Comedian Frankie Boyle once said “So the best tennis player in Britain is Scottish? I’m not up to speed on my Nostradamus but isn’t that one of the harbingers of the apocalypse or something?”. Well, here’s another unlikely scenario, manufacturing jobs flowing INTO the U.K. The BBC report that Dutch luxury car maker, Spyker, is calling it a day in Zeewolde, The Netherlands and moving all manufacturing to Coventry, West Midlands, UK. Spyker warned that 45 out of the 135 jobs would be at risk during the transfer, although, the headquarters would stay in The Netherlands. The main reason behind this shift is that Spyker want to be closer to its main parts supplier, CPP Manufacturing LTD. Victor Muller, Spyker Cars chief executive, said “With approximately half of our vehicles’ parts and components sourced in the UK, and virtually all key suppliers being located there, moving closer to our suppliers and engineering partners will result in substantial savings and tangible efficiency improvements.” While all those reasons are sound, could another big reason for the move be the UK pound nearly reaching parity with the Euro? Who cares? We’re just grateful for the jobs. Dank u.
General Motors made one point very clear, 100 percent clear, the restructuring plan could only be achieved when European member states with Opel plants give some financial help. So the plan works only with state aid. The idea that General Motors can finance this on its own was not shared by General Motors, this possibility does unfortunately not exist
EU Industry Minister Guenter Verheugen reveals to Automotive News [sub] that GM does indeed seem to be trying to limit the amount of US taxpayer money spent on its $4.9b rescue of Opel. GM’s Opel fixer Nick Reilly explains “we have indicated that we will inject some GM funds into that requirement too. That is quite difficult because we are also going through a restructuring of our U.S. operations and other parts of the world.” We’ve already seen loans for jobs floated in the UK, where Reilly came up just short of offering to save Vauxhall jobs for government restructuring loans on a quid-pro-quo basis. And GM will have to continue walking that fine line, as EU competition rules forbid member states from offering financial support in exchange for jobs, especially if the saved jobs come at the expense of jobs in another EU member state. But Germany’s leadership was humiliated by GM’s decision to drop the sale of Opel to Magna, and has already ruled out funding an Opel restructuring that would keep the automaker under GM control. Will Belgium, Spain and the UK be able to come up with enough money to make the restructuring happen? Or will GM simply be forced to dip deeper into its taxpayer-funded escrow account? GM’s plan will be announced this week, and we’ll be watching.
For weeks now, the only realistic bid for Volvo has has come from the Chinese automaker Geely. They’ve been Fords’ “preferred bidder” for about a month ago, and last week, Geely’s management were in meetings with Volvo’s unions, and with Volvo AB (commercial vehicle company) about the Volvo trademarks – which are owned 50/50 between Ford and Volvo AB. At the same time time, Ford seemes to be in no hurry to sell Volvo, leading many to speculate that Ford was dragging their feet waiting for new and improved offers. We’ve been posting about the two other possible bidders, Consortiums Jakob and Crown earlier, and reports in Swedish media today say that Crown are now ready to make an offer, to be presented this week.
UBS has cut Fiat’s rating from “buy” to “neutral”. UBS cites its cautious views on car demand in Europe and Brazil as well as heavy trucks and machinery, the areas in which Fiat are strongest. UBS notes that Sergio Marchionne’s grand scenario of spinning off Fiat’s auto division is still the company’s goal, and PSA Peugeot-Citroen as a “likely candidate”. In the near term, UBS thinks that Fiat’s market share price of €10 per share is fair, as a consolidated manufacturer. Another reason why UBS cut Fiat: Chrysler. The article finishes with a stark warning that the “value of Chrysler to Fiat has been cut to 1 euro from 2 euros.” In the interest of fairness, we shouldn’t listen too much to the stock market as these are the same people who proclaimed that the banking sector was in rude health, right up until they asked for a bailout, catching the market “by surprise”. Especially considering Sergio Marchionne is the non-executive vice chairman of UBS’s board of directors. These caveats aside though, it’s important to note that Chrysler has realistically gotten Fiat no closer to the magical 5m annual sales number it needs to spin off its auto business, nor has it added real value. And Marchionne is apparently eying up PSA as the next target in his mad march to world domination. What a gas.
