Wednesday 31 December 2008
• GMAC, GM’s finance arm, said it would immediately revise its criteria for providing loans, after the US government bail-out of the General’s credit arm. It will now supply credit for anyone with a score of 621 or more on the Fico scale, the scale used to assess Amercian customers’ creditworthiness (Financial Times)
• The news means that 80% of US consumers would now qualify for a loan from GMAC – which should improve sales in the depressed US market (Detroit News)
• Chrysler is being lambasted for taking out full-page adverts in the American national press thanking the nation for supporting its auto industry. But critics point out this is a fresh waste of bail-out resources, as pages in the Wall Street Journal – one of the titles in which the ad ran – reportedly cost up to $264,000. Note to CAR’s commercial people – we should learn from these rates! (Autoblog)
Tuesday 30 December 2008
• BBC Two’s Top Gear television show will be forced to scale back on its expensive stunts and foreign filming locations for the next series, according to executive producer Andy Wilman (The Telegraph)
• Billionaire investor Kirk Kerkorian has sold his remaining shares in Ford Motor Company, having once amassed a 6.5% stake in the Blue Oval worth $995m (Detroit Free Press)
• Japanese cars sales for 2008 are projected at 5.11m – the worst since 1980 – according to figures from the Japanese Automobile Manufacturers Association. Thing will get worse in 2009, with a predicted drop to 4.86m sales, the lowest figure for three decades (Detroit Free Press)
• The US government is making the final arrangements to transfer the first part of emergency federal loans to GM and Chrysler (Automotive News, subscription required)
• GM will receive a further $1bn in aid (in addition to the $13.4bn the US government has promised it by mid-February 2009), while the US Treasury Department will now purchase $5bn in equity from GMAC (Automotive News, subscription required)
Monday 29 December 2008
• It’s not all bad news. There are auto makers out there doing very well for themselves. Take Porsche. Just before Christmas, it announced that its profits had exceeded its revenues – with pre-tax gains of €8.57bn ($12bn), up 46% (Financial Times)
• Tub thumping time. Detroit News columnist calls on northerners to boycott Alabama and southern states which house many of the overseas car makers’ factories in the US (Autoblog)
• GMAC, GM’s car finance business, is negotiating with bondholders to swap $38 billion (£26bn) in debt for GMAC equity. This is crucial if it is to become a bank holding company – giving it access to the US Government’s $700bn bank bail-out fund as well as the ability to issue government-guaranteed debt (The Times)
Friday 26 December 2008
• Stricken Ssangyong won’t be helped by the South Korean authorities – unless parent company China’s SAIC produces a viable bail-out too. Cash-strapped Ssangyong has idled its plants and not paid staff for three weeks (Financial Times)
• General Motors’ credit arm, GMAC LCC, has won Federal Reserve approval to become a bank holding company. The change gives it access to US government lending programmes for financial institutions – and means GM and Cerberus have both reduced their stakes. GM did own 49% and will lower that to less than 10%, while majority holder Cerberus holds 51% but will control less than 14.9% of voting shares (Automotive News, subscription required)
• Oil prices this week slipped back below $40 a barrel (BBC News)
• Akio Toyoda, the 52-year-old grandson of Toyota’s founder, is tipped to become the new president of Toyota in 2009 (Automotive News, subscription required)
Thursday 25 December 2008
• Christmas Day… a brief lull in the chaos in the auto industry around the world. All CAR’s thoughts go to those who are affected by the change and anyone whose job is in jeopardy…
Wednesday 24 December 2008
• Chrysler’s turnaround plan is ‘reasonable and achievable’ says chief exec Bob Nardelli in an internal memo (Automotive News, subscription required)
• GM is going through its heritage collection in Detroit and selling off minor or little used cars (Automotive News, subscription required)
