Welcome to CAR’s news aggregator as we round up the seismic change in the auto industry. Top tip: news summaries are added from the top hour-by-hour
Friday 29 May 2009
• Prodrive confirms it has entered the 2010 Formula 1 world championship – likely to race under the Prodrive team name next year and Aston Martin from 2012 (BBC News)
• Emergency talks in Brussels and Berlin to finalise the deal to rescue Opel and Vauxhall have stalled. Fiat has skipped today’s meetings in Berlin – blaming GM’s refusal to open up Opel’s books sufficiently (Automotive News Europe, subscription required)
• Britain’s car scrappage scheme has boosted the UK car market by 35,000 sales, it emerged today
• We’re in the final 72 hours before GM must finalise its intentions. It now seems almost certain that the American car giant will file for bankruptcy protection
• The US government plans to inject an extra $30 billion into the GM deal – on top of the $19.4bn already pledged. The extra cash will go towards sweetening the deal for bondholders, who had rejected an earlier debt-for-equity offer (Automotive News, subscription required)
• The GM board will meet today to give the go-ahead for its planned move into Chapter 11 bankruptcy. The 11th deal to bondholders gives holders of $27bn of unsecured bonds a quarter of the restructured company (Financial Times)
• High-level talks will resume today in Brussels and Berlin to thrash out a rescue package for GM Europe’s car making business
• Leading bidder components firm Magna says it could collaborate with rival bidder Fiat. Chief exec Don Walker says he would work with his Italian rivals if it would create a ‘win-win’ scenario (Automotive News Europe, subscription required)
Thursday 28 May 2009
• Components supplier Visteon Corp is seeking Chapter 11 bankruptcy protection. It’s failed to turn a profit since being spun off from Ford in 2000 (Automotive News, subscription required)
• Talks in Berlin to finalise the preferred bidder for Opel/Vauxhall end without agreement overnight
• Two bidders still in the running: Canadian parts maker Magna and Fiat
• Buy-out firm RHJ International’s bid is dismissed
• GM surprised the top-level talks led by the German government by demanding an extra €300 million in funding (Financial Times)
• Peer Steinbruck, the German finance minister, said this morning: ‘We were unpleasantly surprised when this new demand came out of the blue. We found that pretty scandalous’ (The Times)
• Berlin blames GM and the US Treasury for the failure of talks and warns the company will be insolvent by Friday unless agreement is reached (Financial Times)
• Amid uncertainty over the future for Vauxhall, UK business secretary Lord Mandelson tells the Guardian both bidders have assured him that UK production ‘would continue indefinitely’ (The Guardian)
• Toyota prices its new Prius at the same level as the outgoing car. Entry-level car priced from £18,370, on sale in August 2009 (Toyota)
• Nissan strikes a deal with rental firm Europcar to let it hire electric cars from 2010 (Nissan)
• One we missed earlier in the week: Ssangyong has been granted permission by the courts to restructure. Auditors claim the company has more value as an ongoing concern than being liquidated, so a new revival plan is underway for a mid-September relaunch (Ssangyong)
Wednesday 27 May 2009
• General Motors has failed to persuade enough bondholders to accept a debt-for-equity swap – meaning bankruptcy is almost certain within days (Automotive News, subscription required)
• GM has to win over around 90% of bondholders, who must agree to forgo billions of debt for a 10% stake in the new GM; it is also in deep talks with the UAW union over $20 billion owed to the VEBA retiree healthcare fund (Automotive News, subscription required)
• The British Government has intervened with the German political talks to push for financial support of GM’s UK activities. Vauxhall runs a van factory in Luton and the Astra facility in Ellesmere Port. Business secretary Lord Mandelson said he had held ‘substantial telephone conversations’ with GM chief exec Fritz Henderson and had ‘made clear the UK government’s commitment to all of Vauxhall’s plants’ (Financial Times)
Tuesday 26 May 2009
• VW-owned football club Wolfsburg has won the Bundesliga title for the first time at the weekend, beating Werder 5-1. The celebrations were immense – a motorcade of Lambos, Bentleys and other group products took the players to the town square, and The Guardian reports VW spent around €1 million on festivities (The Guardian)
• It’s the crunch week for GM in what could be its last week outside bankruptcy. Union officials will hear on Tuesday how many more US jobs will go – the 54,000 GM factory workers are on tenterhooks (Automotive News, subscription required)
• German chancellor Angela Merkel indicates that its preferred buyer of Opel/Vauxhall will be named by the middle of this week (Automotive News, subscription required)
• Fiat has improved its bid for Opel/Vauxhall, according to Germany’s economy minister Karl-Theodor zu Guttenberg. Fiat says it will cut fewer than 10,000 jobs if its bid is successful (BBC News)
• Porsche confirmed yesterday that it will receive a €700 million loan from VW as it struggles to cope with its €9 billion debt mountain (Automotive News, subscription required)
• Honda workers at the UK’s Swindon plant have voted for a 3% pay cut in an attempt to safeguard 490 jobs (BBC News)
Monday 25 May 2009
• Bank holiday in the UK. Afraid we’re all busy slurping ice creams in the unseasonably warm (for Britain) early summer weather!
