Deutschland Unter Alles: Cars Crater
By Bertel SchmittDecember 2, 2008 -
If you go to Germany, as I did today, you won’t see or feel much of a recession. If you read the GMSM (German Main Stream Media - and I had 9 hours of reading the latest editions today while flying in from Beijing) you’ll learn that the jobless rate is contained, that people are buying, that Frau Merkel sees no need for s stimulus package, and that retail is looking for 150,000 temps to help them with the Christmas boom. All divvy in Deutschland?
When you go to a bit less than main stream, you are in for a shock: “German new cars sales down by 18 percent” says Automobilwoche (sub.) Aua! After slowly decreasing over the month, November sales suddenly cratered in Deutschland. It looks more and more like 2008 will be the worst year since 1989. Who was the worst performer in the volume segments? You guessed it: Opel. Down 36 percent. BMW lost 20.8 percent, VW shed 18.6 percent. Horrors! Mini cars went out of style, bigtime: The Smart lost nearly 46 percent. Best performer: Audi with a loss of only 1.1 percent. If you want the official government data in full gory detail, here they are.
Posted in Germany | News Blog | 3 comments 
Der Neue Porsche Cayenne
By Robert FaragoDecember 2, 2008 -
Posted in Germany | New Cars | News Blog | 13 comments
Payback is A Bitch: Hedgies To Sue Porsche For Billions
By Bertel SchmittNovember 29, 2008 -
In a report to appear Monday, the German magazine Der Spiegel will write that “several law firms are compiling material for lawsuits to hold Porsche liable. They are working for hedge funds which had lost billions of Euros.” That’s news to Porsche CFO Holger Härter. He says he hasn’t heard of anybody who wants revenge or restitution. “I don’t even know who might have been hurt.” On Sunday, FAZ will publish an interview with Härter. First question: “When will the hedge fund called Porsche close its sheet metal factory?” Härter’s answer: “Our core business is and remains the automobile.” Everybody knows: not true. Porsche made more profits than sales in the last fiscal year. Of €8.6b in profits, only €1b were generated in that sheet metal factory. €7.6b were generated with derivatives. That was in the last fiscal year, which ended July 31. God, Härter and Wiedeking only know how much the Porsche hedge fund generated in the months thereafter, when the VW stock went wilder than girls at Mardi Gras. Härter now says they didn’t really mean it. Here is Härter’s version:
(more…)
Posted in Crime & Punishment | Germany | High Finance | News Blog | 24 comments
Brussels To Berlin: Drop Your VW-Gesetz, Right Now
By Bertel SchmittNovember 27, 2008 -
Brussels just ratcheted up the thumbscrews they placed on Berlin: “Either drop that VW-Gesetz now, or we’ll see you in Europe’s High Court. You’ve go two months.” Automobilwoche (sub) has the story in German. In case you don’t know: The VW-Gesetz (VW-law) was written to give the state of Lower Saxony veto power. Lower Saxony holds 20.1 percent of Volkswagen. According to German law, a minority shareholder must have 25 percent to exercise veto power. Lower Saxony didn’t want to spend the extra money for the extra shares. A law was passed instead. For a long time, this law was seen as a weapon to ward off foreign raiders and other riff-raff: Who wants to take over a company they can’t boss around? Now, the law bothers two parties:
Posted in Germany | News Blog | no comments
Uh-Oh: Trouble Brewing At Daimler And BMW
By Bertel SchmittNovember 27, 2008 -
Will Daimler and BMW be Germany’s Ford and GM? Germany is worried about its two prides and joys: “Some senior executives already question whether Daimler and BMW will survive the crisis as independent companies,” writes Der Spiegel, translation via Business Week. “And close examination reveals that both companies have significant Achilles heels.”
“The biggest risk for BMW stems from its successes in recent years,” writes Der Spiegel. “BMW has almost doubled its car sales since 1999, and since 2007 the Bavarian carmaker has been the world’s top seller in the premium class.” Now, BMW sits on $25b of car loans and leases, backed by cars with increasingly dubious residual value.
Second risk for BMW: Customers, shame on them, buy the wrong cars. Instead of buying big bore 7 and 5-Series Beemers, as they should, customers suddenly insist on smaller models and lesser engines. BMW’s Munich-based engine factory is caught unprepared. “We are producing the wrong engines,” says Manfred Schoch, the chairman of BMW’s works council. Eight-bangers, even six-cylinder engines are piling up unsold. Daimler is even more distressed.
Posted in Germany | News Blog | 32 comments
Porsche: “VW’s Share Price Is Insane.”
