Magna will struggle to keep promises on Opel jobs 4 Jun 2009 The Canadian carparts maker promised to keep Opel s factories open while shifting some of the German carmaker s production to Russia. Opel s Western European sites face a bleak future if Russia ends up as the company's lowcost base.
Interview: Indiana to Obama – what about the law? 4 Jun 2009 Three Indiana pension funds have filed a lawsuit challenging the proposed restructuring of bankrupt US car maker Chrysler. Indiana State Treasurer Richard Mourdock gave his perspective on the politicallycharged situation to Breakingviews.com's Lauren Silva Laughlin.
Hummer drivers don’t eat tofu. Oh, wait… 3 Jun 2009 China provided General Motors with an unlikely buyer for the tanklike vehicle that taste forgot. Heavy machinery maker Tengzhong may actually be a better owner than a rival carmaker and pledges to save US jobs will be welcome. Shame Hummers are everything China needs less of.
Silicon Valley geared up to profit from Detroit’s weakness 3 Jun 2009 A handful of VC firms are placing big bets on the decline of the US auto industry. Given GM s recent bankruptcy, some may pay off sooner than expected. Whether electric cars or simply better parts for existing ones, there s a number of ways VCs can profit.
Peugeot unlikely to rush into Fiat merger 2 Jun 2009 The controlling family of the French car maker has opened the door to an industrial alliance or even a merger. But Peugeot s insistence the company should remain independent, and the family s intention not to be diluted, seem to mean it doesn t have Fiat in mind.
Ford gets bupkis for its financial virtue 1 Jun 2009 By cleaning up its two US rivals Uncle Sam has put Ford at a competitive disadvantage. As the top GM shareholder it s also conflicted. Ford may not need a handout, but there are ways the government can level the playing field.
Don’t blame the credit crunch for GM’s failure 1 Jun 2009 The financing crisis certainly didn t help the carmaker. But the writing was on the wall for years that GM s liabilities would consume its assets. Executives and unions acted too late and too slowly. With luck, pressing the reset button with the help of taxpayers will work.
General Motors bankruptcy: in their own words 1 Jun 2009 The carmaker s executives have been denying the need for bankruptcy for as long as Breakingviews has been advocating it as a way to restructure the troubled carmaker. Herewith, we ve compiled a selection of comments both bullish and bullheaded since late 2005.
GM’s unions get better end of stick, again 29 May 2009 Like the government and unsecured bondholders, the UAW has agreed to take some of what it's owed in the form of equity in a restructured GM. As at Chrysler, they stand a better chance of recovering it than Uncle Sam or creditors. Our calculator shows you how.
Magna holds the chips in dramatic Opel poker game 29 May 2009 The Canadian car parts manufacturer seems to have a provisional deal to buy Opel from GM, blessed by the German government. Fiat had earlier stormed out of talks to acquire GM's nearbankrupt European division. If Fiat's move was a bluff, it seems to have failed.
Can the US ever make its money back on GM? 28 May 2009 It s doubtful. In exchange for more than $50bn of financing, Uncle Sam gets 72.5% of a postbankruptcy GM. For taxpayers to recoup their dollars, the whittleddown carmaker must be worth at least $70bn a value it never even achieved in its heyday.
EU should stick to its guns over Germany and Opel 28 May 2009 The EU, prompted by the UK and Belgium, is calling an urgent meeting on Germany s bailout plans for Opel. The fear that German workers might be favoured is legitimate. But Europe already has regulation to prevent this. The EU should simply say that it won t tolerate rule bending.
GM bondholders shouldn’t be Obama’s latest scapegoats 27 May 2009 The president may blame their final rejection late last night of the carmaker s debtforequity offer for forcing the carmaker into bankruptcy much as he did with Chrysler s lenders. But the administration s union favouritism doomed both offers from the outset.
Fiat still offers best option for GM Europe’s Opel 26 May 2009 German lawmakers deciding on Opel s fate should set aside politics and get real about the auto industry s terminal overcapacity. Sergio Marchionne s proposed threeway merger of FiatChryslerOpel is risky and audacious. But it is also Opel s best chance of longterm survival.
Porsche’s call for help could stay unanswered 20 May 2009 The German sportscar maker is looking for foreign investors to help clean up its balance sheet ahead of a tentative merger with Volkswagen. But it's hard to see what Porsche can sell besides its options to buy 20% more of VW. And Porsche isn't exactly investorfriendly.
Tesla investment gives Daimler sex – and green – appeal 19 May 2009 The German automaker bought a 10% stake in the Silicon Valley startup. Tesla s $110,000 electric sports cars certainly bring some sex appeal to the boring Mercedes maker. But with new CAFE standards taking effect, Tesla s battery technology is the real prize.
Porsche must drink bitter cup of VW retribution 18 May 2009 Volkswagen has suspended talks on its merger with Porsche. The luxury German carmaker owns 51% of its much larger German rival. But Porsche s pushiness has not paid off. It is weakened by debt and German politics. Volkswagen has the means to drive a hard bargain.
Default by Aston Martin owner tests Islamic finance 13 May 2009 Investment Dar, the Kuwaiti firm that bought the luxury carmaker, has suspended payments on its $3.5bn debt. Sharia law provides no precedent for what happens next. Credit Suisse has proposed a restructuring. Dar s creditors might lose badly if they put up too much of a fight.
Credit hedgers not all villains in GM saga 12 May 2009 Some fear hedged bondholders will oppose the US government s deal because they can reap gains on CDS contracts by tipping the carmaker into bankruptcy. But they probably hedged before GM s trouble became acute meaning they re not just opportunistic speculators.
Porsche should come clean on its VW options 12 May 2009 The chairman of Volkswagen wants Porsche to deal with its debt problems before the planned merger of the two German automakers goes ahead. He s right. Porsche is E9bn deep in debt, with some sort of options to buy another 20% of VW. It should disclose the details.