Early Briefing: Local Dealerships Have Been Preparing
Washington area dealerships that sell General Motors and Chrysler vehicles have been trimming costs and reducing the number of cars on their lots for more than a year in expectation that the two American manufacturing icons might be forced into bankruptcy.
Dealerships said they have continued advertising to assure the public they will be in business.
"The bankruptcy would finally put an end to the speculation and let the healing begin for these two manufacturers so they can reorganize, shed excess costs, be more competitive with Japanese counterparts and start the road to recovery," said Abbas Khademi, a partner in the Ourisman Automotive Group, which owns 13 dealerships in the Washington region, including four Chevrolet and several Chrysler facilities. "In the short term, it would hurt sales because it would undermine consumer confidence."
For the second year in a row, Comstock Homebuilding disclosed that its auditor believes that the market and the company's debt create "substantial doubt" that it can operate through the year as a going concern. The company said in a regulatory filing that it expects "depressed demand" for housing into 2010.
"The challenges currently facing the home building industry and the economy are unprecedented," chief executive Christopher Clemente said. "The absolute lack of capital available to homebuilders is not only contributing to the downward spiral of the real estate market, it is costing this country hundreds of thousands of jobs and is causing an untold loss of wealth." He criticized the government's stimulus efforts as overlooking the home-building industry.
The company said it is taking steps to manage during the downturn, renegotiating loans and canceling or postponing projects. The company had 67 employees as of Dec. 31, down from 142 a year earlier. It bought no new land in 2008.
As of Dec. 31, it had $21.2 million of debt past due and $6 million in unrestricted cash.
The solar technology firm BP Solar said it will sharply curtail manufacturing operations around the world, a cost-saving move that will result in the loss of 140 jobs at an assembly plant in Frederick and 480 at two factories in Madrid.
Also yesterday, Osiris Therapeutics, a Columbia firm specializing in stem cell therapy, said it was eliminating 80 jobs as it completes the sale of one of its product lines to another company that will move manufacturing elsewhere. And American Woodmark announced that it would close a furniture plant in Berryville, Va., but officials would not say how many workers -- if any -- would be let go.
Dominion Virginia Power is seeking to raise electricity rates 6.9 percent during the next 14 months to pay for equipment, salaries, plant construction and conservation projects.
The request comes a year after the state's largest energy provider raised rates by 18percent to cover fuel costs, the largest one-time rate increase in three decades.
Virginians, already confronting the economic downturn, would face a phased-in increase between September and January.
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