Friday 22 May 2009
• Beijing Auto has emerged as a bidder for Opel and Vauxhall. It has sent a letter of interest to Dresdner Kleinwort, which is advising GM on the sale of its European operation (Financial Times)
• Ford has criticised Germany’s government-backed €1.5 billion bridging loan to Opel – claiming it tilts the European market in favour of its stricken US competitor (Financial Times)
• The Obama administration is preparing to steer GM into bankruptcy next week, according to a report in the Washington Post (Automotive News, subscription required)
• UK car production has crashed again – down 55% in April 2009 on the same month last year, new figures out today confirm. The SMMT said just 65,258 cars were built last month (BBC News)
• UK business secretary Peter Mandelson warns that whoever takes over Opel-Vauxhall, there will be ‘painful change’. It’s seen as a direct warning that UK jobs are at risk. ‘Whoever comes out as the successful bidder will cut costs and consolidate’ (BBC News)
Thursday 21 May 2009
• Opel has secured €1.5 billion in bridging loans to keep it afloat while talks continue over its sale. As reported yesterday, parent GM has confirmed a shortlist of three bidders for its European arm: Fiat, Magna and RHJ International (Financial Times)
• A GM official said the sale of Opel/Vauxhall could take a long time – even when it has signed a memorandum of understanding with one or two of the shortlisted businesses. ‘Once you get the MOU in place, the due diligence for deals like this could take weeks or months,’ he said. ‘This is why we sought bridge financing – so we could adequately negotiate a deal rather than having to rush a deal forward.’
• Oil prices have risen to their highest for six months, breaking through $62 a barrel. US supply has dropped for the second week in a row (BBC News)
Wednesday 20 May 2009
• Rolls-Royce announces this evening plans to grow its manufacturing workforce by 50%. It will take on 150 staff to help build the new smaller Rolls, the Ghost (Rolls-Royce)
• Tata discloses it has raised $840 million in a new debenture scheme to help offset the $3 billion bridging loan it used to buy Jaguar Land Rover. It’s among the largest debenture schemes used by an Indian business (Tata)
• GM says it has narrowed down potential owners of its European business to three serious bidders. The FT reveals they are Fiat, Canadian parts maker Magna and Brussels-based RHJ International. GM wants around €650 million for Opel and Vauxhall (Financial Times)
• Former Chrysler president Tom LaSorda is advising Penske Automotive Group on buying GM’s Saturn brand (Automotive News, subscription required)
Tuesday 19 May 2009
• Daimler buys a 10% stake in US electric car maker Tesla. The German giant is already heavily involved in electric car projects, including its own battery-powered Smart. No price was put on the shareholding in privately owned Tesla (Financial Times)
• Saab admitted in court today it had narrowed down its potential suitors to three possible new owners (Automotive News, subscription required)
• Ford and Honda, the two biggest car makers embroiled in yesterday’s clash over the tax liabilities of the UK’s scrappage scheme, have settled their differences with government and joined the scheme. Cars that are more than 10 years old can now be scrapped in return for a £2000 discount on a new model (BBC News)
• Volkswagen has outmanoeuvred Porsche in the long-running battle for control over Europe’s biggest car maker – proof that cash-rich VW has more power than debt-laden Porsche (Financial Times)
Monday 18 May 2009
• Reuters reports this morning that Volkswagen has halted merger talks with Porsche, claiming its major shareholder lacks a strategy for a closer alliance. A VW spokesman says: ‘We recognised at the end of the week that Porsche is lacking several fundamental conditions for the discussions’ (Automotive News, subscription required)
• The UK’s car scrappage scheme goes live today, offering £2000 discounts to owners of cars older than 10 year old trading up to a new model (BBC News)
• Full details of Government scrappage incentives are published by our sister price guide Parker’s (Parker’s)
• Ford has suspended its involvement in the scrappage scheme over tax anomalies, claiming the VAT system has not been clarified prior to launch (BBC News)
• Honda chairman Takeo Fukui predicts the worst of the global recession is over. ‘The last quarter was the nadir, and things will gradually start to improve,’ he said. ‘I’m definitely expecting the second half to turn up, and on an annual basis I think this year will be the floor’ (Automotive News, subscription required)
