Category: High Finance

By on November 28, 2015


It’s hard not to look at the newly announced Volkswagen Beetle Dune and hear at the same time that Volkswagen will be saving $2 billion by cutting unnecessary trims and variants from their lineup.

I mean, it’s like they’re not even giving the little guy a chance.

Nonetheless, Bloomberg (via Automotive News) reported Friday that Volkswagen will axe trims and variants of its cars to reduce complexity and cost from its lineup to help pay for the company’s massive emissions scandal. Bernd Osterloh, Volkswagen’s labor chief, told journalists Friday that the company has needed to trim some of its fat for a while, apparently.

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By on November 16, 2015


Detroit automakers may be betting high-profit SUVs and trucks are a better fit for their domestic plants as those automakers shift production away from cars to make room for larger, high-margin vehicles.

Ford and Fiat Chrysler Automobiles will largely shift production of their cars to Mexico and bring more trucks and SUVs to North American facilities, according to their contracts with the United Auto Workers,  Automotive News reported.

The report consolidates production planning schedules included in UAW contracts with domestic automakers, which shows automakers’ plans to move some of their cars to Mexico or overseas. Of the Big Three, General Motors will sell the most domestically produced cars in North America, including the Malibu, Impala, Sonic, Bolt and Volt, although the small-car plant recently announced a slowing production schedule. Ford will still produce the Mustang and Fusion at its Flat Rock plant in Michigan.  Read More >

By on November 16, 2015


On Friday, Barclays Plc announced it estimates the near-term costs of Volkswagen’s seemingly ever expanding emissions scandal will be about $27 billion USD (25 billion Euros).

Volkswagen’s automotive group had $29.6 billion in net liquidity at the the end of the third fiscal quarter of this year. About $10.8 billion is allocated to protect the company’s credit ratings. That leaves about $19 billion in cash for the company to work with.

There are fines that will be paid in a number of countries, along with goodwill gestures to owners of affected VW vehicles and incentives needed to sell cars from a tainted brand. Then there will the cost of litigation and any judgments or settlements that come out of those lawsuits.

About the same time as Barclays’ announcement, Automotive News and Bloomberg reported Volkswagen AG will be meeting in Wolfsburg this week with representatives of about a dozen banks to secure as much as $21.5 billion in loans by the end of this year. Those meetings aim to shore up the company’s financing and show the credit markets that VW has enough liquid assets to cover emissions-related costs. Read More >

By on November 13, 2015

Renault Fluence Z.E. and Nissan Leaf Circa 2013

The battle between Nissan and the French government over the former’s voting stake in the Renault-Nissan Alliance continues on.

This month, after temporarily raising its stake to 19.7 percent, the French government cut back its stake to around 15 percent, which is still enough voting power under the Florange Law to block anything it didn’t like from Nissan and its allies during shareholder meetings.

However, second-in-command at Nissan, Chief Competitive Officer Hiroto Saikawa, expressed it wasn’t enough to go back to “the situation of seven months ago,” desiring “a better balance between the two companies,” a source told Reuters.

Instead, Nissan responded to the draw-down with a proposal establishing a “better-balanced” 25-percent/35-percent crossed shareholding, with Nissan finally having a say after 16 years of merely owning a piece of the company which rescued it from death back in 1999.

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By on November 10, 2015

2.0L TDI Customer Goodwill Package

Volkswagen’s Goodwill Program in the U.S., which may cost the company nearly half a billion dollars all told, may be a form of corporate apology that could insulate the automaker from further lawsuits.

Michael Siebecker, a professor of law at the University of Denver, says the company’s gift cards could be a form of “corporate apology” that studies have shown help shield some doctors from medical malpractice lawsuits.

“I believe that this is a type of watered-down apology. They may be saying ‘You must be hurting, here’s a little something to get by.’ I don’t know what exactly they think consumers need right now,” Siebecker said.

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By on November 9, 2015

JLR Halewood - Picture courtesy

Jaguar Land Rover will trim $6.8 billion from its expenses by 2020, in part, because of slowing auto sales in China, Reuters reported.

The automaker will consolidate models to common lines, overhaul its supply chain and build 1 million cars by 2020, according to sources familiar with the plan.

The plan, which is called Leap 4.5 (presumably because the plan cuts £4.5 billion), will also help the automaker afford increasingly difficult emissions standards.

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By on November 9, 2015


Rank-and-file Ford workers may get their first glimpses Monday at a newly proposed contract between the automaker and the United Auto Workers union, the Detroit News reported.

According to the report, Ford workers may be offered a $10,000 signing bonus to approve the contract; a $1,750 annual bonus payout, similar to one in the proposed General Motors contract; a $70,000 early retirement buyout for senior workers; a $9 billion investment plan for Ford factories; and, pay increases for veteran Tier 1 and newer Tier 2 workers.  Read More >

By on November 5, 2015

GM Adds Third Shift, 750 Jobs at Wentzville Assembly

United Auto Workers at General Motors’ Fort Wayne, Indiana facility overwhelmingly agreed to a proposed contract with the automaker that would raise wages and eventually close the gap between veteran workers and employees hired after 2007, Reuters reported.

Workers at the facility, who build full-size trucks for GM, approved the contract by nearly 60 percent. Workers at other GM facilities, including Wentzville, Missouri and Spring Hill, Tennessee, approved the deal by similar margins, paving the way for ultimate approval for the labor contract.

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By on November 3, 2015


Electric car sales in Georgia have halted after that state stopped offering incentives and started charging a $200 annual fee to recoup lost gas tax revenue, the Atlanta Journal-Constitution reported.

New electric vehicle registrations plummeted 89 percent from June to August after the state stopped offering a $5,000 tax break on top of the $7,500 federal incentive. Georgia’s incentive was one of the most generous in the country.

Georgia’s electric purge could portend a future in highly incentivized states, such as California and Colorado, where electric incentives and sales are still relatively strong.

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By on October 31, 2015

01 Volkswagen Jetta

Volkswagen told dealers that it would buy back some of its unsellable, used diesel cars withering on their lots at fixed prices to help dealers cope during the automaker’s growing diesel scandal, Automotive News reported.

The cars that dealers are accepting on trade-in, but can’t sell due to their illegally polluting engines, have sat on lots while the automaker develops its plan to fix 482,000 cars sold in the U.S. with the illegal “defeat device.” Volkswagen has offered a $2,000 “loyalty discount” for any Volkswagen trade-in, including diesel cars.  Read More >

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