Major Corporations At Risk of Bankruptcy in 2024

Table of Contents

• Recent Bankruptcy Shows Risks Facing Big Companies
• Factors Putting Large Enterprises at Risk
• Sabre - This Travel Company Could Be Grounded
• Seagate Technology - Storm Clouds Gathering
• Century Aluminum - Dependent on Unpredictable Prices
• General Motors - Can This Automaker Survive?
• How Consumers Can Prepare If Brands Go Under
• The Bottom Line - Who Is Most Likely To Go Bankrupt

Recent Bankruptcy Shows Risks Facing Big Companies

The bankruptcy filing of SmileDirectClub in 2023 foreshadows the fate that could hit other major corporations in 2024. SmileDirectClub was once a rising star and competitive threat to Align Technology’s dominance of the teeth alignment industry. However, with financial troubles mounting and debts becoming unsustainable, the company resorted to Chapter 11 bankruptcy last year to restructure.

While one bankruptcy does not necessarily signal a trend, current economic conditions indicate more corporate collapses could be on the horizon. Key risk factors like high interest rates, inflation, recession risks, disruptive competition, and changing consumer preferences are creating strong headwinds. Industries from retail to travel, data storage, manufacturing, and more look vulnerable if their financial performance and profits do not improve in 2023.

Corporations With Highest Risk of Bankruptcy

Below are major public companies that appear most likely to file Chapter 7 or Chapter 11 bankruptcy in 2024 based on analysis of their financial statements, business forecast reports, and future economic projections:

Company	Industry	Market Cap	Key Issues
Sabre Corporation	Travel booking	$2.1 billion	High debt-to-EBITDA ratio, low return on assets, negative Altman Z-Score
Seagate Technology	Data storage	$14.9 billion	Large high interest debt, negative return on assets, low Altman Z-Score
Century Aluminum	Aluminum manufacturing	$897 million	Negative EBITDA, negative return on assets, negative Altman Z-Score, reliant on aluminum prices
General Motors	Automotive	$53.4 billion	Declining sales, loss of market share, high costs compared to competitors

This list indicates companies from diverse sectors could be in trouble, compounding the overall economic risks if multiple massive corporations declare bankruptcy or even shut down fully.

Factors Putting Large Enterprises at Risk

Various concerning macroeconomic trends and challenges plaguing industries spell danger for huge enterprises with mediocre financial standing. Key factors making major corporations prone to bankruptcy in 2024 include:

• Poor Economic Outlook: Persistent high inflation coupled with rising interest rates predictably lead to recession risks. This results in decreased spending power and faltering profits.
• Disruptive Competition: Nimble e-commerce players and tech disruptors are stealing market share from traditional incumbents in many sectors.
• Shifting Consumer Demand: Younger demographics increasingly desire eco-conscious brands tailored to their preferences unlike out-of-touch dinosaurs.
• Excess Leverage: Struggling firms in cyclical sectors uncomfortably increased corporate debt for temporary gains, worsening vulnerability.
• Global Instability: Geopolitical conflicts, energy price shocks, supply chain issues and trade wars create uncertainty hampering operations.

Established companies already under strain can easily spiral into critical status if negative economic or industry scenarios unfold. Their ability to service high debt obligations becomes severely impaired, risking bankruptcy without drastic measures. Vigilant monitoring of corporate performance metrics like declining return on assets and Altman Z-Scores can foreshadow bankruptcies before balance sheets catastrophically unravel.

Sabre - This Travel Company Could Be Grounded

Travel technology provider Sabre has disturbing financial red flags that aviation consultants predict could drive this $2.1 billion corporation into Chapter 11 bankruptcy if unresolved by 2024.

In particular, Sabre has an extremely high debt-to-EBITDA ratio exceeding 9x. This means they owe lenders nearly $9 for every $1 of their earnings before interest, taxes, depreciation and amortization (EBITDA) they generate annually. Such poor balance sheet leverage leaves almost no room for profitability declines before potential default.

Compounding matters, Sabre scored only 0.8% return on assets last year. This means for every $100 of assets they control, they squeezed out less than $1 in profit. Plus, their high debts cost big dollars in interest payments which get subtracted before calculating final earnings.

Finally, Sabre's Altman Z-Score has been negative the past two years. This composite measurement incorporates various financial ratios to predict likelihood of impending bankruptcy. Two straight years below zero confirms extreme distress meriting urgent measures.

Can Sabre turn performance around before 2024? Much depends on post-pandemic travel demand rebounding. If economic struggles persist limiting tourism and flights, Sabre has little room to correct course before crumbling. Weary consumers should hedge risks by not pre-paying substantial travel deposits with Sabre providers until confirmation conditions stabilize.

Seagate Technology - Storm Clouds Gathering

Data storage hardware giant Seagate Technology shows an unsettling financial situation that market analysts warn looks prone to bankruptcy potential by 2024 barring an unexpected rebound. This $14.9 billion company carries over $7 billion in debts on its strained balance sheet. Worse still, nearly $4 billion comes due by 2024 at uncomfortably high interest rates exceeding 4%.

With rising rates slashing technology spending, Seagate struggled to 3% year-over-year revenue declines and negative return on assets of -1.02% last quarter. This upside-down metric signals they are not efficiently using shareholder capital to drive profits. Troublingly, their Altman Z-Score has also been languishing below 1.2 which is the cutoff for bankruptcy likelihood within 2 years.

