Metals react to Obama tough line on US autos
Mar 30, 2009 | 11:52 AM
| Scott Robertson
The hard line the Obama administration has taken with the automotive industry is eliciting some strong reactions from the metals sector.
President Obama's issuing of what was described as an "ultimatum" to struggling automakers General Motors Corp. and Chrysler LLC—threatening to withhold additional bailout funding unless the industry gets its financial house in order—and the ousting of GM chairman and chief executive officer Rick Wagoner sent stock markets tumbling. It drew some sharp comments from metals companies, which in many cases are key suppliers to automotive customers.
In short, that reaction was: if bankruptcy protection was good enough for metals to recover from its slump a few years ago, it might be good enough for the companies that make the vehicles into which so much metal is sold.
"It looks like the government is going to prepackage a bankruptcy," Michael D. Siegal, chairman and chief executive officer of Olympic Steel Inc., Bedford Heights, Ohio, said Monday. It's too soon to tell what greater government intervention into GM and Chrysler will mean to steel suppliers, but Siegal said he hopes that unsecured creditors will be included in any warranties.....
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