Jump to content

BMW tapped $3.6 billion in U.S. Federal Reserve funds during crisis


NINETY EIGHT REGENCY

Recommended Posts

BMW tapped $3.6 billion in U.S. Federal Reserve funds during crisis

December 2, 2010 13:33 CET

BERLIN (Bloomberg) -- BMW AG secured funds from the U.S. Federal Reserve during the financial crisis to boost liquidity as other sources dried up.

BMW’s largest transaction under the Fed’s Commercial Paper Funding Facility was for $3.62 billion on Jan. 30, 2009, according to data released yesterday. BMW made “intermittent” use of the Fed program for refinancing at a time when other forms of credit were frozen, Mathias Schmidt, a spokesman for the Munich-based automaker, said today.

“We tapped into this program in 2008 and 2009 during the financial crisis like other companies,” said Schmidt. “It supported our financial profile and offered us an additional funding source, especially at times when the money markets and capital markets did not function properly and efficiently.”

The maker of BMW, Mini, and Rolls-Royce autos spent $750 million to expand its factory in South Carolina to assemble the X3 medium SUV. The plant, which also makes the X5 and X6 SUVs, exports vehicles to more than 120 countries, including Germany and China. Last year, the U.S. was BMW’s second-largest market after Germany, accounting for 19 percent of deliveries.

“The BMW Group weathered the economic and financial crisis very successfully,” and even generated positive free cash flow in 2009, “when most other auto companies suffered a lot,” said Schmidt. “The diversified and international treasury operations helped to deal with these challenges.”

BMW recorded an adjusted free cash flow of nearly 1.5 billion euros ($2 billion) last year, as net income declined to 204 million euros, its lowest profit in a decade.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101202/ANE/101209943/1246#ixzz16yKQWdgW

Link to comment
Share on other sites

Report: BMW, Harley-Davidson among those that tapped Federal Reserve for billions during crisis

by Jeff Glucker (RSS feed) on Dec 2nd 2010 at 6:01PM

The U.S. government's Commercial Paper Funding Facility was established towards the tail-end of 2008. The CPFF was created to offer companies short-terms loan when traditional means of establishing credit were crumbling. Lehman Brothers had collapsed and AIG was taking expensive trips while showing the world its pocket lint, but that didn't mean that other companies weren't in need of cash, and Washington stepped in to oblige. According to Bloomberg, among those parties taking advantage of the Federal Reserve program were a long list of automotive clients, German automaker BMW among them.

According to Bloomberg, German automaker secured funding assistance intermittently between 2008 and 2009, with the largest single transaction a reported $3.62 billion. This line of credit helped BMW survive during a time when other automakers were getting by on life support. Some of the funds were used to expand the South Carolina facility that produces X3, X5 and X6 models. While suffering its lowest profit in a decade, BMW was still able to produce a positive cash flow of nearly $2 billion.

Taking a look at the data provided by the Feds (download the spreadsheet here – *Warning: Excel spreadsheet), we see that a number of automakers and compnaies also made use of the CPFF, including Harley-Davidson (33 separate instances totaling $2.3 billion), Toyota, Ford, Chrysler, General Motors and Mitsubishi.

link:

http://www.autoblog.com/2010/12/02/report-bmw-harley-davidson-among-those-that-tapped-federal-res/

Link to comment
Share on other sites

BMW TAPPED U.S. FED FOR $3.6B DURING CREDIT CRUNCH

By Andrew Ganz

Domestic automakers weren’t the only ones to have benefited from the United States Federal Reserve over the last two years. According to new data released to the media yesterday, BMW made “intermittent” use of the Federal Reserve’s Commercial Paper Funding Facility in 2008 and 2009.

BMW used $3.62 billion on January 30, 2009, in part to expand its South Carolina assembly plant, as well as to support sales of new cars in the automaker’s second largest market. BMW invested $750 million into the assembly plant in order to assemble its X3 compact SUV, which just began production.

“We tapped into this program in 2008 and 2009 during the financial crisis like other companies,” BMW’s Matthias Schmidt told reporters in Munich. “It supported our financial profile and offered us an additional funding source, especially at times when the money markets and capital markets did not function properly and efficiently.”

BMW reported its lowest profit in a decade last year – around $270 million – but it recorded around $2 billion in free cash flow thanks to its ability to access low interest loans from the U.S. government.

“The diversified and international treasury operations helped to deal with these challenges,” Schmidt said.

link:

http://www.leftlanenews.com/bmw-tapped-into-u-s-fed-to-the-tune-of-3-6b-during-credit-crunch.html

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.



About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets

facebook

×
×
  • Create New...