Carmaker Ford in the US has reached the point in discussions with Chinese holding company Zhejiang Geely over the sale of Volvo where it looks likely to go ahead, reports Bloomberg. Ford has been trying to get back to focusing on its Ford division by selling off the luxury European brands it took on. Geely is reported by the Detroit Free Press to be offering less than one-third what Ford paid the Swedish automaker for the brand 10 years ago.
Links to other sites: Bloomberg, Detroit Free Press, Zhejiang Geely
Only eight months into the job, Fritz Henderson, CEO of General Motors in Detroit, was asked to leave by the carmaker’s board Tuesday. Chairman Ed Whitacre will take over as interim head of the company while it conducts a search for a new CEO. Whitacre provided few clues about Henderson’s departure to a hastily organized press conference, but made it clear that the board was unhappy about the rate of progress being made in restructuring. The US government is the main shareholder, with a 60 percent stake in GM, but a White House spokesperson said there was no pressure from the government to make the change.
Links to other sites: The Globe & Mail, Canada, Reuters
US President Barack Obama will announce plans for the future of General Motors Monday 1 June in Detroit, Michigan, which will include the federal government owning 60 percent of the company, with $30.1 billion in bankruptcy financing. The Canadian government, which is putting in $9.5 billion, will own 12 percent of the new, smaller carmaker. GM files for Chapter 11 protection 1 June, the largest industrial bankruptcy in US corporate history although, according to the BBC, it is the third largest bankruptcy after Lehman Brothers and WorldCom. Some 20,000 workers could lose their jobs. Bloomberg, CNN, Financial Times
US President Barack Obama is scheduled to announce Tuesday 19 May stricter federal mileage standards that will require a 30 percent reduction in auto emissions by 2016. “The national policy will mimic California’s” standards, which carmakers have been fighting in the courts reports the Los Angeles Times.
The new rules are the result of an agreement reached by the federal government, California and the auto industry. California is currently scheduled to implement its standards this year, which has prompted car industry lawsuits, but under the agreement it will delay until 2012 while the new federal standard would apply countrywide by 2016. In exchange for the delay in California, carmakers have agreed to drop their suits, says the newspaper. Reuters and background, Detroit News
Three and a half years of talks have finally ended, with Porsche and VW agreeing to merge, but with the independence of all 10 brands maintained. Porsche had been trying to take over VW, a move resisted by Lower Saxony, which owns 20 percent of VW, and other shareholder groups. Financial Times
The CEO of Peugeot in Paris, France has been replaced, and the head of General Motors in the US is on his way out the door, as troubled carmakers in Europea and the US seek a new way forward. The Obama administration has told Rick Wagoner of GM that he must leave and Chrysler that it must form a partnership with Italian carmaker Fiat, in what the New York Times says is a “a level of government involvement in business perhaps not seen since the Great Depression.” In France, Philippe Varin of steelmaker Corus is replacing Christian Streiff as CEO of PSA, reports Le Monde (Fre).
The world’s second largest car manufacturer, Toyota, will post a loss when its year ends in March 2009 because of falling sales in North America, it announced. It downgraded its previous estimate for profits of 600 billion yen to a loss of 150 billion ($1.7b). Bloomberg
The US Senate late Thursday dropped its efforts to give the US auto industry a government bailout and the “specter of a financial collapse for General Motors and Chrysler” is looming. The Senate had refused to accept the package passed by the House, insisting that unions accept sharp drops in pay in 2009, but the unions would not agree to the cuts. GM and Chrysler may not have enough money to make it through December. CNN, New York Times Asian stocks, the US dollar and US futures index all tumbled on the news, reports Bloomberg.
General Motors, the automaking industry leader in the US, published an open letter saying it had “disappointed” consumers and that “At times we violated your trust by letting our quality fall below industry standards and our designs became lackluster.” The ad, run in an industry newspaper, is a turn-around for the company, which had previously said the financial crisis was to blame for its need for a major cash injection. The statement comes just as lawmakers in Washington were close to a deal to extend loans to the big three carmakers. DC, Reuters
The big three US automakers (GM, Ford, Chrysler), facing Congress again in a bid to get $34 billion to keep them from bankruptcy, say the request is about more than finances, that US national security is at risk, but “many defense experts say this claim is dubious,” reports NPR.
