Chrysler LLC Receives Court Approval of 'First Day Motions'

/PRNewswire/ -- Chrysler LLC announced Friday that the U.S. Bankruptcy Court has granted the relief the company requested in a series of court filings known as "First-day motions." The orders issued by the court will help the company continue to operate its business during the reorganization proceedings.

Yesterday, Chrysler announced that, as a result of the comprehensive restructuring plan agreed to by many of its stakeholders, it had reached an agreement in principle to establish a global strategic alliance with Fiat SpA. Chrysler filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court to facilitate the restructuring and alliance.

First-day motions were filed to support Chrysler's employees, dealers, vendors and suppliers, together with its customers and other stakeholders. The Court granted approval for the company's request to continue payment of wages and health and welfare benefits to employees and contractors, and continue its customer warranty programs.

Bob Nardelli, Chrysler Chairman and CEO, said, "We accomplished a great deal today, including approval of certain First-day motions, which will enable us to transition into Chapter 11 and maintain normal operations as we move forward. Our focus now is on the next steps of this process, which we will pursue as efficiently and deliberately as possible."

The Chrysler Chapter 11 case was filed on April 30 in the U.S. Bankruptcy Court, Southern District of New York. The case number is 09-50002, with the Honorable Arthur J. Gonzalez presiding. More information about Chrysler's restructuring is available at www.ChryslerRestructuring.com.

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Chrysler LLC and Fiat Group Announce Global Strategic Alliance to Form a Vibrant New Company

/PRNewswire/ -- Chrysler LLC today announced that, as a result of the comprehensive restructuring plan agreed to by many of its stakeholders, it has reached an agreement in principle to establish a global strategic alliance with Fiat SpA to form a vibrant new company. It will allow Chrysler and Fiat to fully optimize their respective manufacturing footprints and the global supplier base, while providing each with access to additional markets. Fiat powertrains and components will also be produced at Chrysler manufacturing sites.

"This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages," said Bob Nardelli, Chairman and CEO of Chrysler. "It enables us to better serve our customers and dealers with a broader and more competitive line-up of environmentally friendly, fuel-efficient high-quality vehicles. Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution."

Chrysler initiated discussions with Fiat more than a year ago to develop plans for a global product alliance. Over the past several months, these discussions have evolved and expanded. Chrysler and many of its stakeholders worked tirelessly to agree upon concessions that will result in a significantly lower cost base and enable fulfillment of a broader strategic alliance.

"We want to personally assure everyone that the new company will produce and support quality vehicles under the Jeep(R), Dodge and Chrysler brands as well as parts under the Mopar(R) brand. Chrysler employees will become employees of the new company. Chrysler dealerships remain open for business serving our customers. All vehicle warranties will be honored without interruption and consumers can continue to purchase our vehicles with complete confidence," explained Nardelli.

Despite substantial progress on many fronts, Chrysler was not able to obtain the necessary concessions from all of its lenders, which would have avoided the need for a bankruptcy proceeding. As a result, under the direction of the U.S. Treasury, Chrysler LLC and 24 of its wholly owned U.S. subsidiaries today filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the Southern District of New York.

"Even though total agreement was not possible, I am truly grateful for all that has been sacrificed, on the part of many of Chrysler's stakeholders to reach an agreement in principle with Fiat," said Nardelli. "My number one priority has been to preserve Chrysler and the thousands of people who depend on its success. While I am excited about the creation of the global alliance, I am personally disappointed that today Chrysler has filed for Chapter 11. This was not my first choice. "

Chrysler also will file a motion under Section 363 of the Bankruptcy Code requesting the swift approval by the Court of the agreement with Fiat and the sale of Chrysler's principal assets to the new company. The benefit of this type of filing is speed. It should allow a leaner new company to emerge in a matter of 30 to 60 days, well positioned for long-term viability.

Nardelli, who has been leading Chrysler since August 2007, also announced to Chrysler LLC's Board of Management and the U.S. Treasury his plan to leave the company following the emergence of the new company from Chapter 11 and the completion of the alliance with Fiat. He will return to Cerberus Capital Management LP as an advisor. "Now is an appropriate time to let others take the lead in the transformation of Chrysler with Fiat," said Nardelli. "I will work closely with all of our stakeholders to see that this new company swiftly emerges with a successful closing of the alliance."