Friday 15 May 2009
• Chrysler plans to close a quarter of all its US dealerships, new court paperwork reveals. It will axe 789 of its 3200 showrooms – not surprisingly as half of its outlets account for 90% of American sales (BBC News)
• Incoming Toyota president Akio Toyoda plans to shake up his family’s business with a return to traditional values. He is the first member of the founding family to run the company in 14 years – but the dynasty has only limited ownership, holding just a 2% shareholding (Financial Times)
Thursday 14 May 2009
• Numerous bidders are lining up for GM’s European division, the FT reports. Fiat is jostling with car parts and contract manufacturer Magna, Beglian components specialist RHJ and up to five other suitors. Formal bids are expected in the next two weeks (Financial Times)
• GM chief exec Fritz Henderson spells out urgency of a deal for Opel/Vauxhall: ‘We are speaking with multiple bidders with the objective of at least having some understanding of what an agreement might look like by certainly no later than the end of the month. Our target would be slightly before that’ (The Guardian)
• GM, which plans to cut 40% of its dealer network, will send warning letters to 1000 dealers this week (Automotive News, subscription required)
Wednesday 13 May 2009
• The UAW union has agreed not to strike at Chrysler until September 2015 under the terms of the new deal. It will accept a 55% stake in the proposed Fiat-Chrysler new business in lieu of the $10.6 billion Chrysler owes a union retiree healthcare fund (Automotive News, subscription required)
• After bankruptcy court, Chrysler must survive on American and Canadian loans pegged at $6bn until vehicles produced with Fiat know-how arrive in 2011 (Detroit News)
• Renault joins Ferrari’s threat to pull out of F1 unless the proposed £40 million budet cap in 2010 is dropped (BBC News)
• Ford shares tumble by 18% as the manufacturer announces plans to issue 300 million common shares to fund healthcare costs for retired workers. The new shares will be sold at $4.75 each and will raise $1.4 billion – but the news pushed down the share price to $5.01. It’s the first public share offering since Ford became a publicly traded company in 1956 (BBC News)
• Volkswagen chairman Ferdinand Piech signals that VW will be in the driving seat of the proposed merger with Porsche. Why? The new company will be headquartered in Wolfsburg, where VW is based. He also reveals the company could be named Auto Union (Financial Times)
• Chrysler’s bankruptcy could take two years – not the two months proposed by president Obama, a Bloomberg report claims (Automotive News, subscription required)
• GM shares plunge to a 76-year low after a group of executives including former product boss Bob Lutz disclose they have sold shares totalling $315,000 in the teetering car maker (Automotive News, subscription required)
Tuesday 12 May 2009
• Nissan today reports a £1.6 billion loss for the year to 31 March – but it was marginally less than the forecast loss of £1.7bn. Nissan sales fell 9.5% to 3.4 million vehicles and the biggest fall was in the US. Nissan, which is 44% owned by Renault, expects to lose a further £1.1bn in this financial year, with sales dipping to an anticipated 3.1m (BBC News)
• ‘The global recession and financial crisis continue, but we are beginning to see some signs of improved access to credit, the impact of government stimulus packages and a gradual return in consumer confidence,’ said Nissan CEO Carlos Ghosn. ‘2009 will be another challenging year. Our priorities will be preserving cash, improving our profitability and pursuing deeper synergies within the Renault-Nissan alliance’
• Fellow Japanese car maker Mazda also announced an annual loss of 52.1 billion yen, as sales collapsed by 27% (BBC News)
• Honda meanwhile reports that the new Insight outsold all other full-sized passenger vehicles in Japan in April. It’s the first time a hybrid model has topped the national sales chart (Financial Times)
• President Obama’s auto taskforce has chopped Chrysler’s planned marketing budget in half. It had wanted to spend $134 million in advertising over the nine weeks it’s expected to be in bankruptcy – but that’s been halved (Automotive News, subscription required)
Monday 11 May 2009
• Fiat Group CEO Sergio Marchionne rules out a rumour that he’s interested in expanding his weltpolitik to include Suzuki. Italian media had speculated that the Japanese company, which already has links with GM and Fiat, was in talks with Marchionne (Automotive News Europe, subscription required)
