Gasana continued saying, “The members of the Security Council called for respect of international humanitarian law including protection of civilians[…] The members of the Security Council emphasized the need to improve the humanitarian situation, including through humanitarian pauses.”

United Nations Secretary-General Ban Ki-moon, who is in Doha, Qatar meeting with Qatar’s Emir Sheikh Tamim bin Hamad al-Thani and Palestinian President Mahmoud Abbas, said in a statement, “As I travel the region, I will continue to press for an [immediate] ceasefire — an immediate end to the Israeli military operation in Gaza and the rocket fire by Hamas and Islamic Jihad”. Ban criticized Israel for the civilian death toll saying, “While I was en route to Doha, dozens more civilians, including children, have been killed in Israeli military strikes in the Shejaiyah neighborhood in Gaza[…] I condemn this atrocious action. Israel must exercise maximum restraint and do far more to protect civilians.”

In response, Israeli Prime Minister Benjamin Netanyahu said in press conference, “We will continue this operation for as long as it takes.” Netanyahu also appeared on CNN saying Hamas uses civilians as human shields; “They use telegenically dead Palestinians for their cause. They want the more dead, the better”. He further added, “We try to target military targets and unfortunately there are civilian casualties which we regret and we don’t seek”.