Recently, lenders of the Detroit-based automaker American Axle (AXL) have waived the financial covenants of the company through July 30 under the revolving credit facility. However, the company is still vulnerable to bankruptcy, as suggested by the fall in its stock prices. As at March 31, 2009, American Axle had a long term debt of $1.10 billion, a 27% increase over the year ago level. The company’s stockholder deficit rose to $452.5 million in the same period from $435.5 million at the end of fourth quarter of 2008. Previously, rumors spread had that American Axle would possibly go bankrupt in June. However, the company assured that it would remain viable despite the ailing conditions of the auto industry. The company expects to achieve this by significantly restructuring its business through production shutdown and retrenchment. This will cost the company $300 million in sales, leading to a ...

If history is our guide, then the rally we’ve seen in U.S. stocks in recent weeks is more than just a periodic run-up in share prices – it’s the initial stage of a prolonged bull market.

The 13-week rally the Dow Jones Industrial Average has experienced off its March lows is the most powerful surge that index has seen since the Great Depression. If we look to history, stocks should continue to rally over the next three months.

“I say this with the utmost confidence and my fingers tightly crossed: This is the start of a new bull run,” Hugh Johnson, chairman of Johnson Illington Advisors, told MarketWatch.com.

The 13-week stretch from March 9 through May 29, which saw the Dow soar 28.3%, has been bested only once – by the 40.8% run-up the Dow enjoyed in the 13 weeks that followed its hitting a bottom in May 1932. The

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Highlights include General Motors Corp. (GM), Daimler AG (DAI), American International Group, Inc. (AIG), Delphi Corp. (DPHIQ), Delta Air Lines Inc. (DAL) and Ford Motor Co. (F).The Administration has given both General Motors Corp. (GM) and Chrysler a very short leash to avoid bankruptcy. Chrysler has just 30 days to merge with Fiat, and GM 60 days to come up with yet more cuts and concessions from its stakeholders. GM CEO Rick Wagoner, who was opposed to the idea of going into Chapter 11, was pushed out and replaced with Fritz Henderson, who seems more open to the idea.I doubt the Chrysler merger will happen -- or that if it does happen, it will be successful. On paper, there does seem to be a good fit, but that was true of Chrysler and Mercedes as well, and just ...

Under the gun to return to profits, General Motors Corp. (GM) announced dramatic job cuts and dialed back pay to its white-collar workforce.

The largest U.S. automaker will cut its global salaried workforce from 73,000 to 63,000 by the end of 2009. GM will eliminate 3,400 of its 29,500 U.S. jobs by May 1, and its U.S. executives will see a pay cut of 10%. Many other salaried employees will take a temporary 3% to 7% pay cut.

“These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability,” GM said in a release on its Web site.

Nearly every day it seems, GM’s turnaround efforts have been making gigantic waves.

GM is talking with parts maker and supplier Delphi Corp. (DPHIQ) - which ...

President Obama’s new ruling that allows states to set higher emission standards than Washington could give false hope to investors looking to cash in on investments in hybrid and electric vehicles. New data points to a prolonged adoption of battery-powered, next-generation transportation as the recession and low gas prices continue to conspire against the feel-good alternatives.

Long-suffering readers know that we’ve taken a contrarian position against hybrid and electric cars as evidence continues to mount against their short-term returns for investors. The flip side of our coin, however, is that we don’t know when these investments will start to show profits for shareholders.

Two data points popped up on our computers in recent days, further substantiating our gloomy view of battery-powered vehicles. The latest sales data on hybrid sales proved grim, while an article in the Wall Street Journal provides anecdotal evidence that the market uptake contradicts the market hype for electric

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The once booming business of private equity faces an uncertain future. What’s not uncertain, however, is that many private equity deals are imploding from the weight of leveraged debt and greed. Inevitable bankruptcies will result in higher unemployment and a deeper recession.

Private equity is an asset class consisting of equity securities in operating companies that are not publicly traded.  The name “private equity”is the rechristened, kinder and more gentile label for what used to be known as leveraged buyouts, or LBOs. But make no mistake about it, while leverage may not be part of the name any more, it remains a big part of every private equity deal.

LBO firms, or “franchises”, as Henry Kravis, co-founder of Kohlberg Kravis Roberts & Co. (KKR), likes to call his shop, acquire publicly traded operating companies. Then they streamline management and operations to increase profitability and hope to cash out

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