Crunch watch: the economic crisis and the auto industry

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 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