By on February 17, 2009

An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Beijing until further notice.

Hell, no, let us go: On Monday, GM’s European labor leaders called for GM to jettison their Opel/Vauxhall brand. According to Reuters, the unions would prefer an independent Opel/Vauxhall, rather than face what they called “potentially fatal cost-cutting.” A statement on the labor force’s website left no doubt that the long knives were out. “The spin-off of Opel/Vauxhall . . . and the spin-off of (Swedish brand) Saab is the only reasonable and feasible option for General Motors which would not destroy the European operations and its European assets and could avoid lawsuits.” German state and central governments appear to be supportive of the plan.

Daimler down: Daimler’s EBITA dropped from €8.7B in 2007 to €2.7B in 2008. Net profit fell from €4B to €1.4B, das Autohaus says. Surprise! The Boys from Stuttgart predict it will be worse in 2009.

Success Insight: Honda’s ultra fuel-efficient hybrid Insight hatchback has barely been on sale for 10 days and it’s already flying out of the door, the Nikkei [sub] says. More that 10k units have been sold, double the company’s monthly sales goal. Price has something to do with it. The base Insight retails for 1,890,000 yen [approximately $20,500 as of 2/17/09], compared with 2,331,000 yen [approximately $25,300 as of 2/17/09] for the base model of Toyota Prius.

Fewer Japanese cars: The eight Japanese passenger-car manufacturers expect to sell a total of 19.4m vehicles worldwide in the current fiscal year through March 31, down 13 percent from the previous year, the Nikkei [sub] reports. Overseas sales are seen falling 17 percent, while domestic Japanese sales are projected to dip 11 percent to 4.29m.

Honda hao: Honda joins the chorus of automakers reporting good January sales in China. Honda Motor said its sales in China in January rose 16.8 percent to 38,022 units from 32,564 units a year earlier, the Nikkei [sub] says. Sales by Guangzhou Honda Automobile Co., Honda’s 50-50 joint venture with Guangzhou Automobile Group Co., rose 29.5 percent.

Ho-HUMMER: Sichuan Auto Industry Group Co, a small automaker in southwestern China, has denied a media report that it is in talks to buy General Motors’ HUMMER brand, Gasgoo reports. Bloomberg reported yesterday that Sichuan Auto was considering a $500M bid for GM’s HUMMER line. “It’s a complete rumor. We have never had discussions with GM, nor are we interested in HUMMER,” said an executive of Sichuan Auto. “We have no energy to consider making bids for foreign companies; we’re too busy running our own business,” said an assistant to the general manager of the company.

Changan at the doors: Chang’an Automobile, the Chinese carmaker that has joint ventures in China with Ford, Mazda and Suzuki, has signed an agreement in Mexico with Grupo Hispanoamericano Autopark for the manufacture and marketing of Changan cars in the region, Gasgoo says. Could come in handy for Changan’s bid for Volvo.

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14 Comments on “While America Slept. Tuesday, February 17th, 2009...”

  • avatar

    “The spin-off of Opel/Vauxhall … and the spin-off of (Swedish brand) Saab is the only reasonable and feasible option for General Motors which would not destroy the European operations and its European assets and could avoid lawsuits,”

    “Moreover, the plan is not viable taking in consideration the needed loans guaranteed by European governments and the existing legally binding contracts on the European and national level.”

    I’m wondering what kind of lawsuits they’re talking about and what kind of contracts exist. And especially how much money GM would have to come up with. If the GM turnaround plan is dependent on its European partners to just forget about existing contracts, well then good luck with that.

    It seems like spinning off Opel is indeed the only option. The only problem is, who’s supposed to buy? Last thing I’ve heard, the conservative and libertarian parties are opposed to the plan of the governments taking over Opel and without those, no such solution is possible, even though the social democrats and the green party are for it.

    Although I’ve also read somewhere, that the conservatives might agree to the federal banks buying Opel.

    And of course our favorite car expert Ferdinand Dudenhöffer also had to say something. He said that the government should have started talks with GM in November about spinning off Opel, but that it’s too late now and that we should just let Opel die.
    Frankly, this must be one of the most stupid things I’ve heard him say in a long time. Either Opel wasn’t worth saving from the beginning or they still are worth saving. But why should it be too late now? Doesn’t make sense at all. Why should the long term prospects of Opel be any worse after a couple more months under GM dominion? Either Opel can survive on its own or it couldn’t have survived even back in November. If it’s the case that Opel can’t survive on its own, then he should be thankful that there weren’t any talks in November.

