First of all let’s take a deep breath…….
GM are going to submit their plans for the future to the US congress today and every news service in the world is writing up its thoughts as to what’s going to happen. One thing I’m not sure of at this point is whether or not the public section of those documents will be made available straight away, or whether we’ll have to wait until the hearings later this week.
I guess we’ll find out soon enough.
I’m going to present those reports here in the order that I find them. No opinions or conflicts with other stories, just a quote and a link. The newest will be at the top. I’ll keep posting them for as long as I’m awake. Keep checking back.
And in case you don’t notice, there’s a definite trend as to what they’re predicting with regard to Saab.
NY Times via the Dallas Morning News:
For the Detroit Three automakers to win over Washington lawmakers in their bid for federal aid, they will have to address a key question in the business plans they present Congress with today.
Just how serious are they about shrinking their vast lineups of brands and models to match the harsh reality of the market?
All told, General Motors, Ford and Chrysler sell 112 car and truck models through 15 brands in the United States.
By contrast, the top three Japanese automakers – Toyota, Honda and Nissan – have roughly half as many choices, with 58 models sold through seven brands.
Shutting down a brand is a complicated, costly effort that requires buying out dealers protected by state franchise laws, as well as scaling back vehicle production.
Shrinking dealer networks may be a key component of the business plans that GM, Ford and Chrysler will present in an effort to show that they have viable, long-term strategies.
GM, for example, has about 6,700 dealers in the United States, compared with 1,200 for Toyota.
A thorny question, for GM in particular, is whether it can cut the number of dealers without incurring huge expenses to buy them out.
Edmunds (not bailout, but relevant, covering incentives in November):
Comparing all brands, in November MINI spent the least at $79 followed by Scion at $195 per vehicle sold. At the other end of the spectrum, Infiniti spent the most, $5,015, followed by SAAB at $4,860 per vehicle sold. Relative to their vehicle prices, Mercury and Kia spent the most, 15.4 percent and 13.9 percent of sticker price, respectively; while MINI spent just 0.4 and Scion spent 1.2 percent.
EnG here….From CNN:
Local United Auto Workers leaders from across the country will hold an emergency meeting in Detroit on Wednesday to discuss concessions the union could make to help auto companies get government loans.
UAW leaders called the meeting Monday night in an e-mail, obtained by The Associated Press, to local union presidents and bargaining chairmen.
Presidents from union locals for General Motors Corp., Ford Motor Co. and Chrysler LLC will attend the meeting, according to the e-mail. A separate meeting for GM union officials will follow.
“Lots of auto firms have been selling the wrong kinds of cars,” Swedish Prime Minister Frederik Reinfeldt said last week. “When someone thinks the state should come in and fix the situation, then I think they’re crazy.”
Shanghai Automotive Industry Corporation (Group) (SAIC) was reported to participate in the merger with General Motors (GM), which is on the verge of bankruptcy now, but the Chinese automaker gave a denial immediately…..
….experts forecasted that GM was likely to sell part of its assets in the near future, attracting several Chinese peers.
Wall St Journal:
…..vehicle sales in November are expected to come in at an annualized pace of just shy of 11 million vehicles, according to Barclays Capital, a slight improvement from October’s depressed rate of 10.6 million. That rate would be five million vehicles below the year-ago seasonally adjusted annualized rate of 16.1 million. All auto makers, including even normally recession-resistant luxury brands such as Mercedes-Benz and BMW AG, are expected to post big declines, with the Detroit three suffering drops of 30% or more, according to analyst estimates.
The dire news, however, could help the Big Three make their case in Washington for federal aid. Big declines for stronger rivals like BMW, Toyota Motor Corp. and Honda Motor Co. would support Detroit’s argument that the financial crisis is a major cause of trouble across the auto industry, and that GM, Ford and Chrysler just need a “bridge loan” to help them hang on until the economy improves.
…..judges cannot make workers accept lower wages and they cannot order customers into the showroom. A GM bankruptcy could drag down hundreds of suppliers and redouble existing worries about whether warranties will be honored.