• Toyota president Katsuaki Watanabe is expected to stand down in 2009. Is it linked to Toyota’s recent poor financial performance, or the ailing health of current chairman Fujio Cho whom Watanabe is tipped to replace? (Wall Street Journal)
• Toyota commits to staying in F1 – even if it has to reduce the largest budget in the sport, rumoured to be $445 million a season (Autoblog)
• GM, Chrysler and Ford have been stunned by the political and PR backlash to their appeal for state aid. All three are now furiously spinning the story through PR, new websites and social media campaigns (Financial Times)
• Honda is considering moving its HQ outside Japan to thwart the rise in value of the yen compared with the dollar and Euro (Autoblog)
• Subaru has delayed ‘indefinitely’ the UK launch of the Impreza diesel because of the soaring value of the yen (Autocar)
Tuesday 23 December 2008
• Financial Times’ Lex column on the current cashflow turmoil at Jaguar Land Rover: ‘The truth is that Tata Motors overpaid for a trophy asset at the top of the cycle and must now nurse it through a particularly severe slump in demand.’ (Financial Times)
• Korean car exports stutter; world’s fifth-biggest car maker Hyundai-Kia cut production and freeze wages (Financial Times)
• Toyota could cut up to 15% of its UK workforce after yesterday’s announcement that it will go into the red for the first time since 1941 (The Times)
• ‘General Motors’ equity may be largely if not entirely wiped out as it complies with the restructuring targets laid out in the U.S. auto bail-out’ (Automotive News, subscription required)
• Michigan blamed the slumping Detroit auto industry as an exodus of 46,000 left the area in 2007-08. The state predicts its population will fall below 10 million next year (Detroit News)
Monday 22 December 2008
• Toyota today warned it would post its first-ever operating loss in the wake of the financial crisis. It blamed falling sales and a surge in the value of the yen (Financial Times)
• Toyota expects to lose 150 billion yen (£1.1 billion) in operating profits – down from a 2.27 trillion yen profit in 2007 (BBC News)
• A new flight between Detroit and Shanghai – China’s automotive capital – has been postponed (Detroit News)
• ‘For many Detroiters, sighs of relief Friday on hearing of the federal auto loans quickly gave way to an agonized realization of just how painful the restructuring ahead will be. The Detroit Three and, by extension, the broader Michigan community must now carry out deep new cuts in the economic fiber of the state’ (Detroit Free Press)
• Tata agrees to inject ‘tens of millions of pounds’ into Jaguar Land Rover to ease cash flow as UK government continues to ponder state aid (Justauto, subscription required)
• It’s difficult to know which news reports to believe about the likelihood of state help for Jaguar Land Rover (Birmingham Post)
Scroll below to see the video footage of President George Bush on why he’s stepping in to help the car makers formerly known as the Big Three. Do you agree with the bail-out? Or is it just money down the drain and a short-term fix? Click ‘Add your comment’ and have your say
Friday 19 December 2008
• President Bush has just approved up to $17.4 billion in emergency federal aid to prevent the collapse of GM and Chrysler (Automotive News, subscription required)
• Land Rover scraps its multinational G4 Challenge adventure series. ‘We have and will continue to take swift and decisive actions for the benefit of the business; unfortunately that means the Land Rover G4 Challenge has to come to an early close,’ said MD Phil Popham
• Nissan delays launch of 370Z. Production was due to start this month, now pushed back to April. UK sales won’t start until July 2009
• Citroen managing director Gilles Michel will quit PSA to join French government’s new strategic investment fund designed to keep domestic businesses competitive in the global slump (Automotive News, subscription required)
• White House says it is considering forcing GM and Chrysler into ‘orderly bankruptcy’, with Chapter 11 protection an increasingly likely outcome. Officials say decision on $15 billion aid package ‘very close’ (Financial Times)
Thursday 18 December 2008