• Car sales in China, which overtook the US to become the world’s biggest market in January, rocketed by 37% in April (The Times)
• Germany has plans to protect Opel’s assets in the event that GM files for bankruptcy in the coming weeks. Economy minister Karl-Theodor zu Guttenberg said they would be handed over to a trustee, while a consortium of banks would continue to provide bridge financing (Automotive News Europe subscription required)
• GM’s likely ‘fast-track’ Chapter 11 bankruptcy – a decision for which is due by 1 June – could be held up by complaints by the company’s bondholders. They are likely to oppose a plan to split GM’s assets into ‘good GM’ and ‘bad GM’ new companies, as the creditors’ rights could be diluted (Financial Times)
• To avoid bankruptcy, GM must persuade bondholders swapping $27 billion in debt for 10% of risky stock, close deals with unions, shut factories, axe dealers and sell brands. All in three weeks (Detroit News)
• Our sister title Parker’s price guide reveals that few motorists believe the UK scrappage scheme, which starts on 18 May, will actually leave owners better off (Parker’s)
• Budget caps and new rules in Formula One are likely to damage the lucrative UK F1 industry, a new report warns. Author Prof Rick Delbridge said the industry was worth £6 billion but claimed the proposed £40m limit from 2010 could stifle the sector (BBC News)
Friday 8 May 2009
• Nissan’s Sunderland factory has hired 150 staff on short-term contracts to meet expected extra demand for cars as a result of the scrappage scheme (BBC)
• Volvo could be sold by Ford as early as June this year, but there are said to be less than five potential buyers (Autocar)
• Toyota has reported its worst ever annual loss. The Japanese company said it made a net loss of £2.9bn in the year to 31 March, compared with a record profit the year before. Toyota said it expects to make a £3.7bn loss in the financial year ending in March 2010 (BBC)
Thursday 7 May 2009
• Volkswagen and Porsche have confirmed they are in advanced talks to merge after the Piech and Porsche families agreed to form a new company, rather than Porsche take over VW. The new structure will be revealed in the next month (BBC News)
• The VW-Porsche merger brings to an end the three-and-a-half year saga of who will take over Europe’s biggest car maker (Financial Times)
• ‘The independence of all brands and explicitly also of Porsche shall be ensured,’ Porsche said in a statement
• Talks to inject Government aid into Jaguar Land Rover are close to collapse, the BBC claims. It was given a final offer by BERR on Friday and, although it hasn’t yet rejected it, JLR bosses are worried about the terms of the state guarantees which would include appointing its own chairman and vetoing management decisions (BBC News)
• New GM CEO Fritz Henderson has said the future of the Corvette sports car is secure as it contributes to the company’s coffers. He also added that development of the new C7 car is on track, but wouldn’t confirm when it would go on sale (AutoWeek)
• Fiat Group CEO Sergio Marchionne has admitted he will become chief executive of Chrysler once it emerges from bankruptcy. Marchionne believes Chrysler will emerge from bankruptcy within 60 days (BBC News)
• Carlos Ghosn has been named as chairman of the board of directors at Renault after Louis Schweitzer chose not to renew his directorship. Ghosn is now CEO and president of Renault, while Schweitzer has been appointed honorary president of Renault (Renault)
• UK car sales were down 24% in April, compared to the same month in 2008. It’s the 11th consecutive monthly drop in new cars sales, and the number of new cars sold in April (133,475) was the lowest since 1991 (BBC News)
• Renault has opened discussions to sell cars through Saturn’s dealers if GM can find a buyer for the car maker, while Chinese manufacturer Geely has submitted a bid to purchase Saab from General Motors (Wall Street Journal)
• Audi sold 12,156 vehicles in China in April, a new sales record for the German company in China, and a 21% increase on the same month in 2008 (Audi)
Wednesday 6 May 2009
• BMW today posted a first quarter loss of €55 million and refused to give a profit forecast for the full year (Automotive News, subscription required)
• Fiat plans to axe both Vauxhall’s plants in Ellesmere Port and Luton if it takes over GM’s European division. Documents labelled Project Football were revealed by German newspaper Frankfurter Allgemeine Zeitung, but Fiat dismissed the report as speculation (Autocar)