  • avatar

    Selling Saab is feasible – selling (or spinning off Opel/Vauxall, however you want to phrase it) is not.

    They are totally integrated into GM. GM has changed dramatically over the last several years, has development centers for specific market segments in different regions (I know, most people here will totally deny this, but facts are facts) and has also developed centers of competence for various aspects of vehicles – i.e. suspension controls core development is done in GME (GM Europe for the uninitiated).

  • avatar

    @ anoldbikeguy:

    The work council of Opel wants the split and it has proposed a detailed plan. They also suggested that GM should keep a minority stake in Opel so that the transfer of technology from Europe to America is ensured and no existing contracts would be broken.

    Klaus Franz who represents the Opel workers in Germany said this:
    “There is no ‘keeping on going’ with GM. The only perspective we have is to spin off.”

    In other words: Let my people go.

    Also, the “Westdeutsche Allgemeine Zeitung” reports that there have been negotiations between Opel and GM about a spin off for several weeks now.

  • avatar

    Nobody in his right mind takes anything seriously what Dudenhöffer says. He’s the court jester of the German auto biz.

  • avatar

    Here is the link to the full letter from Klaus Franz.

    Interesting is the opening statement: “The credit approved by the Bush Administration to GM in the US was a kind of poisoned gift to the company. Keeping in line with the requirements is nearly impossible for GM”.

    It goes on:

    “The term sheets (agreement between the US Government and GM) target mainly saving workers costs – including closure of plants and massive layoffs. There are no proposals whatsoever, how the turnover could be increased or new models could be developed. The requirement for GM to repay the loans from 2011/2012 means that no investments into future products can be made, which will be especially important in light of the new regulations of the Obaqma Administration regarding efficient use of resources and the global CO2 challenge.”

    The article goes on and states that the cost savings targeted by GM in the new plan under the name “Renaissance” will not be achievable in Europe, since GM has made written contract for certain plants which would be violated thereby. Such violation would also lead to a cutoff from any governmental guarantees in Europe. Accordingly, the proposal comes to demerge the european operations into a separate unit, where GM could hold a minority share, but where such company would continue to live independently of GM. This should also allow such independent GM Europe to apply for governmental grants here.

  • avatar
    John Horner

    anoldbikeguy: Nothing is impossible. Companies sell and/or spin-off previously highly-integrated parts of their businesses all the time.

    AT&T spun out Lucent.

    HP spun out most of its non-computer and printer related businesses into Agilent.

    Joint development work goes on between un-related parties all the time, that is what contracts are for.

  • avatar

    That’s interesting. Maybe someone should translate the letter and post it on TTAC. I’d volunteer if the makers of this site would think it would be interesting enough.

  • avatar

    tom :
    February 17th, 2009 at 9:18 am

    That’s interesting. Maybe someone should translate the letter and post it on TTAC. I’d volunteer if the makers of this site would think it would be interesting enough.

    After a bit of research, I have now found the English version. Just go to the following page and click on the PDF icon.

  • avatar

    Selling Saab is feasible – selling (or spinning off Opel/Vauxall, however you want to phrase it) is not. They are totally integrated into GM.

    Which way has the majority tech been flowing from Opel/Vauxall? GM’s latest small 4-cyl and DI engines are Opel originated aren’t they, so are most of the small cars?

  • avatar

    I think this letter should be put on the front page as it’s basically a confession by people with inside knowledge of GM, that the company is at the verge of death.

  • avatar

    I agree, and I proposed this yesterday to Robert – but it seems the letter is only of minor interest.

    Well, if giant snake fossils are good enough, then this letter should definitely go up there.

  • avatar

    Unfortunately, selling Saab isn’t terribly feasible either. Saabs are heavily based on Opel platforms and most of the engineering is done by Opel. Besides, who wants to buy Saab, which hasn’t made money in years and has no prospect of being competitive in the marketplace?

    GM might be able to convince the Swedish government to take Saab of its hands, thus providing welfare jobs for Swedish workers. But even that is not a long-term plan for Saab. Eventually even the Swedish government will tire of throwing money into that pit.

  • avatar


    as far as I understand, the idea of the European Works Council is that Opel/Vauxhall and Saab shall be sold together as one European operation. Saab on its own has near to no chance of survival.

  • avatar

    Actually, the way I understood it, they don’t want Saab to tag along. I guess Saab is gone.

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