During the restructuring process, the government will provide sufficient debtor-in-possession (DIP) financing to allow continuation of "business as usual." The company will seamlessly honor warranty claims, pay suppliers and keep our dealer body operating to continue to serve our valued customers.

"To create this vibrant new company, we are using this structured bankruptcy to rapidly implement tough but necessary changes, including: the agreed upon wage and benefit structure for active and retired employees that is competitive with those of transplant manufacturers; a reduction of debt and interest expense; the disposition of idle assets; a rationalized and more efficient dealer network; and sound agreements with our suppliers," said Nardelli.

Chrysler's Mexican, Canadian and other international operations are not part of any bankruptcy filing.

As part of the restructuring and with the backing of the U.S. Treasury, we have reached an agreement in principle with GMAC to become the preferred lender for Chrysler dealer and consumer business. GMAC will be able to offer the best long-term finance options for Chrysler dealers and customers with standard rate installment products.

When the transaction is completed, the Voluntary Employee Beneficiary Association (VEBA) will own 55 percent of the new company and the U.S. and Canadian governments will own proportionate shares of a 10 percent stake. Fiat will initially hold a 20 percent ownership stake in Chrysler. Fiat will have the right to increase its ownership stake an additional 15 percent in three increments as it meets the following criteria: 5 percent for bringing a 40 mpg vehicle platform to Chrysler to be produced in the U.S.; 5 percent for providing a fuel-efficient engine family to be produced in the U.S. for use in Chrysler vehicles; and 5 percent for providing Chrysler access to its vast global distribution network to facilitate the export of Chrysler vehicles. Fiat cannot become a majority owner until after all U.S. government loans have been completely repaid.

As a part of the restructuring, most manufacturing operations will be temporarily idled effective Monday, May 4, 2009. Normal production schedules will resume when the transaction is completed, which is anticipated within 30 to 60 days.

"We want to recognize the Administration, the U.S. Treasury, President's Auto Task Force, as well as Members of Congress and representatives at the state and community level and Canadian Federal and Ontario Provincial governments for their energy and efforts in helping to move this new company forward," Nardelli said. "It is also important to acknowledge Cerberus and Daimler, which provided the foundation for the alliance as well as Chrysler's many other stakeholders including the UAW and CAW leadership, employees, dealers and suppliers. Without their deep sacrifices, unstinting loyalty and enduring belief in Chrysler, the alliance would not have been possible. We look forward to our new partnership with Fiat. To be sure, there will be many changes as we move forward to implement our plans. But today, from many great parts, we begin to build a vibrant new company with less debt, a stronger balance sheet, richer product portfolio, supported by a well-positioned finance company."

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Ford Completes Debt Restructuring Initiatives; Reduces Debt by $9.9 Billion and Lowers Annual Interest Expense by More Than $500 Million

- In total, Ford and Ford Credit will use $2.4 billion in cash plus 468 million shares of Ford common stock to reduce Ford's outstanding Automotive debt by $9.9 billion from $25.8 billion at Dec. 31, 2008. This will reduce Ford's annual cash interest expense by more than $500 million based on current interest rates

- This successful debt restructuring, together with previously announced agreements with the United Auto Workers, will substantially strengthen Ford's balance sheet

- Approximately $4.3 billion principal amount of Ford Motor Company's 4.25% Senior Convertible Notes due December 15, 2036 were validly tendered and accepted for purchase pursuant to Ford's conversion offer. Ford will use $344 million to pay a cash premium to convertible note holders who validly tendered

- Ford Motor Credit Company today separately announced the final results of its previously announced $1.3 billion cash tender offer for Ford's unsecured, non-convertible debt securities. Based on the tenders received, Ford Credit will use $1.1 billion in cash to purchase $3.4 billion principal amount of Ford's unsecured notes

- As previously announced, Ford Credit used $1 billion to purchase $2.2 billion principal amount of Ford's term loan debt at a price of 47 percent of par.

/PRNewswire / -- Ford Motor Company (NYSE:F) announced today the successful completion of debt restructuring initiatives that will reduce Ford's Automotive debt by $9.9 billion from $25.8 billion at December 31, 2008, and lower Ford's annual cash interest expense by more than $500 million based on current interest rates.

