Asian trade: Asian markets and U.S. futures declined tonight as the automakers are again under close examination. Markets currently speculate that the Obama administration asked GM’s CEO, Rick Wagoner to step down.
This comes after GM reached the deadline to come up with a viable resuscitation plan, which would help the company avoid bankruptcy. Officials had hopped that GM would have been able to reach an agreement with both its bondholders and the unions before the final date of March 31, but it seems this is not the case for now. Earlier this year, GM received $13.4 billion to survive, while now the company is looking for $16.6 billion in bailout funds.
In the mean time, the same unconfirmed rumors say that Chrysler’s CEO, Bob Nardelli will retain his job. Chrysler had already received $4 billion, and now it is asking for another $5 billion to help finalize a strategic alliance with the European carmaker Fiat. According to the Associated Press, the current administration will allow 60 days for GM to restructure, while Chrysler will have 30 days for its Fiat deal. Additionally, bankruptcy still looks possible, as the two car companies have been losing money for years, and the current economic climate does not look to improve any time soon.
The news surrounding the U.S. car manufacturers dragged the Asian markets lower for the first time in the last five days. The commodity market also had a negative influence tonight. Crude and other important raw materials dropped, as it looks like the economy is still a long way from a possible recovery.
Tonight, the Nikkei fell 61.65 points (0.71%) to 8,565.32. The Australian S&P/Asx shed 50.00 points (1.36%) to 3,622.30.
Crude oil retraced some parts of the recent gains. Crude oil for April delivery declined $0.70 to $51.70
Gold rose, helped by the negative equity markets. Bullion for immediate delivery gained $2.60 to $927.90.