American Axle & Manufacturing Holdings Inc's
Should (the company) fail to be in compliance with these covenants and we are unable to obtain a waiver or amend these covenants, we may be unable to continue as a going concern.
A $30 stock in mid-2007, American Axle's share price has languished below $1 through the month of March, falling as low as 26 cents on Monday.
Last week, the company was warned by the NYSE that it might be delisted, a factor it also cited as putting pressure on its ability to stay afloat.
GM and Chrysler received a $17.4 billion government bailout in December and have asked for nearly $22 billion more. The government has until March 31 to determine if the automakers can become commercially viable, and if they should get additional public funds.
U.S. auto suppliers submitted a request in February to the U.S. Treasury to secure emergency funding to avoid a wave of bankruptcies and a deeper crisis in the auto industry.
The request, which was submitted by two industry groups, outlined three proposals for financial relief for parts suppliers to the U.S. government.
The proposals ask the government to guarantee U.S. automakers' payments to parts suppliers, accelerate payment terms or guarantee commercial loans to companies that make auto parts.
At that time, projections from parts suppliers showed payments to the companies are on track to drop to just $2 billion to $3 billion in March because of the near total shutdown in auto production at the start of the year, according to MEMA data. Suppliers had been receiving between $8 billion and $9 billion per month.
In the fourth quarter, American Axle reported a staggering net loss of $112.1 million, blaming the weakness of the major automakers.
It suspended its quarterly cash dividend and said it would continue to trim hourly and salaried labor costs, after cutting 3,000 jobs last year.
(Reporting by Christopher Kaufman; Editing by Derek Caney)