"By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise," said Ford President and CEO Alan Mulally. "As with our recent agreements with the UAW, Ford continues to lead the industry in taking the decisive actions necessary to weather the current downturn and deliver long-term profitable growth."

Previously Announced Debt Restructuring Initiatives

On March 4, 2009, Ford and Ford Credit announced the major components of a comprehensive debt restructuring: (1) a conversion offer in which Ford offered to pay a premium in cash to induce the holders of any and all of the $4.88 billion principal amount outstanding of its 4.25% Senior Convertible Notes due December 15, 2036 (the "Convertible Notes") to convert the Convertible Notes into shares of Ford's common stock (the "Conversion Offer"); (2) a $500 million cash tender offer by Ford Credit (the "Term Loan Offer") for Ford's senior secured term loan debt (the "Term Loan Debt"); and (3) a $1.3 billion cash tender offer (the "Notes Tender Offer") by Ford Credit for certain of Ford's unsecured, non-convertible debt securities (the "Notes").

Results of Conversion Offer

The Conversion Offer expired at 9:00 a.m., New York City time, on April 3, 2009 (the "Expiration Date"). As of the Expiration Date, approximately $4.3 billion principal amount of Convertible Notes were validly tendered and accepted for purchase, according to information provided by Computershare, Inc., the Exchange Agent with respect to the Conversion Offer. This will result in the issuance of an aggregate of approximately 468 million shares of Ford's common stock and the payment of an aggregate of $344 million in cash ($80 in cash per $1,000 principal amount of Convertible Notes converted), plus the applicable accrued and unpaid interest on such Convertible Notes, on the expected settlement date of April 8, 2009. Upon settlement of the Conversion Offer, approximately $579 million aggregate principal amount of Convertible Notes will remain outstanding.

Holders who validly tendered and did not withdraw their Convertible Notes by 9:00 a.m., New York City time, on the Expiration Date and whose Convertible Notes were accepted for purchase will receive, for each $1,000 principal amount of the Convertible Notes converted, 108.6957 shares of Ford's common stock plus $80 in cash and the applicable accrued and unpaid interest.

Previously Announced Results of Term Loan Offer

On March 23, 2009, Ford Credit announced that the Term Loan Offer, which expired at 5:00 p.m., New York City time, on March 19, 2009, had been over-subscribed. Based on the tenders received, Ford Credit increased the amount of cash used from $500 million to $1 billion to purchase $2.2 billion principal amount of Ford's Term Loan Debt at a price of 47 percent of par. This transaction settled on March 27, 2009, following which Ford Credit distributed the Term Loan Debt to its immediate parent, Ford Holdings LLC. The distribution of the Term Loan Debt is consistent with Ford Credit's previously announced plans to pay distributions to Ford of about $2 billion through 2010.

Approximately $4.6 billion aggregate principal amount of Term Loan Debt remains outstanding.

Results of Notes Tender Offer

Concurrent with this announcement, Ford Credit separately announced today by press release the results of its previously announced $1.3 billion cash tender offer for Ford's unsecured, non-convertible debt securities. As of the April 3, 2009 expiration date of the Notes Tender Offer, approximately $3.4 billion principal amount of Notes were validly tendered and accepted for purchase, according to information provided by Global Bondholder Services Corporation, the Depositary and Information Agent with respect to the Notes Tender Offer. This will result in an aggregate purchase price for the Notes of approximately $1.1 billion, to be paid by Ford Credit on the expected settlement date of April 8, 2009. Upon settlement of the Notes Tender Offer, such Notes will be transferred from Ford Credit to Ford in satisfaction of certain of Ford Credit's tax liabilities to Ford. After settlement of the Notes Tender Offer, approximately $5.5 billion aggregate principal amount of the Notes will remain outstanding.

In addition, as Ford previously announced, it has elected to defer future interest payments related to the 6.50% Cumulative Convertible Trust Preferred Securities of Ford Motor Company Capital Trust II (the "Trust Preferred Securities"), which will result in the deferral of $184 million in interest on the Trust Preferred Securities annually.