Automotive News [sub] reports that GM will rush out its $4.9b restructuring plan for Opel in December, as it seeks to ease worries on the continent about the fate of the troubled division. “Our plan is very similar to Magna’s. I don’t think it’s worse,” GM’s Nick Reilly told reporters near Opel’s largest plant in Zaragoza, Spain. Reily has said that as many as 10,000 jobs and 20 to 25 percent of Opel’s production capacity could be cut in the restructuring. Though Reilly refused to indicate where cuts could take place, he did say that GM would not transfer production from Zaragoza to Eisenach in eastern Germany, as Magna had planned to do. He also previously implied that British government loans could prevent or mitigate a planned 800-job cut at Opel’s Vauxhall operations in Britain.
Looks like GM may have done some creative accounting after all – at least according to Swedish Government and their consulting firm KPMG. As we’ve reported the last couple of days, Saab’s rescue has been hanging by a thread due to questions around the company’s financial situation prior to the start of the financial crisis. Saab needs the EU to approve the Swedish Government’s guarantee of an EIB loan to Koenigsegg group if the deal is going to go through. If Saab, during the summer of 2008 – when the financial crisis started – were not in sound financial condition, the EU cannot, will not, approve Swedish government’s guarantees to the EIB loan, and the loan will not be granted. And reports from di.se yesterday almost laid that possibility to rest, with reports that GM had lost $ 5.100,- on each Saab-car sold during the last 8 years. Now, as commentator dlfcohn and others at ttac, as well as several commentators at di.se have pointed out, creative accounting can be useful in major corporates i.e to avoid taxes in tax-heavy countries. This, apparently (at least according to Swed.gov’t/KPMG) was the case with GM/Saab. Read More >
For Monday, November 23, EU Economy Commissar Günther Verheugen invited all EU Economy Ministers to come to Brussel to attend an Opel summit. GME’s new chief Nick Reilly will also attend, reports Unternehmer.de. The idea behind the meeting is anti-competitive: “The Commission is strictly against any bidding war with subsidies,” Verheugen said. Any government help for GM and Opel will be subject to intensive scrutiny from Brussels. Verheugen doesn’t want to rule out government help, as long as EU rules are not broken.
Don’t read too much into this meeting. Read More >
GM Europe’s head, Nick Reilly, has suggested that the job losses at Vauxhall UK may not be as bad as was feared. Before GM did a U-turn with the sale of Vauxhall/Opel, Magna agreed with Vauxhall to cut 800 jobs, no forced redundancies, and keep the Luton and Ellesmere Port plants open. Then, GM realised they liked Vauxhall/Opel so much, they kept the company and put its European operations back at square one. So far, with “New GM” in control, the results can be summed up in 4 words: Annoyed the German government.
Automotive News [sub] reports that the newest addition to Chrysler’s new Ram brand will be the Fiat Dobló, a compact van in the style of Ford’s Transit Connect. The latest generation Dobló has been previewed, and will go on sale in Europe early next year. The Rambló will hit the US market in 2012, and like the Transit Connect, it will be built in Turkey and imported. Like Ford’s Turkish hauler, the Dobló will likely be imported as a passenger vehicle to avoid the infamous “chicken tax” and will be converted for commercial use upon arrival. European versions get a number of diesel and gas engine options (with CNG and electric options planned), but there’s no word on what choices the US market will be given. Meanwhile, how big of a crosshair grille will fit on that thing? Or, to put it differently, how will this Euro-derived efficiency-oriented urban hauler jive with the Ram brand’s overbearingly bro-magnon branding?