• Ferrari assures trades unions it will not make any of its 3000 staff at Maranello factory redundant in coming year; staff might be shuffled between departments, but no job losses. Sources at company and unions disclose to CAR that this year’s production is likely to mirror the 6500 cars built last year and sold across 54 markets. Margins likely to increase from 15% to 16%
• Strange times: Indian car maker Tata is to sponsor the Ferrari F1 team for an undisclosed sum (Fiat have longstanding engineering alliance with Tata); UK business secretary Lord Mandelson confirms it has held talks over emergency funding with Jaguar Land Rover, but warns ‘there is not an open chequebook’ (BBC News)
• The UK Government is drawing up a provisional rescue package for the beleaguered British auto industry – but the conditions for taxpayer loans and credit guarantees are said to be ‘very tough’ and at least as demanding as a commercial lender would offer. They don’t want to be seen to be soft on one industry, say Whitehall sources (Financial Times)
• A report in the Wall Street Journal that GM is back in merger talks with Chrysler is untrue, says a GM PR chief (Detroit News)
• German government ‘will not decide aid package for Opel before Christmas’ (Automotive News, subscription required)
• UK car production plunges by a third compared with November 2007 (SMMT)
• BMW loses Italian law case against Shuanghuan. It claimed the CEO SUV was too similar to its first-gen X5, but judges in Italy – where the CEO is sold – disagreed (Automotive News, subscription required)
Wednesday 17 December 2008
• Chrysler announces it will idle all its plants from 19 December for one month; claims its dealers are losing a quarter of sales because they can’t access credit (Chrysler)
• Another big bill for the auto industry: EU finally approves cuts in CO2 limits of 18% by 2015 (Automotive News, subscription required)
• Honda boss Takeo Fukui confirms Honda has stopped all development of the new NSX (Autocar)
• Honda cuts its profits forecast by 67% in the third profit warning of the year (Financial Times)
• European car sales slumped by 26% in November – the biggest drop since 1999 and the seventh monthly fall in a row, according to ACEA (BBC News)
• GM, Ford and Chrysler are burning through around $200 million a day (Detroit Free Press)
• Ford is positioning itself as the strongest of the Big Three and making sure customers know that it’s not tapping the US government for bail-out aid quite yet (Detroit News)
Tuesday 16 December 2008
• The Bush administration could approve its rescue bid as early as Wednesday. Auto industry is likely to be offered a slice of cash from the bank bail-out fund (Automotive News, subscription required)
• Subaru announces it is cancelling its 2009 World Rally Championship programme, following in Suzuki’s footsteps who axed its team yesterday. The Prodrive-run Subaru World Rally Team won six world titles.
• Volvo Trucks has more cancelled orders in Europe than new ones in October and November. It said customers were putting off new lorry purchases (Financial Times)
Monday 15 December 2008
• France is first EU country to provide credit guarantees to its car makers’ financing arms. Renault and Peugeot received €779 million as part of president Nicolas Sarkozy’s aid package (Financial Times)
• Toyota shelves plans to build the Prius in the US. American sales of the hybrid have halved year-on-year to 8660 in November (Automotive News)
• Aston Martin owners Kuwait’s Investment Dar is considering selling up to a fifth of the sports car maker. It’s also looking to borrow up to $1 billion to refinance debt (Automotive News)
Saturday 13 December 2008
• Bush administration looks to tap the $700 billion Troubled Asset Relief Programme (Tarp) to provide a bridging loan to see the American car makers alive over Christmas. ‘The Treasury will probably follow the model it used in the Fannie Mae and Freddie Mac rescue, imposing conditions in the form of a contract with the companies receiving government aid. There is no limit to how sweeping these conditions could be.’ (Financial Times)
• UK Government poised to announce measures to help Britain’s car makers; Vauxhall offers Ellesmere Port workers a nine-month sabbatical on 30% pay (The Times)
