Posted by: Andrew PiaNearly a year after the downfall of our economy, bankruptcies continue to become very prevalent. Auditing studies have shown that the industries with the highest risk of bankruptcy within the next 12 months are primarily the auto, airline, and media industries. In a study done by Audit Integrity, the companies with the highest risk of future bankruptcy include Rite Aid Corp at 10.5 %, Sirius XM Radio Inc. at 9 %, and American Airlines at 8 %.
General Motors has however served as a model for the avoidance of bankruptcy in the auto industry. While may auto makers are in danger of filing for Chapter 11, the mistakes made by GM have seemingly not helped fellow automakers deal with threatening situations. Mercedes and BMW are currently at a high risk of losing many of their valuable assets. Germany's premier automakers have been hit hardest by the economic slump due to declining sales of luxury cars and an increasing shift to more compact vehicles. Mercedes' management is currently under fire; mirroring similar managerial moves to that of General Motors.
http://www.reuters.com/article/industryNews/idUSTRE58F3EF20090916?pageNumber=2&virtualBrandChannel=0
http://www.businessweek.com/globalbiz/content/sep2009/gb20090916_851170.htm
http://atlanta.bizjournals.com/atlanta/stories/2009/09/14/daily58.html
This article seems to be very accurate in predicting which types of companies are most likely to file for bankruptcy in the current economy...typically when people are short on cash they tend not to buy new cars or fly places for vacation...i think many of the companies that provide more expensive "luxuries" are going to find themselves in tight financial situations until the economy can recover a bit and people start buying cars and flying again
ReplyDeletePosted by: Christina Dove
Good article. It will be weird to see if BMW and Mercedes get close to declaring bankruptcy as those have always been premier car companies here in the US.
ReplyDeletePosted by Kenny Hernandez