The Bankruptcy Shadow Looms Over Porsche
Porsche Headquarters, originally uploaded by getaroundbetter
Oh, how the mighty have fallen
We sometimes forget that even the coup de grace of auto manufacturers are suffering right now. Just because an automobile is being sold for scarcely under $50,000, does not necessarily mean they are making bank.
Der Spiegel magazine reported recently that the bankruptcy shadow is now looming over Porsche. At the moment it is believed that they are approximately $12 billion in debt, with no sign of improvement any time soon. Part of the reason they are in the position they are is their determination to take over the majority stake of Volkswagen.
Fittingly, it was Volkswagen (VW) who stepped-in to save the faltering Porsche with a $978 million cash infusion. The nearly one billion is unfortunately just a strip of duck tape holding the German sport car maker together, as it is estimated they still need another $3.5 billion just to maintain minimum operations for the next several weeks.
Following suit with the American and Japanese manufacturers, Porsche has reportedly asked for a $140 million in emergency funds from the German government to keep their operations afloat. Considering the economy, and the fact the loan will only cover a small portion of their looming financial troubles, the German government has so far expressed reluctance to move forward with any relief.
Or… might there be another reason for their reluctance???
While it is true that Porsche may be in some trouble, saying they are close to bankruptcy is like telling people they are drowning in a 2-foot deep kiddie wading pool. Ahem, just stand up Porsche and save yourself, which loosely translates to selling some of your VW stock. That should more than cover your operations for awhile.
Of course, Porsche does not want to lose any of the grip they have worked so hard to achieve with VW. So, instead they are going to flail themselves amongst the shallow waters like a three-year-old in a temper tantrum, hoping the German government will take pity and buy them that new pony! Good luck…
Source: Left Lane News