• Opel’s labour leader last night confirmed that Fiat boss Sergio Marchionne plans factory closures in the UK and Italy (Financial Times)
• Collapsed British van maker LDV has won a last-minute reprieve. Russia’s GAZ Group today agreed to sell LDV to a Malaysian firm (Financial Times)
• GM in America has outlined plans to pay off debts by issuing new shares to wipe out the holdings of existing investors. ‘There will be very substantial dilution to existing holders of GM common stock,’ the firm announced to the stock exchange. Shareholders will essentially be offered one new share for every 100 of the old stock – leaving today’s holders with just 1% of the new shares. The US Treasury will hold 50% of the new shares, the remainder being divvied up between unions and Fiat, if the shake-up is approved (BBC News)
Tuesday 5 May 2009
• Fiat’s bid to acquire stricken GM’s European wing – announced formally yesterday – has hit obstacles already. If approved, the deal would create the world’s second biggest car maker across its Fiat, Alfa, Chrysler, Jeep, Dodge, Opel and Vauxhall brands. But the German government is stipulating 14 conditions the new supergroup must meet before granting its approval (Financial Times)
• Germany’s vice chancellor Walter Steinmeier warns Opel’s future owners would have to base their HQ in Germany as part of a strict package of guidelines (Financial Times)
• Other groups interested in acquiring Opel/Vauxhall include Canadian car parts group Manga International, sovereign wealth funds from Abu Dhabi and Singapore, and three private equity houses
Unions in the UK representing around 5000 Vauxhall workers fear for job losses in a combined Fiat-GM-Chrysler structure. Unite leader Tony Woodley said: ‘This move sends shivers down my spine’ (BBC News)
• Tata has taken around $500 million in bookings on its Nano, the world’s cheapest car (Reuters)
• A New York bankruptcy court will today hear further arguments from dissident Chrysler lenders seeking to block the restructuring of Chrysler. They are a small group of creditors owed $6.9 billion, who are pushing for a higher return on their debt (Financial Times)
Monday 4 May 2009
• Fiat CEO Sergio Marchionne is to confirm plans to build a European super group. After last week’s formal deal to run Chrysler, he’s today likely to confirm talks to buy GM’s European arm, Opel and Vauxhall (Financial Times)
• The new expanded Fiat would create a company with €80 billion revenues and sales of 6m-7m vehicles a year – second only to Toyota (Financial Times)
• Fiat group chairman Luca di Montezemolo says Opel would be the ‘ideal partner’ and that a takeover is ‘an extraordinary opportunity’ – creating ‘a very strong group’. Marchionne is due to meet German government ministers today (BBC News)
• GM is this week accelerating talks with the UAW union in a bid to close around 2600 dealerships (Wall Street Journal)
• Jaguar Land Rover chief exec David Smith has dismissed the UK Government’s recently announced scrappage scheme – saying it will have negligible effect on sales of premium and small cars. ‘Strip away the distortion of the scrappage schemes, the underlying trend [for new car sales] is downwards in Europe’ (The Daily Telegraph)
Friday 1 May 2009
• Chrysler chairman and chief exec Bob Nardelli, the 61-year-old who announced he’s standing down once the Fiat alliance is live, will walk away from his job with nothing. ‘I’ll pick up my pencil and walk out the door,’ he said. No golden parachute for the man who caused uproar in his previous post as CEO of Home Depot where he took a $210 million severance package (Financial Times)
• A group representing 20 Chrysler lenders holding $1 billion of debt are set to object to the firm’s Chapter 11 bankruptcy (BBC News)
• Chrysler’s enforced Chapter 11 bankruptcy puts the spotlight on GM, whose own deadline for a viable turnaround plan is 1 June 2009. The UAW union and bondholders urgently need to agree to concessions in the next 30 days (Detroit News)
• Jaguar Land Rover’s hoped-for £800 million finance aid is in doubt because of wrangling between the UK Treasury and Lord Mandelson’s business department, reports The Guardian. It claims conditions on the Treasury loan are so stringent that parent firm Tata Motors will never agree to them – putting thousands of jobs at risk (The Guardian)
• Meanwhile, JLR today announced it had struck a deal with Tata to import Jags and Land Rovers into India. It will form a new Premier Car Division (sound familiar, PAG anyone?) and the first showroom opens in Mumbai in June 2009 (JLR)
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