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The Home Depot Exits EXPO Business, Streamlines Support Functions and Reaffirms Previous Fiscal 2008 Sales and Earnings Guidance

/PRNewswire-FirstCall/ -- The Home Depot(R), the world's largest home improvement retailer, today announced it will exit its EXPO business. The Company is also taking steps to streamline its support functions. These decisions will impact 7,000 associates, or approximately two percent of the Company's total workforce. Finally, the Company today reaffirmed its previous guidance on earnings for the 2008 fiscal year, excluding the charge associated with the actions announced today and the store rationalization charge recognized earlier in the year.

EXPO

The EXPO business has not performed well financially and is not expected to anytime soon. Even during the recent housing boom, it was not a strong business. It has weakened significantly as the demand for big ticket design and decor projects has declined in the current economic environment. Continuing this business would divert focus and resources from the Company's core "orange box" stores. Therefore, over the next two months, the Company will be closing 34 EXPO Design Center stores, five YardBIRDS stores, two Design Center stores and a bath remodeling business known as HD Bath, with seven locations. These steps will impact approximately 5,000 associates in those locations, their support functions and their distribution centers.

"Exiting our EXPO business is a difficult decision, particularly given the hard work and dedication of our associates in that business and the support of our loyal customers," said Frank Blake, Chairman and CEO. "At the same time, it is a necessary decision that will strengthen our core Home Depot business."

Support Reductions

The Company also announced that it is restructuring support functions to better align the Company's cost structure with the current economic environment. This includes continuing its shift to a region- and district- based support model in various field functions and reducing headcount in administrative functions in the Company's store support centers. These support reductions will impact approximately 2,000 associates and will result in a 10% reduction in the Company's officer ranks. They will not impact any customer-facing positions in Home Depot stores.

The Company is also initiating a salary freeze among all officers. But, it will continue to offer merit increases to non-officer associates, as well as earned bonuses and the Company's existing 401k matching contribution for all associates, including officers. The Company will offer severance, earned bonuses and other benefits to all impacted associates.

"We're very fortunate that the soundness of our company lets us live our value of taking care of our people, even in this time of unprecedented economic hardship," Blake said. "These changes will make us a stronger company and will allow us to continue to grow associate employment over the long term to benefit our customers."

Charges Related to Restructuring

The Company anticipates taking a total pre-tax charge due to these actions of approximately $532 million, of which approximately $390 million will be recognized in the fourth quarter and the remaining $142 million will be recognized in 2009 and beyond. The charge consists primarily of fixed asset write-offs, lease reserves on closed stores, severance and store closing costs. The cash component related to severance and store closing costs is projected to be approximately $153 million over the next twelve months, and is expected to be offset by cash received for liquidated inventory.

These actions should benefit fiscal 2009 earnings before interest and tax by approximately $305 million. The benefit to earnings is primarily a result of payroll savings and operational improvements from the business exit.

HD Supply

The Company announced that it will take two charges in the fourth quarter related to its sale of HD Supply in 2007 and its ongoing equity interest in that business. First, it will record a charge of approximately $55 million, net of tax, to be reflected in discontinued operations primarily related to the working capital dispute related to the sale of the business. The cash component of the HD Supply charge is $22 million. Second, it will record a pre-tax charge of $163 million that will be reflected in other expense for a write-down of the Company's investment in HD Supply.

Updated 2008 Sales and EPS Guidance

The Company confirmed that it expects fiscal 2008 sales and earnings per share from continuing operations to decline by 8% and 24% respectively before the charge associated with today's announcement and the store rationalization charge recognized earlier in the year.

Fiscal 2009 Outlook

Looking forward, the Company anticipates continued weakness in sales related to the broader economic downturn, but will continue to invest in customer service in its core Home Depot stores, while optimizing its capital allocation. The Company plans to reduce capital expenditures to approximately $1 billion in fiscal 2009 and will open 12 stores. Fiscal 2009 sales and earnings per share guidance will be provided during the Company's fourth quarter earnings call on February 24, 2009.

The Home Depot will conduct a conference call today at 11 a.m. ET to discuss information included in this news release and related matters. The conference call will be available in its entirety through a webcast and replay at homedepot.com in the Investor Relations section.