• Republican senator John Dingell on the Senate vote: ‘Last night, some Southern senators kicked American workers in the gut. Senators from states where the international automakers do considerable business unpatriotically blocked the bill.’ (Detroit News)
Friday 12 December 2008
• US Senate vetoes auto industry bail-out. GM and Chrysler now facing bankruptcy. Shares in auto makers fall sharply around the globe; Nissan, Honda and Toyota dip by 10% as Japan’s Nikkei index opens (BBC News)
• Major stumbling block is the UAW who are refusing to agree to lower wages in 2009 to match non-unionised workers in foreign-owned implant factories in the South
• GM and Chrylser now desperate for the combined $11 billion they need to stay solvent until 2009
• 43 Democrats, 10 Republicans back the bail-out bill – seven short of the required number
• GM issued a statement last night: ‘We are deeply disappointed that agreement could not be reached tonight in the Senate despite the best bipartisan efforts. We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis’ (GM)
• Manchester in the UK rejects plans for a congestion charge in referendum. The majority of 2 million people in all the 10 boroughs said no (BBC News)
• See Rick Wagoner’s video briefing on GM’s troubles in this video issued 22 September 2008
Thursday 11 December 2008
• Sweden announces a $3.4 billion support package for its car makers, including credit guarantees, emergency loans and research funds. But the government rules out state ownership of Saab or Volvo, both of which are for sale (Detroit News)
• US House of Representatives finally votes and approves an aid package worth $14 billion to the American auto industry. The House passed the bill by 237-170 (BBC News)
• Details of bill are as previously reported: money is to be made available to GM and Chrysler and – potentially if their funding becomes rockier – Ford. Independent, Bush-appointed car tsar to oversee fund distribution and assist with restructuring. Government to become major shareholder in the Big Three. However, the bail-out could be delayed as it faces opposition in the Senate
• Strict conditions imposed on aid package: turnaround plans must prove they can repay debt, meet tough emissions targets, plan ‘advanced technology vehicles’, hit ‘a positive net present value’, and ‘rationalise costs, capitalisation, and capacity with respect to the manufacturing workforce, suppliers and dealerships’. Plan to be finalised by end of March 2009 (Financial Times)
• ‘Approval of an auto industry loan package will not save the domestic automakers, but it will give the Detroit Three a chance to save themselves’ (Detroit News)
• Carlos Ghosn to become chairman of Renault in May 2009. Many believe he is already spread too thin, but it’s common in French companies to have joint CEO/chairmen (Financial Times)
• Ferrari categorically denies reports on a UK website that it’s cutting 300 jobs.
Wednesday 10 December 2008
• The White House and Congressional Democrats have agreed a $15 billion aid package, which will provide short-term loans to GM and Chrysler to stave off bankruptcy until March. The proposal will force the car makers to answer to a presidentially appointed car tsar (who will have powers to withhold further loans if the pace of change is unsatisfactory) and make the government their biggest shareholder. Although agreed in principle, the bill still has to be fully ratified (Automotive News)
• Electric car maker Tesla is asking for $350 million government loan; four-door Tesla will be delayed without it (Detroit News)
• Chrysler’s deal with Chery to build small car is off (Financial Times)
Tuesday 9 December 2008
• ‘The $15 billion lifeline the Bush administration [will give] GM and Chrsler will do no more than buy the two car makers a little time’ (Financial Times)
• Ford discusses Volvo sale to China Changan, Chinese newspaper reports (National Business Daily)
• Volkswagen is first German maker to ask government for banking guarantees (Automotive News)
• Draft bill is leaked: exact sum of initial bail-out estimated at $15 billion, car tsar to be appointed, Big Three must drop their lobbying against Californian emissions regs, final and full rescue details must be prepared by 31 March 2009 (Detroit Free Press)
