Brea, CA (11/6/2012) - American Suzuki Motor Corporation
(œASMC or œthe Company ), the sole distributor in the continental
United States of Suzuki Motor Corporation (œSMC ) automobiles,
motorcycles, all-terrain vehicles and marine outboard engines, announced
that it plans to realign its business to focus on the long-term growth of
its Motorcycles/ATV and Marine divisions. Following a thorough review of
its current position and future opportunities in the U.S. automotive
market, ASMC will wind down and discontinue new automobile sales in the
continental U.S. The Company has determined the best path to achieve this
realignment in an efficient and orderly manner is to restructure its
operations under chapter 11. The case will be filed in the United States
Bankruptcy Court, Central District of California in Santa Ana.
Consistent with ASMCs long history of standing by its products, owners
of Suzuki automobiles will be protected. All warranties will continue to be
fully honored and automobile parts and service will be provided to
consumers without interruption through ASMCs parts and service dealer
network.
ASMC remains firmly committed to Motorcycles/ATV and Marine products, and
these divisions are competitively positioned in their respective markets,
allowing for long-term growth as economic conditions improve. The
realignment is intended to better position ASMC for long-term success and
is a return to the Companys roots in the U.S. market, which began with
motorcycles and has grown to include ATV and marine products. ASMC remains
very proud of its high quality, high performance motorcycle, ATV and Marine
products. The Company will continue to bring ASMC products to market,
including its full lineup of sportbike, cruiser, touring, scooter,
dualsport, motocross, off-road motorcycles and KingQuad ATV line, as well
as its flagship DF300AP, state-of-the-art DF20A, and DF15A, among other
models. Additionally, ASMC is working to further build its market share
through continued investment in additional support for dealers through
marketing and advertising activities and sales
promotion. Suzuki will continue to have a strong presence as a sponsor of
teams in supercross, outdoor motocross and road racing.
In evaluating its position in the highly regulated and competitive U.S.
automotive industry, ASMC determined that its Automotive division was
facing a number of serious challenges. These challenges include low sales
volumes, a limited number of models in its line-up, unfavorable foreign
exchange rates, the high costs associated with growing and maintaining an
automotive distribution system in the continental U.S. and the
disproportionally high and increasing costs associated with stringent state
and federal regulatory requirements unique to the U.S. market. While the
decision to discontinue new automobile sales in the U.S. was difficult to
make, todays actions were inevitable under these circumstances. ASMC is
dedicated to honoring its commitments to Automotive customers through and
after the wind down of new automobile sales in the continental U.S.
An Orderly Process to Serve Consumers
ASMC intends to work within its current U.S. Automotive dealer network to
help structure a smooth transition from new automobile sales to exclusively
parts and service operations, or, in some instances, an orderly wind down
of dealership operations. ASMC intends to market and sell its remaining
U.S. automobile inventory through its Automotive dealer network. Through
and after the restructuring, all warranties will be fully honored and
automobile parts and services will be provided to consumers through the
dealer network. ASMC intends to honor any automobile buyback agreements
that are currently in place with financial institutions.
As part of its chapter 11 filings, ASMC will submit a proposed Plan of
Reorganization and Disclosure Statement that specifies how the Motorcycle,
ATV and Marine divisions will be maintained and enhanced, and how its
relationship with Automotive dealers will be largely transitioned to
support consumers and dealers through continued parts and service
operations. SMC or its nominee intends to purchase ASMCs Motorcycle, ATV
and Marine businesses, as well as the Automotive service operation
responsible for parts and warranties, through a new U.S. subsidiary that
will retain the ASMC brand name.
ASMC believes it has sufficient cash on hand to operate its businesses
during the restructuring. If necessary, ASMC will request permission from
the Court to borrow additional funds from SMC needed during the
restructuring.
Honoring Commitments
ASMC intends to operate its Motorcycles/ATV and Marine businesses as usual
and is dedicated to completing the realignment process as smoothly and
efficiently as possible. ASMC will continue to fully stand behind all of
its products and honor all warranties from these divisions. ASMC is working
with GE Capitals Retail Finance and Commercial Distribution Finance
businesses to continue providing motorcycles and ATV consumer financing
programs and motorcycle, ATV and marine dealer inventory financing
respectively. The Company expects existing agreements with other dealer and
consumer financing providers to continue as well.
ASMC has filed a series of first day motions requesting approval to
continue paying employee wages and benefits in the ordinary course,
offering dealer incentives and payments under customer warranties. ASMC
also expects to pay vendors in the normal course of business for goods and
services delivered on or after its November 5, 2012 filing. Payments for
goods received before ASMCs November 5, 2012 filing will be made in
accordance with the chapter 11 procedure
SMC, the 100 percent interest holder in ASMC, is not a debtor in the
chapter 11 filing.
ASMCs legal advisor on the restructuring is Pachulski Stang Ziehl &
Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins
Riley & Scarborough LLP is serving as special counsel on automobile dealer
and industry issues. Further, ASMC has proposed the appointment of M.
Freddie Reiss, Senior Managing Director at FTI Consulting, as Chief
Restructuring Officer, and has also added two independent Board members to
assist it through this period.
Additional information regarding ASMCs business realignment can be found
at the Companys website, www.suzuki.com, or via an information hotline
at 1-877-465-4819.