GM’s crisis is so dire that the company might well be able to achieve significant concessions without having to file for bankruptcy. This assumes, however, that management sheds its business-as-usual mentality.
Globe and Mail:
The most radical surgery is expected at GM, analysts said yesterday. It could include the end of the line for Pontiac, Saab and perhaps Saturn.
One industry observer suggested that Saab is almost certain to go, given that its sales are poor and it is not a core GM brand.
Pushed by the same market forces, the car companies tend to move in a pack. Ford and GM bulked up on acquisitions in the late 1980s and early 1990s, and now they’re shedding those acquisitions. With GM fighting for its life, can it afford to keep hanging onto Saab for a rainy day?
The Straits Times:
STOCKHOLM – THE Swedish government has ruled out a takeover of the country’s beleaguered automaker Volvo Cars if its owner, US group Ford, decides to sell it, daily Dagens Nyheter reported on Tuesday.
‘It’s not in our industrial policy to own carmakers and we will not jeopardise taxpayers’ money,’ Enterprise and Energy Minister Maud Olofsson told Sweden’s newspaper of reference on the sidelines of a meeting in Brussels.
The centre-right government has on the contrary pursued a policy of selling state assets since it came to power in 2006.
‘We need to look at what the government can do without jeopardising taxpayers’ money,’ she added.
Among possible buyers seen for Volvo are Germany’s BMW and France’s Renault.
‘But selling car companies in the midst of this financial crisis is hard,’ Ms Olofsson acknowledged.
Prime Minister Fredrik Reinfeldt recalled that Volvo and Sweden’s other carmaker Saab, owned by General Motors, have appealed to the government for various forms of state aid.
‘We are not an emergency bank where companies can get money when things take a turn for the worse. That would just be a misappropriation of taxpayers’ money,’ he told Dagens Nyheter.
GM will outline efforts to negotiate swapping some of the company’s debt for equity stakes in the automaker, either shares or warrants for them, said two people briefed on the company’s plan.
With eight separate brands, GM will also discuss efforts to shed brands but it would prefer to sell them instead of shutting down Pontiac, Saturn or Saab, said one of the people briefed on the plan. Killing off brands, like GM did with Oldsmobile in 2004, would require cash the company doesn’t have, the person said. The people briefed on GM’s preparations didn’t want to be identified because the plan hadn’t been completed.
Financial Post (Canada):
FordMotorCo. and GeneralMotors Corp. could dump their Swedish brands as the Detroit companies press U. S. and Canadian lawmakers for emergency aid that may hinge on keeping jobs in North America.
Ford said yesterday it is weighing whether to sell Volvo Cars, its Swedish luxury unit. A person close to GM confirmed the company is reviewing whether to sell or drop at least three brands, including Saab Automobile AB.
Los Angeles Times:
But saying a brand is for sale and actually selling it are two different things, said Robert Schulz, an auto industry analyst for Standard & Poor’s. With lending for corporate acquisitions all but frozen, there may be few takers for even a prestige marque such as Volvo.
“There’s no obvious candidate to offload these assets to,” Schulz said.
The business plans GM, Ford and Chrysler have prepared for Congress include seeking additional givebacks from the UAW as one way to cut costs, according to sources with knowledge of the plans.
A person familiar with one automaker’s plan said a variety of topics are being explored. Key issues include reopening the contract, eliminating the controversial jobs bank that still pays workers even when they are laid off, and how much and how quickly the automakers will contribute to a trust fund to be run by the UAW that will take over responsibility for retiree health care beginning in 2010.
GM is trying to work out a sale of Saab, BusinessWeek has learned. For several months, GM has been shopping the brand to Chinese, Indian, and Russian carmakers, as well as to the Swedish government, sources familiar with the talks said. Saab Managing Director Jan Ake Jonsson and GM-Europe President Carl-Peter Forster have been leading the efforts to find a buyer, or at least get someone to take the company off GM’s hands.
In GM’s case, the Detroit-based automaker needs to shed brands including Buick, Pontiac, Saab and Saturn as it no longer can afford to keep developing products for each, Noble said. People familiar with GM’s plans said the automaker has studied shedding Saab, Saturn and Pontiac. Hummer is already for sale.