To avoid catastrophic collapse, Seagate requires immediate business model pivots, product innovation, and emergency debt restructuring to ease looming 2024 obligations. If negative economic or data storage sector trends accelerate, this storied 52-year-old corporation faces gloomy storms ahead. Consumers should closely monitor for delays or deterioration in Seagate’s customer service, warranties, or product deliveries that could indicate distress.

Century Aluminum - Dependent on Unpredictable Prices

Niche aluminum manufacturer Century Aluminum faces dire prospects trying to claw back from negative EBITDA and losses on assets as of late 2022. This risky situation leaves them no margin for error in 2023-2024 while carrying significant debts across international operations.

Most threatening to Century Aluminum’s survival is their complete dependency on volatile global aluminum prices. Unlike diversified metals companies, Century only produces primary aluminum which leaves no alternative revenue sources if prices weaken. 2022 delivered crushing setbacks as aluminum prices plunged over 30% after peaking. Century posted disastrous $530 million net losses for the year, wiping out precious capital reserves.

Now with demand outlook unclear given construction and manufacturing risks in key aluminum end-markets, analysts warn Century cannot endure another year like 2022. Their Altman Z-Score sunk to negative territory signaling existential dangers. If a recession transpires killing aluminum prices again, or supply-chain costs spike, or operations face further disruption, bankruptcy filings could swiftly follow.

Century leadership proposed $1.1 billion in business sales plus emergency debt exchanges to endure until 2024. But macro conditions remain highly unpredictable. Nervous business partners should seek backup suppliers and safeguard any advance payments should Century falter.

General Motors - Can This Automaker Survive?

Detroit giant General Motors alarms shareholders by continuing archaic strategies that fueled years of market share losses allowing foreign automakers to overtake leadership. Despite its $53 billion valuation, GM’s eroded dominance in critical US and Chinese car markets spurs questions whether bankruptcy risks could return sans major strategic overhauls.

Key Metric	GM Results	Industry Average
US Market Share	12%	17%
Operating Margin	5.8%	8.1%
Altman Z-Score	2.84	3.25

Particularly worrying is how rapidly upstart Tesla captures younger luxury vehicle shoppers, while Toyota and Honda thrive with 14-17% share on reputation for quality and efficiency. Compared to key competitors, GM’s margins lag by 200-300 basis points annually highlighting bloated cost structures resisting change. Slipping Altman Z-Scores also demonstrate GM’s financial cushions are eroding faster than auto peers.

Does GM’s long-term future look dire without prompt course correction? Eric Noble, President of automotive consultancy The CarLab, cautions "Relying on profits mainly from fuel-thirsty trucks and SUVs appears misaligned with where consumer priorities are heading." GM’s costly electric vehicle efforts fruitlessly attempt playing catch up. Meantime funds shrink to counter worsening sales of old-school offerings.

GM evaded collapse a decade ago thanks to a government bailout and bankruptcy reorg. But familiar red flags remerge. Once stylish brands like Cadillac and Buick fade for younger buyers. As Morgan Stanley deems its stock “Hard to invest in”, expect GM to desperately fight growing perceptions of sliding towards irrelevance.

How Consumers Can Prepare If Brands Go Under

With multiple corporate bankruptcies plausibly looming, vigilant consumers should recognize warning signs and make contingency plans accordingly to limit disruption from faltering brands. Protect yourself by taking measures such as:

• Build relationships with alternative product/service providers in vulnerable sectors
• Avoid prepaying substantial sums that could be hard to recover post-bankruptcy
• If loyalty member, redeem valuable points and rewards prior to any shutdowns
• Monitor for delays, declining service quality, or lack of innovation as red flags
• At first signs of brands struggling, secure backups to avoid desperation later

Hopefully corporations make necessary fixes to avert bankruptcy. But acting prudently based on financial indicators protects customers if companies spiral downward.

Shift your business early once deterioration becomes evident. Don't wait for formal bankruptcy declarations before exiting compromised ecosystems. Discover replacements delivering better value instead of clinging to former giants based on nostalgia.

The Bottom Line - Who Is Most Likely To Go Bankrupt

In conclusion, economic instability coupled with sector-specific disruptions threaten various major corporations with bankruptcy potential by 2024 if negative trajectories continue unabated. Travel technology provider Sabre, data storage stalwart Seagate, metals firm Century Aluminum, and automaker GM exhibit especially worrying metrics that consumer advocates cannot ignore.

While industry leaders certainly have options to correct course, their lack of progress on persistent profitability and market share woes does not inspire confidence. Market conditions remain challenging in 2023 with recession alarms blaring. All companies profiled here warrant close scrutiny of quarterly earnings and credible third party risk analyses. Act quickly securing backup plans if the brands you rely on display worsening performance. Don't get caught unprepared if or when these corporate names make depressing bankruptcy announcements.

With the object lesson of SmileDirectClub's 2023 collapse signaling how fast market leaders can unravel in turbulent times, consumers deserve protection from any upcoming bankruptcies that threaten access to vital products and services. Review the warning signs outlined for the vulnerable companies listed. Adjust affiliations appropriately as their status solidifies in 2023 on the way to a potentially painful 2024.