While America Slept. Thursday, December 18, 2008

A short 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.

Nikkei: GM & Chrysler talking again: The biggest news in Japan today is that “General Motors Corp. and Chrysler LLC have reopened merger talks, as Chrysler owner Cerberus Capital Management LP has signaled its willingness to give away part of its ownership in the auto maker,” the Nikkei (sub) writes. The Tokyo paper assumes that “the renewal of the talks could be a way for Cerberus to show Washington — which is weighing a $14 billion rescue package for the auto industry — that it wants to cooperate in restructuring the industry.” Japan is very worried about any of the D2.8 going out of business, as it would decimate the supplier base of their transplants.

Japan on slim-fast: The Japanese are skinny already, pocha-pocha (chubby,) or even debu-debu (fat,) are a rare sight in the land of sushi. Prepare for even leaner figures, the Nikkei (sub) writes. “The situation is worsening day by day,” Honda President Takeo Fukui said yesterday, “no signs of a recovery are in sight.” In addition to the austerity measures already announced by Honda, there are more: One year delayed are a new factory in Yorii, and a new R&D center in Sakura, originally scheduled to come on-stream in 2010. Honda group firm Yachiyo Industry likewise delayed their new factory in Yokkaichi by slightly more than a year. Nissan said yesterday that it will reduce domestic car output by and additional 78,000 units than previously planned. The Nikkei: “Freshly revised production figures from Honda and Nissan have increased the total planned worldwide output cut by Japanese automakers for fiscal 2008 to slightly more than 2.2 million.”

Japan on saving spree: The financial crisis is prompting Japanese automakers Honda, Toyota, and Nissan to do the prudent thing: rein in spending and build up cash on hand. According to the Nikkei (sub,) Honda announced its (gasp) “first dividend cut since its stock listing,” along with reductions in spending. Nissan already announced that it will trim its dividend payout for the April-September half. It also plans to cut capital investment and R&D expenditures by around 90 billion yen from its original budget for the current fiscal year. Toyota is also expected to lower its annual dividend payout. The yen’s appreciation is creating an additional problem for the automakers. The Nikkei (sub) says that help may be near: “The Japanese government’s top spokesman hinted Thursday at the possibility of an intervention in the currency market to stem the yen’s sharp appreciation against the U.S. dollar to a 13-year high.”

Toyota dodged the S&P bullet, for now: Toyota’s pristine AAA credit rating – better than most governments these days – may get tainted if matters don’t improve soon, the Nikkei (sub) writes, citing comments from the Standard & Poor’s Ratings Service. “While Toyota has maintained a steady growth path in major overseas auto markets over the past few years, and has been the most successful automaker globally, the company is not immune to the weakening state of worldwide auto markets,” Tokyo-based S&P analyst Osamu Kobayashi said in the report. For now, S&P reiterated its AAA long-term and A-1+ short term corporate credit ratings on Toyota, the highest possible rungs on the scale.

Out of a job, out on the street: Japan is preparing for 3.5m temporary workers literally being out on the street soon. A place in company dormitories was part of their contract. Being jobless means being homeless: Temps usually have to vacate their room three days after getting notice. To soften the blow, Toyota has allowed non-regular workers to stay in company dormitories for up to one month after their labor contracts are terminated, and “while they look for new jobs,” the Nikkei (sub) reports. There goes another myth.

Touchdown: Many automakers in China have cut their sales targets for 2008. China’s Dongfeng Nissan hasn’t. As a matter of fact, they already fulfilled their sales goal of 2008 by selling 345,000 vehicles. Nearly 38 percent of which are the very successful Tiida model, Gasgoo reports. Dongfeng Nissan wants to sell an additional 50K units in 2009, all with existing car models. The company has not planned any new car models for next year.

Proton pulls out of deal, gets sued: Malaysia’s Proton pulled out of a deal with their prospective Chinese joint-venture partner, Goldstar Heavy Industrial. “See us in court” said Goldstar. They sued for breach of contract alleging that Proton wanted to form an agreement with another Chinese company, Jinhua Youngman Automobile Manufacturing Co Ltd., with a target of selling 30,000 units of Proton’s GEN.2, rebranded as the EuropeStar in China, Gasgoo reports. Malaysia’s Proton is fabled for its failed joint ventures. A JV with VW went nowhere. So did plans with GM.

No turkey joke: Turkish vehicle maker Ford Otosan will suspend production at two factories for more than three weeks due to slumping demand at home and abroad, Reuters reports. Turkey has turned into a low-cost exporter of vehicles mainly catering to the European Union. The Turkish automotive sector had seen strong growth in recent years, but in November alone vehicle production halved to 59K units. Production of passenger cars fell by 54 percent in November.

Sole searching in China: China’s Foreign Ministry spokesman said he would be watching out for journalists taking off their shoes in news conferences after an Iraqi reporter threw a pair at outgoing U.S. President Bush in Baghdad. “Maybe I need to watch out not just for who is raising their hands but who is taking off their shoes,” said Liu. No such problem in America, as especially motor journalists casn’t afford shoes anymore.