Special Note to EXPO Customers

Throughout the process of closing its EXPO stores, The Home Depot is committed to meeting the needs of its customers. The Company will complete any construction projects that have been started. In cases where product has been ordered but the construction project hasn't been started, the Company will refund the price of installation and the design retainer. The customer can then arrange for their own installation. In cases where a design retainer has been paid but product has not yet been ordered, the customer will receive a full refund of the design retainer, as well as a 10% off coupon that can be used for a product and services discount at a local Home Depot store. All special orders will be completed. Any back orders will be refunded to the customer. Customers with questions should contact their local EXPO or one of the Company's call centers at 1-800-259-1042 or 1-800-797-1745.

Certain statements contained herein are forward-looking statements. Forward-looking statements may relate to, among other things, the demand for our products and services, net sales growth, comparable store sales, store openings and closures, state of the economy, state of the construction, housing and home improvement markets, reinvestment plans, net earnings performance, earnings per share, capital allocation and expenditures, liquidity, the effect of adopting certain accounting standards, and the effect of charges and impairments. Such forward-looking statements are based on currently available information and current assumptions, expectations and projections about future events. You are cautioned not to place undue reliance on our forward-looking statements. Such statements are subject to future events, risks and uncertainties - many of which are beyond our control or are currently unknown to us - as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include but are not limited to: economic conditions in North America and in other countries where we operate; changes in our cost structure; and conditions affecting customer transactions and average ticket, including, but not limited to, improving and streamlining operations. Material risks and uncertainties that could cause actual results to differ materially from our expectations and projections are described in our Annual Report on Form 10-K for our fiscal year ended February 3, 2008. Such risks and uncertainties include the considerable risks associated with the current economic environment and possible adverse effects on our results of operations and financial condition. Such risks and uncertainties are also described in the Form 10-Q for our fiscal quarter ended November 2, 2008. We note such factors that could cause actual results and outcomes to differ materially from those contained in any forward-looking statements as permitted by the Private Securities Litigation Reform Act of 1995. There also may be other factors that we cannot anticipate or that are not described herein because we do not perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update such statements other than as required by law.

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Circuit City Stores, Inc. Provides Update

/PRNewswire/ -- Circuit City Stores, Inc. today provided an update on developments in its United States Bankruptcy Court proceedings, its restructuring activities and its operations.

On January 5, 2009, the company filed a motion with the Bankruptcy Court that seeks approval of procedures that would formally put the company up for sale, as a going concern, as separate business units or as individual assets - including the sale of inventory.

Presently, the company is engaged in significant discussions, meetings and negotiations with two highly motivated and interested parties concerning the terms of a going concern transaction. These interested parties are considering providing additional financing to allow the company to sustain operations and move forward with a subsequent restructuring through a stand-alone plan and/or purchasing the company or all or substantially all of the company's assets. The parties have substantially completed due diligence and now are in negotiations with the company and the company's major stakeholders in order to finalize such a transaction. While the company is optimistic that a transaction can be successfully finalized, no assurance can be given that this will occur.

The motion was originally filed under seal and is being "unsealed," or made public, by the Bankruptcy Court today in order to conduct a hearing on the motion on Friday, January 9, 2009. The company was required to file the motion pursuant to an amendment to the company's debtor-in-possession (DIP) credit agreement, which was approved under seal by the Bankruptcy Court on December 23, 2008. The motion currently provides that an auction of the company and its assets would commence on January 13, 2009, and a sale hearing would occur on January 16, 2009.

The company's discussions with the interested parties could result in a sale agreement, or the company and the lenders could further amend the DIP credit agreement prior to the January 16, 2009, sale hearing. If no agreement is approved with a party interested in a going concern transaction by January 16, 2009, and the auction does not result in a sale of the company's assets, the motion provides that the company may enter into a transaction that will result in an asset liquidation process commencing soon after the sale hearing scheduled for January 16, 2009, absent any further amendment to the DIP credit agreement deadlines.

