Word: parentes
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While only the parent company sought protection under Chapter 11, no one expected the investment firm to rise from the ashes. In an industry that operates on trust and good faith, Drexel had exhausted its reserves. The move meant that Drexel, whose financial wizardry reshaped corporate America and ushered in an age of runaway debt and excess, will swiftly liquidate its business. The 152-year-old titan -- with 5,300 employees and $3.6 billion in assets -- will vanish almost overnight in the biggest failure in Wall Street history...
...their junk bonds -- conspired to send the prices of such securities plunging to 50% or less of their face value since last fall. Stuck with more than $1 billion in devaluing junk, Drexel's credit rating began sliding, and its banks cut off credit two weeks ago. The parent company, starved for cash, began to siphon money from the investment firm's coffers until Government regulators halted that maneuver. After a frantic search for a bank bailout or a merger partner, directors of Drexel Burnham Lambert Group agreed to put the company into bankruptcy proceedings...
...souped-up performance of GM's European branch offers a jarring contrast to the declining horsepower of the parent company in the U.S. While the European side has been earning a profit of $1,200 a car, the North American automaking operations are now losing money, analysts say. And while GM Europe boosted its market share from 8.4% in 1980 to 11% last year, the domestic company's portion of the U.S. car market fell from 46% to 35% during the same period. Why the sharp disparity in performance? A close look reveals that the two sides...
...domestic products are drawing mixed reviews, GM Europe's new cars and engines have garnered glowing write-ups in the auto-savoring European press. The manufacturer's success is owing in large part to the successful redesign of its market-leading subcompact, a car class in which the parent company has produced notable failures like the Chevrolet Chevette. The GM Europe subcompact, which goes by the names Opel Kadett and Vauxhall Astra, is now selling at the rate of 630,000 cars a year, making it the best-selling GM car in the world...
Because the parent corporation was stingy in investing in GM Europe, the company learned to make every cent count. "Basically these guys had to fight for everything they got," says Opel chairman Hughes. "But the fact is on the other side you've got this gigantic company with gigantic investments to retool all those products. It was too much. If there's a lesson here, it's that smaller is better. It's easier to control...