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Thursday, April 9, 2009

Gehl Going Bankrupt? Manitou Walking Away?

Uh oh:

Shares in Manitou (MANP.PA) fall as much as 11 percent after the French maker of forklifts posts a drop in 2008 net profit and says its U.S. Gehl unit could file for Chapter 11 bankruptcy protection.

"Depreciation relating to Gehl reduces 2008 net profit to 4 million euros whereas the market was expecting 45-50 million and the lack of an agreement with banks relating to Gehl is weighing on the stock," Portzamparc analyst Aurelien Ripoche says.

Manitou can pursue further talks with its banks over Gehl or let it file for Chapter 11, Ripoche says, adding: "The best is to find an amicable solution."

Shares in the company are 3.1 percent lower at 4.70 euros by 0953 GMT ["Manitou Falls on U.S. Gehl Unit," Reuters Stock News Europe, 2009.04.01].

Manitou, which appears to have acquired Gehl at the worst possible time just last year, appears to be looking for a way out. This USAgNet report says Manitou might be acting like a homeowner whose mortgage is upside down and walking away from payments on an investment that's no longer worth the effort.

Can't blame the LAIC for that one... but if Manitou isn't just blowing smoke for some hardball negotiation strategy, we may have some serious economic redevelopment to do. Anyone care to buy Gehl back? Given that Manitou spent $331M on stock to gain control, even with stock values down, I think we're going to need a bigger kitty than Forward Madison has to pull that deal off. Ideas, anyone?


  1. We are too dependent on two things in our town: DSU & Gehl. DSU appears stable, but with a Sioux Falls university our enrollments may decline. We need better employment or that 4 lane so people can commute elsewhere to work.

  2. Take your future into your own hands. Don't follow the "example" provided by Huron which did little or nothing when three packing plants closed in rapid succession. If necessary, and for a short term, Madison may find it advantageous to become a market participant. (Many towns do this with municipal utilities, liquor stores, etc.) Perhaps the Gehl facility can be scooped up at a discount, or out of bankruptcy. Put together a plan - with branches and sequels; but don't wait for the world to bail you out, as it may not.

  3. Profits might be down (way lower than expected), but the company still made a profit. And -- correct me if I'm off base here, but chapter 11 doesn't mean the company goes away, they just want to wipe away bad debt and start over. -- ES

  4. Wouldn't the Gehl Company revert back to the original Gehl family/owners if Manitou defaults? Perhaps it will allow a steep price reduction for the buyer and Manitou can write down the loss. Gehl may come out even stronger than before and when the market turns and orders start coming in, it will put our folks back to work quickly.

  5. I almost bought some Manitou stock when it was down 90% last month but that kind of loss does not instill confidence. Bankruptcy is failure. Yes, they want to continue on, but this is usually the start of more painful cuts and breaking of contracts. Hard to see any silver lining.

  6. Don't give up on Gehl. They didn't stick around 150 years for nothing. They went through how many wars and the depression. This company is a fighter and I know for a fact they will do all they can to continue manufacturing their product.
    their commentment is to us the customer.

  7. Bankruptcy is a failure???? Donald Trump filed and look where he is at today!

  8. The Leader article made it pretty clear Manitou may not support Gehl: "the Group will envisage (dictionary says contemplate) providing support to Gehl to overcome the current crisis only if conditions in terms of risk mitigation and visibility are satisfactory, ..." This is a critical thing for Madison.


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