• The White House has given a ‘cool’ reaction to the Democrats’ plan for a $15 billion bail-out package (BBC News)
• Pressure mounts on GM chief exec since 2000, Rick Wagoner, to step down – even though he has stripped $9 billion of costs from The General under his watch (Detroit News)
Monday 8 December 2008
• Interim measures to save GM and Chrysler expected today; car tsar to be appointed (The Guardian)
• UK government refuses to bail out UK car makers, Lord Mandelson says (Daily Mail)
• President-elect Barack Obama tells NBC: ‘Millions of people, directly or indirectly, are reliant on that industry, and so I don’t think it’s an option to simply allow it to collapse’ (Detroit News)
• Component supplier Wagon Automotive has plunged into administration, putting 500 UK jobs at risk (Financial Times)
• Ferrari sales crash to just 92 in November; Maranello will announce 300 job cuts this week (Autocar)
• US Congress bail-out would mean strict government control – including rewriting contracts and possible mergers (Automotive News)
• Although November was bleak (every single manufacturer posted a year-on-year drop), there are some bright spots in year-to-date sales. Audi, Chevrolet, Dodge, Hummer, Jaguar, Kia, Nissan, Smart and Volvo are all up (SMMT)
Sunday 7 December 2008
• Big Three given breathing space with intermediate $17 billion aid package to be announced this week (Sunday Times)
• Jaguar and Land Rover are fast-tracking dealer launches in India through parent company Tata (Financial Times)
• 4500 jobs at risk as UK component supplier Wagon Automotive on brink of collapse (Sunday Times)
• McLaren team boss Ron Dennis predicts his team’s revenues will drop by a third as recession bites (The Observer)
Saturday 6 December 2008
• Oil prices slump to four-year low of $40 a barrel (Daily Telegraph)
• Honda has three credible offers for F1 team (Autosport.com)
• Chrysler appoints bankruptcy expert Jones Day lawyers (Daily Telegraph)
Friday 5 December 2008
• Audi announces it won’t have an official factory entry in the 2009 American Le Mans Series, instead focussing on DTM, the R8 LMS and testing its new R15 sports car ahead of the Le Mans 24hrs
• Honda shocks the F1 community by announcing plans to pull out. 800 jobs at risk at Northamptonshire, UK racing HQ unless buyer is found
• Big Three admit they will accept government control in return for aid. Rescue package could now total $125 billion. Chrysler chief exec Bob Nardelli admits he would merge with GM if forced to. GM chief Rik Wagoner says bankruptcy ‘is not our plan’ (Financial Times)
• ‘It’s not the Big Three. It’s 4 million jobs,’ says Rev Jesse Jackson (Detroit News)
Thursday 4 December 2008
• ‘The situation is indeed dire – one need only examine November’s sales data or Detroit’s truck-heavy line-ups, not to mention their tattered balance sheets and bloated compensation structures to concur. But that does not warrant subsidised loans that would, in the end, amount to a wealth transfer from taxpayers to the executives and unions of a shrinking industry’ (Financial Times)
• President elect Barack Obama says the Big Three’s appeal for $34 billion aid will be taken ‘more seriously’ by Congress (Automotive News)
• GM is talking to ‘other auto makers and large engineering houses’ to sell Saab
• SMMT confirms CAR’s story from earlier in the week: UK car sales have slipped by 37% in November, bringing year-to-date figure down by 11% compared with 2007. Private market has crashed by 45% (SMMT)
• America’s UAW union agrees to suspend the Jobs Bank programme (that pays laid-off staff most of their wage) and delay retiree healthcare payments during the crisis (Automotive News)
• Five VW board members pocketed €25 million by selling shares during the price spike in October (Financial Times)
Wednesday 3 December 2008
• GM plans to sell Saab as well as Hummer, shrink Pontiac and sell or close Saturn, it told Congress. Its wide-ranging survival package will cut US dealers from 6450 to around 4700 – and it needs $4 billion in federal aid by the end of the month (Automotive News)