Restructuring and Operations Update

The company has continued to operate its business without interruption, and management is focused on developing and executing a comprehensive corporate restructuring plan. Initial successes toward restructuring the company's business and operations include the following:

-- As planned, in the months of November and December, the company
completed liquidation sales in and subsequently closed 155 domestic
stores that were underperforming or were no longer a strategic fit for
the company.
-- The company has achieved significant selling, general and
administrative expense reductions as it restructures it business to
align operations with its smaller national store base and has
implemented more stringent expense controls.
-- The company has retained DJM Realty Services, Inc. to negotiate
reduced rent for leased properties and to sell owned properties.
-- The company's sales trends improved significantly during the last two
weeks of December, and the combination of the improvement in sales and
focus on gross margin has enabled the company to continue to operate
well within the operating budget required by the amended DIP credit
agreement.

The case number for Circuit City's Chapter 11 filing in the United States Bankruptcy Court for the Eastern District of Virginia is 08-35653. Additional information on the filing can be found by visiting the company's investor information home page at http://investor.circuitcity.com/ and clicking on "Breaking News" and at the Claims Agent's Web site at www.kccllc.net/circuitcity.

Forward-Looking Statements

Statements made in this release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements regarding the company's expectations concerning the bankruptcy process and the company's restructuring activities and operations. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the following: (1) the impact of today's announcement on the company's restructuring activities and operations; (2) the ability of the company to continue as a going concern; (3) the ability of the company to negotiate successfully with one or more interested parties for a sale of all or substantially all of the company's assets; (4) the nature and amounts of the bids in any auction for the sale of all or substantially all of the company's assets; (5) the ability of the company to obtain approval of any necessary modifications to the DIP credit facility and operate pursuant to the terms of that facility; (6) the ability of the company to obtain Court approval of motions pursued by it from time to time in the Chapter 11 proceeding, including motions to extend deadlines currently in place in the bankruptcy proceeding; (7) the ability of the company to develop, pursue, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 proceeding; (8) risks associated with third parties seeking and obtaining Court approval to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the proceeding to a Chapter 7 proceeding; (9) the ability of the company to obtain and maintain normal terms with vendors and service providers; (10) the ability of the company to maintain contracts that are critical to its operations; (11) potential adverse developments with respect to the company's liquidity or results of operations; (12) the ability of the company to fund and execute its business plan; (13) the ability of the company to attract and retain customers; and (14) any further deterioration in the macroeconomic environment or consumer confidence. Discussion of additional factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is set forth under Management's Discussion and Analysis of Results of Operations and Financial Condition in the Circuit City Stores, Inc. annual report on Form 10-K for the fiscal year ended February 29, 2008, the quarterly report on Form 10-Q for the fiscal quarter ended August 31, 2008, and in the company's other SEC filings. A copy of the annual report is available on the company's investor information Web site at http://investor.circuitcity.com/.

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Detroit Bailout: Many Questions Remain, Says Finance Expert

As the Big Three automakers defend their restructuring plans before Congress this week, finance professor Ray Hill of Emory's Goizueta Business School points out that many Americans remain skeptical that a Detroit bailout is anything more than rewarding a failed status quo.

The automakers are promising that with federal loan help, "they will have gotten out of their health care obligations to retirees, and that they will be able to realize compensation costs savings from new hires," says Hill. "But if you look at their data, it's not clear that, three years from now, they still won't be paying their workers more than the international auto companies operating in the U.S."

"The first question is a question of equity: Why are taxpayers being asked to fund the Big Three autoworkers and not other autoworkers in the U.S.?" asks Hill.

The Big Three project that with government help, "in four or five years they could make cars more or less competitively with other companies that make cars in the United States," says Hill. "The question is why should taxpayers finance four or five years of inefficiency, higher wages and benefits for one segment of the population? Carmakers can project future viability on paper, but is anyone going to want to buy those cars four or five years from now?"

Hill questions the efficacy of GM's proposal to eliminate some lines of business. "When they eliminated Oldsmobile, because of state franchise laws, they had huge financial obligations to franchisees when they tried to exit that line of production. Are we actually going to be putting up money to pay car dealers so that the Big Three can meet their obligations under an antiquated system of selling cars?"

Hill also is critical of the two-fleet system, in which American automakers are not allowed to import into the United States the more fuel-efficient cars they make overseas to help meet current U.S. fuel economy standards. "Are we going to continue to have a two-fleet rule, which makes U.S. auto companies unable to make their fuel economy standards, but does help preserve UAW jobs?"

Hill, who is assistant professor in the practice of finance, is a former investment banker who teaches managerial economics and finance.

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