Down to the wire, and nothing: German unions had set Opel a deadline until today to come to an agreement about the future of Opel. The unions had offered to forgo a 4.3 percent pay hike and waive future pay raises if Opel extends a moratorium on plant closures through 2016. Today’s deadline passed without an agreement, Reuters says. (Read More…)
In July, the good old boy contingent was horrified to hear that Ford would contemplate building Ford tough trucks from a material considered good enough for beer cans: Aluminum. Now, they will be absolutely terrified by the news that GM wants to build trucks from a material known to treat heartburn: Magnesium. (Read More…)
After a lot of he loves me, he loves me not, GM and Peugeot PSA finally took their fledgling 7 percent relationship a few concrete steps forward. At least on paper. GM and PSA will not just buy new parts together. They will share platforms, the key to make joint purchasing work. The timing of this announcement, coinciding with a bailout by the French government, however is a bit unfortunate. (Read More…)
Tomorrow, GM’s sick French partner PSA Peugeot Citroen will publish quarterly sales. They are expected to be très dégoûtant, and will set off a chain reaction: The credit rating agencies will put PSA’s already alarming rating down a notch further to near-dead status. Its captive financing arm BPF, a bank in its own right, will go down with the mothership. The bank’s rating is not allowed to stay more than two notches above the parent. This will drag the bank into junk bond territory, and borrowing costs will explode. The French government is here to help – for a price. (Read More…)
GM wants to double its $5 billion revolving credit line. However, the junk credit rated company does not want to pay junk credit interest for it. “We think we can get it priced as if we’re investment grade, which is kind of one of our goals going into 2013, to achieve investment grade,” GM CEO Dan Akerson told Bloomberg yesterday in Sao Paulo.
Hong Kong, and I speak from experience, is a great place to incorporate, to save taxes, and to throw a cloak of secrecy over financial operations which otherwise would be out in the open. In the case of GM, it is also a great place to save their Korean behinds. In December 2009, GM sold a 1% stake in its Shanghai-GM (SGM) joint venture to the Hong Kong part of its Chinese partner SAIC for the paltry sum of $85m. GM also put its India business into a Hong Kong based joint venture (HKJV). GM provided the India business, SAIC provided cash. As it turned out later, unearthed in Ed Niedermeyer’s seminal oeuvre about the mystery golden share, SAIC also underwrote a $400 million loan. In its darkest hour at the end of 2009, GM was kept afloat by the Chinese. Now, history seems to repeat itself in some convoluted way. (Read More…)
The great October surprise announcement of progress at GM’s Opel front is turning into an October letdown. What will be announced “this month, early next month” will be a joint purchasing agreement between GM and 7 percent partner PSA Peugeot Citroen, GM CEO Dan Akerson told Reuters ahead of the Sao Paulo Auto Show’s media preview. In the industry, the joint purchasing agreement is seen as a non-event.
(Read More…)
Workers at an LG Chem plant in Holland, Michigan have already been put on furlough before a single battery has come off the line. Workers have three weeks of paid “work”, and one week off unpaid at the $300 million plant.
The Voluntary Employee Beneficiary Association, or VEBA, was initiated as a way to get retiree healthcare costs off the books of Detroit’s auto makers. While VEBA makes balance sheets look better, they are still an exorbitant legacy costs for the Big Three, and things are about to get a lot worse.
GM’s stock is still considered a “Buy” in the eyes of much of Wall Street, but analysts say that more changes are needed to accelerate the pace of growth in the post-Bailout era.
The Opel/Vauxhall Cascada got a surprisingly warm reception on TTAC, considering that it’s a ragtop with humble origins based on the Delta II platform (thank you, readers, for correcting my mistake).
Are you planning a vacation to Portugal, Spain, Italy or a similarly depressed Eurozone country in the next year or so, you’ll have another choice for topless motoring on your way to the topless beaches.
“It’s too early to say for sure whether GM will purchase the controlling stake in HKJV, and thereby regain full control of its India business. It is unlikely that SAIC will relinquish its grip on India, just because it suddenly can’t service the capital requirements of the HKJV. Possibly, more information will become available when GM files its Q3 paperwork, or possibly later.”
As it turns out, they did.
GM’s Detroit-Hamtramck plant will get a $35 million investment to build the Cadillac ELR, a luxury coupe that uses the Chevrolet Volt’s gasoline-electric drivetrain.
Reuters reports that battery maker A123 Systems is filing to bankruptcy protection in Delaware.
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