“Enough’s enough” said Philippe Maystadt, the European Investment Bank president. Or words to that effect. Anyway, this Monday the banker signaled that the institution was approaching the limits of its support for the car industry.
Speaking at the bank’s annual press conference, and chronicled by the Financial Times, Maystadt confirmed that the EIB planned to authorize €7B in loans for car makers in the first half of the year, with most of the funds to develop clean cars.
But he warned carmakers—who have asked the EIB for some €40B in low-interest loans—that they had better look elsewhere, because the EIB doesn’t want to be over-exposed to the perilous industry. “It would be a mistake to concentrate a too big part of our lending on one sector,” Maystadt said. The auto industry already accounts for more than 10 percent of its €66 billion in expected lending this year.
Maystadt said he was prepared to a do “a bit more,” but added: “Doing even more for autos would mean doing less for other sectors.”
The automakers won’t like to hear that. Actually, they would like the EIB to be much more generous.
Last week, Carlos Ghosn, chief executive of Renault, and the current president of the European Automobile Manufacturers Association (ACEA), the industry trade group, urged governments to do more as he predicted that the industry was facing a 25 per cent drop in output this year.
GM has warned EU member states that its European operations could become insolvent next month, placing 300,000 jobs at risk.
In addition to asking the EIB to step up its overall lending, Mr. Ghosn and other auto executives have also called for it to scrap a €400M ceiling on the amount of money it will lend to a company in a given year.
“No dice,” Maystadt said. In a more polite way, of course.
GM has warned EU member states that its European operations could become insolvent next month, placing 300,000 jobs at risk.
SOP for GM. Blackmail whoever and everyone you can for as much cash as you can get.
“Place your bets gentlemen” who’s going to survive?.
Never mind what the EU says. As you may already have guessed, I live in the great EU and have tried to undertand just how it works for many years now (I still don’t, but I haven’t given up, trying)
Does anyone think that the French especially, and the Italians are actually going to let their car industry go Tango Uniform just because the EU says so? The Germans will survive because….. they must – Hans and Ulrich will buy VWs, Mercs and Beamers when they get the message that each company is on their own.
So – that leaves Saab (bye bye), Seat (maybe VW will save them, maybe not), Ford (no govt partner but maybe they don’t need one – increasing market share), Volvo (hope you like egg fried rice) and Vauxhall/Opel (already threatening to take 300K people with them). As you can see, I suspect it’s GME…
The Japanese and the Koreans will survive – they’ll sacrifice the offshore ops to protect the home company and return (with a vengence).
The rest are bit players – the Jaguars, Land Rovers, Maseratis etc… to be honest they don’t count. I would mourn the loss of each and every one of them, but they don’t all have rich parents or sugar daddies.
Europeans are better at trash talk than their ‘friends’ in the USA, but they’ll….roll-over.