HenryTo
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Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
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 Posted: Mon Oct 10, 2005 8:58 am Post subject: GM Seen With 30% Chance Of Bankruptcy Filing |
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Things are not looking so grand for GM this morning...
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GM Seen With 30% Chance Of Bankruptcy Filing
Ed Lin, 10.10.05, 10:32 AM ET
Banc of America Securities downgraded General Motors (nyse: GM - news - people ) to "sell" from "neutral" and slashed the price target to $18 from $32.
"We think GM's biggest supplier's [Delphi (nyse: DPH - news - people )] recent bankruptcy filing should raise GM's retirement liabilities by at least $6 per share," Banc of America said. "This, and our strong belief the UAW will be tougher on GM than Delphi, should get GM to more seriously consider bankruptcy protection."
The research firm raised the odds of a GM bankruptcy filing to 30% from 10% and added that it sees "more risks to our target then opportunities."
Banc of America said, "We disagree with the idea that the UAW let Delphi file because of GM's guarantee of its members healthcare benefits. The UAW knows this will just increase the healthcare benefit concession demands GM has made on the UAW."
In its coverage of autos, Banc of America's two least favorites are GM and Ford Motor (nyse: F - news - people ), which is rated at "neutral" with a price target of $10. The firm's top pick is Daimler-Chrysler (nyse: DCX - news - people ), rated at "neutral" with a price target of $50. |
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