• Chrysler LLC asks Congress for a $7 billion bridging loan (see video below). ‘Chrysler Financial is in need of immediate liquidity support,’ it admits. Cash reserves will fall to $2.5bn by the year end – yet its expenditure in the first quarter of 2009 is forecast to be $11.6bn (Chrysler press release)
• Porsche USA suffered a 46% sales slump in November (Porsche press release)
• UK business secretary Peter Mandelson lobbies GM to build Chevy Volt in UK (Autocar)
• Sales of electric cars in Britain have slumped by 58% in the first ten months. Just 156 were sold and electric car distrubutor Nice Car Company (purveyor of the Aixam Mega) has plunged into administration (CleanGreenCars)
Tuesday 2 December 2008
• Ford publishes details of rescue plan submitted to Congress: it plans to reach profitability by 2011, launch electric cars by 2011 and vows to sell off its corporate jets (Ford press release)
• Indian manufacturing giant Tata has had its credit rating dropped two levels to B1, as it asks members of the Indian public for cash investment (Financial Times)
• CAR understands that the UK car market is likely to be down by 37% in November when new-car registration figures are announced later this week, with private sales – to real buyers – crashing by 45% (CAR Online)
• American car sales are likely to have slumped by 25% last month – the 17th drop in the past year and a half (Automotive News), while sales in Korea and Japan slump by 30% (Financial Times)
• The US Senate Banking Committee bail-out meeting has moved from today to Thursday 4 December; GM, Ford and Chrysler have until today to resubmit their turnaround plans, after the first request was rejected by politicians on 20 November (Automotive News)
• UK car accessories firm Halfords is cutting 250 jobs at its 450 stores and HQ (The Guardian). Yesterday’s announcement at Ford of a strategic review of its Volvo subsidiary was designed to boost the Blue Oval’s chances of winning US state aid (The Guardian)
Monday 1 December 2008
• It’s been rumoured for months, but Ford finally goes public and announces it is looking to sell Volvo to improve its balance sheet (CAR Online)
• Aston Martin to cut 600 jobs from its 1850-strong workforce, as sales stutter (CAR Online)
• UK Government likely to announce motor industry aid ‘within weeks’ after meeting with industry, including Toyota, GM, Nissan, Rolls-Royce, Leyland Trucks and Aston Martin. Sector requests liquidity aid for dealers’ financing arms and bridging loans. Meanwhile, GM Europe appoints Jones Lang LaSalle to arrange sale and leaseback of sites to raise €200 million (Financial Times)
• American auto makers prepare for tomorrow’s deadline to present rescue plans to Congress – after last month’s bid was refused (The Guardian)
Sunday 30 November 2008
• The board of General Motors meets over weekend to discuss how to cut costs ahead of its proposed $12 billion bail-out request (Automotive News)
Friday 28 November 2008
• Jaguar and Land Rover announces 850 IT and engineering staff will be made redundant at the end of the year (Daily Telegraph)
• Britain’s auto industry body the SMMT meets business secretary Lord Mandelson and pleads for £4 billion in rescue funds to keep industry afloat (Daily Mail)
• The same happens in Brussels, as European trade bodies badger EU for £34 billion bailout – it’s estimated that European car sales will dive by 15% in 2009 (The Guardian)
Thursday 27 November 2008
• Porsche admits it lost 15% in revenue over the past four months and condemns General Motors for seeking government bail-out (The Guardian)
• Porsche also announces its withdrawal from the beleaguered Detroit Motor Show along with Ferrari, Land Rover, Rolls Royce, Nissan, Suzuki and Mitsubushi (Financial Times). But ‘Big Three’ are attending, and are some China Brilliance for the first time (CAR Online)
Wednesday 26 November 2008
• Porsche announces factory closures lasting seven days over Christmas; Volkswagen says it will suspend production for three weeks over festive period (Financial Times)
Monday 24 November 2008
• In response to the economic depression, UK chancellor Alasdair Darling cuts VAT to 15%, but fuel duties go up and the AA calls it ‘giving with one hand, taking with the other’ (CAR Online)