Swedish business site di.se has done some numbercrunching, and figured out that GM has lost SEK 35,000,- (eq aprox $ 5,100, at the current exchange rate) on each Saab sold the last 8 years. As many of TTAC’s readers have pointed out in various comments, GM never made money on Saab. Truth is; they lost a total of SEK 39 billion (3.9 billion Euros) during their ownership, according to di.se’s analysis . The last 8 years has been heavy; a loss of SEK 32,2 billion, or 35.000,- kronor on each Saab sold. That’s $ 5.100,- on each car. This year alone GM has had to take an SEK 6.2 billion cost on the ailing carmaker, SEK 5.2 of those are amortization of debts. This is why it’s crucial for Koenigsegg Group that the EU commission rules that Swedish government’s guarantees on Koenigsegg’s loan from the EIB are not subsidies. But since Saab has been on life support for so long, it would be almost impossible to defend Saab as a healthy company, and without the Swedish government’s guarantee, the financial plan from Koenigsegg Group will fail. Maybe they can argue that when it comes to Saab, there are no subsidies, just business as usual.
Dutch motorists can prepare themselves for spending up to four years in the slammer and to pay fines of more than $100,000 if they intend to tamper with the automotive equivalent of an electronic ankle bracelet which their government will put in their cars. Read More >
Saab has not had an easy path to salvation. The Koenigsegg Group has had to provide finances, agree to a price and conditions with GM, get loan from European Investment Bank (EIB),and coax the Swedish Government into guaranteeing loans. Now there’s one more hurdle left, and it’s the same challenge that scuppered the Opel to Magna deal: The EU.
Reports of recent weeks in the Scandinavian media have told us that the EU is thinking the Saab deal over. And when mighty EU thinks, things take time… So, what are they thinking about? They have to decide whether Swedish Govt’s guarantees to SAAB’s loan in the European Investment Bank should be considered subsidies or not. EU countries are not allowed to subsidize unprofitable companies – and the EU has some questions on SAAB’s and Koenigsegg Groups financial plan, and Saab’s results prior to the reconstruction. So the whole thing might stretch into next year until – or if at all – the deal is closed. Incidentally, questions about the anti-competitive nature of the German government’s support of the Opel to Magna deal killed that sale already. But does GM want Saab back as badly?
In October 2008, new car sales in carpocalypse-affected Europe had dropped by 14.4 percent. A year later, the Old Country is slowly coming back to normal. In Europe as a whole, new car registrations grew by 11.2 percent over October in the previous year. This according to the latest statistic of the European Auto Manufacturers Association ACEA. Since losses turned into gains in July, this is the first time Europe comes in with double digit growth. However, not all is rosy. Read More >
Worried about increasingly efficient cars and dwindling tax revenue at the pump, Dutch lawmakers approved the first “pay-as-you-drive” tax system in Europe. Of course, the dwindling revenue is not the official reason given. The official intent is “to protect the climate and to reduce traffic jams,” reports the Deutsche Welle. Now who can be against noble causes such as those?
Nobody even mentions gasoline taxes, the legalized form of highway robbery in Europe. The pay-as-you-drive system will replace the old system that taxes ownership. That will go. The fuel tax remains. Dutch citizens are taxed twice. At the pump and by the kilometer.
Beginning in 2012, Dutch motorists will pay approximately 3 Euro-Cent per driven kilometer, until 2018, the amount will rise to 6.7 Cent. The actual costs vary according to size and engine of the car. A Renault Twingo will cost you 1.4 Cent per km, an Audi A8 will get the Dutch government 16.6 Cent per klick.
GM CEO Fritz Henderson’s promises of independence for Opel made the right noises, but they carefully avoided any discussion of the actual role GM envisions for its German division within its global strategy. The latest updates seem to indicate that GM will keep Opel for its engineering expertise, but that the brand will be subordinate to Chevy’s global ambitions. Henderson delivers the slapdown [via Reuters]:
Opel is a regional brand and I don’t see that changing. That doesn’t mean I’m closed to ideas about how it can be used elsewhere; but the measure of the Opel brand’s success will be Europe, because if you don’t win here all the discussion of exports will be irrelevant
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