Fitch Downgrades ChryCo to CCC, Outlook "Negative"
Fitch Ratings has access to information about Chrysler's finances that neither you nor I nor a whole bunch of really powerful people can access. Now that Chrysler's eliminated leasing, Fitch doesn't like what they see. They've downgraded Chrysler from B- to CCC, with a negative outlook. Not to get too technical, it's yet another indication that Chrysler has one foot in the grave. Or, if you prefer, MarketWatch reports that "The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values (particularly in SUVs and pickup trucks), higher default rates, higher loss severity being experienced and jittery capital markets." Cash burn? Oh yeah, cash burn. "Fitch expects that Chrysler could reach minimum required levels to finance ongoing operations in the second half of 2009. This could be accelerated in the event that suppliers or retail customers become concerned with Chrysler's financial condition and restrict trade credit or reduce retail purchases."
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Is the pic from Toonces, the car who could drive a car? If folks are interested in knowing what GM and Ford's credit rating are; GM is one grade from becoming CCC from Finch and Ford is two grades away. http://www.schwab.com/public/schwab/research_strategies/market_insight/todays_market/recent_commentary/stuck_in_reverse.html
The pic is of a 1957 Ford convertible sailing off a cliff in 1963's It's a Mad, Mad, Mad, Mad World.
It's a Mad Mad Mad World seems to describe the current automotive market in 2008
Wonder how bad off it was after the landing? Any pics out there? The Ford not Chrysler... I think Chrysler is screwed.