While America Slept (WAS) is a morning round-up of the news that happened in other continents and time-zones while America was tossing and turning. From Japan to Jakarta, a network of sleep-deprived TTAC correspondents provides round-the-clock coverage of everything that has wheels. Or that has its wheels coming off. Here are the latest animals in TTAC’s morning zoo.
Ford dumps Mazda. Tormented U.S. automaker Ford Motor Co may announce plans to sell a 20 percent stake in long-time affiliate Mazda Motor Corp as early as today, Japan’s Nikkei business daily (sub) reported as the sun rose in the land of the rising sun. Japanese broadcaster NHK had reported more than a month ago that Ford is looking to severely lighten-up on Mazda. Currently, Ford has a controlling stake of 33.4 percent in the Japanese automaker, but Ford needs the cash.
Sell-off drives up shares: Selling a 20 percent stake will net Ford around $850 million, or more. Mazda’s shares jumped 6.4 percent on the report of Ford’s sell-off. The estranged lovers share vehicle platforms and engineering resources and own several assembly plants together in the United States, Thailand and China. With Ford out of control at Mazda, those plants should receive some Japanese gardening.
Deal done. Later in the Japanese day, Mazda sent out an official release confirming the story. It’s in Japanese, but a usually reliable source (my Japanese wife) says it’s the real McCoy-San. Ford is down to 13 percent. Kawaii!
GM-Europe-VP: “The end may not be near.” Brent Dewar, multipurpose VP for Sales, Marketing, and After-Sales at GM Europe penned an inspirational letter to dealers: “As bad as the current results may sound, we don’t know whether we already have reached the end of the crisis.” Autohaus has a copy. From his bunker in Zurich, Dewar commands his sales forces to “fight to the last sale.”
And that WASn’t all, there’s …
Even Terrorists want GM dead: Meanwhile, the Earth Liberation Front (ELF) has joined 60% of Americans and came to the belated conclusion that “General Motors deserves bankruptcy. Fully aware of America’s dependence on foreign oil and the horrific environmental impact of the Hummer, GM continued producing gas-guzzling, polluting vehicles.” Says so in a statement published in Indymedia.
The ELF has a burning desire to save the planet. On their list of accomplishments: “The $24 million arson attack at Colorado’s Vail Ski Resort in 1998 and a $1 million fire set at a West Covina, CA dealership that damaged over 40 Hummers and SUVs in August 2003. In the last ten years, the ELF has caused over $150 million in damages to environmentally destructive corporations without causing a single injury. Since 2001 the ELF has been considered the top domestic terror threat by the F.B.I.” Terrorists-Against-Bailouts, a dirty (t)ricks campaign?
Volt may get the chair: “Will Detroit’s cash crisis kill the electric car?” A not-so rhetorical question posted by the usually well-informed Reuters. The boys from London are pointing to the factoid that GM dropped plans to make an announcement on the Volt’s battery supplier at the Los Angeles auto show this week. Reuters has that from “people briefed on the automaker’s plans.” They also direct the reader’s interest to Chris Paine, maker of the 2006 documentary “Who Killed the Electric Car?” that chronicled GM’s decision to scrap the Saturn EV1. Paine’s working on a Volt-centered sequel. Last but not least, Reuters thinks GM might not have the money to sustain the Volt’s development.
Nationalize Opel! Germany’s day began with what seems to be the whole nation joining the chant of “set Opel free.” Two leading economists even suggest that the German government should “buy back Opel and temporarily nationalize them,” Automobilwoche (sub) reports. “Why don’t the experts recommend a private investor?” Automobilwoche wonders. No answer.
Angela to kiss Opel workers under the mistletoe: Berlin’s auto-summit with Opel ended in nice words, but nothing more. The morning after, Berlin’s strategy becomes a bit clearer: The bailout will happen before Christmas. “The loan guarantees will be placed under the Christmas tree, so that Opel workers can have worry free holidays,” writes Der Spiegel. Only remaining worry in Berlin: How to prevent Detroit from grabbing the dough? Kurt Beck, Premier of Rhineland Palatinate floats an idea that bears keeping an eye on: The money could go to a company owned by Opel’s workers, which then would take an interest in Opel. A controlling interest, in more ways than one.
F.T. Bailout! Financial Times Germany is running a poll amongst its usually well-heeled readers. “Should the government help Opel?” the pink sheet asks. Currently, the nays have it. 75 percent say “Nein,” only 25 percent say “Ja.”
What credit crunch? The European Investment Bank (EIB), the EU’s lending arm, want to increase loans to Europe’s ailing auto sector as part of a broader financing plan. “The EIB will propose an increase of 20-30 percent, and that corresponds to €10 to €15b,” a bankspokesman said. While you-know-who will get most, some of the Euros are earmarked for noble causes, such as help to small- and-medium-sized businesses, and of course the development of greener cars. The loans have attracted interest from as far as Quatar.
Nissan nixes: Nissan Motor Co said it would cut production in Japan by another 72,000 vehicles over the rest of their fiscal year, which ends March 2009. This on top of a cut of 65,000 vehicles already announced last month. Nissan wants to scale back global production by 200,000 vehicles this year. Effective December 2008, Nissan will introduce non operating days as well as reducing production speeds at its Tochigi and Kyushu plants. Details at Steelguru.
Tata in tatters: Indian auto maker Tata has received a high rating from Citigroup. They just raised their Tata’s risk rating from “medium” to “high.” The bank sees Tata’s slightly mistimed acquisition of Jaguar / Land Rover, and the fact that Tata had to say “ta-ta” to their erstwhile Nano-plant in Singhur as liabilities. More at our steely-eyed buddies at Steelguru.
VeeDub down, but cheered up: Wolfsburg had a bad October. Their worldwide sales dwindled 5.1 percent compared to the same month in the prior year. They spin that as “significantly better than the overall market.” Can we blame them? Single-digit bad is the new terrific. Volkswagen is dead-set on its bullish guidance and predicts a slight plus in sales by the end of the year. German Autohaus has it from DPA.
Holden on hold: Workers employed at GM’s Holden’s plant, down under in Adelaide will lose more work, following the car maker’s decision to schedule another 25 days of production shutdowns, Melbourne’s The Age reports. Holden will make 15,000 fewer cars because of the production slowdown. Holden official Andrea Matthews assured that no jobs were “currently” at risk.
Daewoo-wo-wo-wo: “GM Daewoo, the Korean unit of the biggest American maker, GM, also appears to be in trouble,” writes the Korea Times. Last week, GM Daewoo announced plans of suspending operations at its three Korean plants for about two weeks from Dec. 22. Introduction of some new products have already been delayed by a year.
Duh-Of-The-Day: Today’s DOTD goes to Goldman. Their bright analysts cut Ford’s price target to $2 from $2.50. Reason? “Expect lower 2008 and 2009 earnings due to diminished volume and margins internationally, weaker pricing in North America and additional credit losses at Ford Motor Credit.” Where do I send my resume? Undaunted, Goldman maintains a “neutral rating” on F. Not much more at TheStreet.