By Bertel SchmittNovember 26, 2008 -
More news coming in from Porsche’s annual numbers press conference. Due to the worldwide recession, our TTAC correspondent in Stuttgart has to moonlight as a security guard at the event, but whatever works. We already announced this morning that Wendy Wiedeking said that “it is becoming increasingly unlikely” (translation: don’t even think it) that Porsche will go for 50 percent this year. Porsche holds 42.6 percent of the common stock of Volkswagen. They also own 31.5 percent of VW in options, but derivatives don’t count in the boardroom. “Wiedeking says their goal is still to build up to a majority of 75 percent in 2009,” our correspondent whispers into his lapel mike. But there are “too many uncertainties.” (Not to mention the VW-law, that makes owning 75 percent utterly wasteful.) Therefore, Wiedeking punts, much to the chagrin of our reporter-cum-rent-a-cop: “Wendy just said there is no telling how many moves will have to be made until the game is over.” He just said that. Wendy thinks, taking over the world’s third largest automaker, Volkswagen, he calls that a game? Where’s the outrage? “What game? Monopoly? Chess? Pick-up sticks?” Wendy won’t say. Maybe later, in the Q&A. Wait, there is more …
Posted in Germany | News Blog | 4 comments
Porsche stops the line
By Bertel SchmittNovember 25, 2008 -
The “bank with a subsidiary that makes cars,” a.k.a. Porsche, had to stop production in their car subsidiary Zuffenhausen for a day. There is less demand for the 911s. The hedge funds strike back and go on buyer strike. Until end of January, 7 additional no-work days are planned, Das Autohaus learned.
2,500 workers are affected. 1,280 fewer 911s will be built. Tomorrow, at the press conference, Porsche will most likely announce that in their 2008/2009 fiscal, they will not reach the 98,652 cars built in the previous fiscal year.
Posted in Germany | News Blog | 9 comments
A Schnitzer for Your Schnauzers
By Robert FaragoNovember 19, 2008 -
Posted in Germany | New Cars | News Blog | Tuners | 12 comments
GM: Opel Not For Sale
By Edward NiedermeyerNovember 19, 2008 -
That was quick. GM is saying nein, danke to SolarWorld’s offer to buy elements of its Opel subsidiary for one billion Euros. “This is pure speculation. Opel is not for sale,” GM Europe spokesman Nelson Silveira tells Automotive News [sub]. Meanwhile Opel is slashing production, and angling for its own federal bailout, courtesy of Berlin. Of course a German bailout of Opel will only happen if GM files for bankruptcy, but then, the same could be said for SolarWorld’s offer. AN notes that SolarWorld “benefited enormously from new energy laws set up by the Social Democrat-Greens government after it took power in 1998,” and it’s clearly aiming to not only acquire Opel up for a song, but to turn around and snag the government money as well. This is what the new economy calls “timing the market and the government,” a technique the firm is clearly riding to success with solar panels. Anyway, auto industry boffins say the offer is a joke, a charge SolarWorld founder and CEO Frank Asbeck firmly denies. Meanwhile, GM is clearly less adept at “timing the government,” or at the very least “charming the government.” With a US bailout looking increasingly less likely, GM may soon lose the luxury of saying no to offers like this one.
Posted in Germany | News Blog | 2 comments
Germany’s SolarWorld springs surprise bid for GM’s Opel
By Edward NiedermeyerNovember 19, 2008 -
AFP is reporting (via Yahoo News) that German Solar Power firm SolarWorld has offered to buy Opel for 1b Euros, in hopes of creating Europe’s “first green automotive group.” The offer consists of 250 million euros in cash and 750 million euros in bank credit facilities for Opel’s four auto factories and a key research centre in Ruesselsheim, western Germany. I know, I know, you’re probably asking yourself if this is some kind of twisted joke. “I could not be more serious,” says SolarWorld boss Frank Asbeck. “We would not make this offer otherwise.” Of course there are still strings attached. For example, SolarWorld wants a liquidity guarantee for Opel from the German government. The deal also would require a complete split of Opel from GM, and compensation payments of 40,000 euros per Opel worker, which would approximately equal the one billion euro purchase price. But, as Global Insight analyst Christopher Stuermer points out, “Adam Opel Germany has total assets of around eight billion euros — SolarWorld’s offer is ridiculous.” The consensus appears to be that this will only happen if GM goes under, in which case the German state of Hesse has already pledged 500m Euros. After watching several hours of House Financial Services Committee hearings, this blogger is as convinced as ever that this is an outcome worth betting on.
Posted in Europe | Germany | News Blog | 4 comments
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