Month: December 2008

Billionaire Merckle Still Without Bridge Loan as Deadline Nears

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Related article: Billionaire Merckle Said to Need as Much as EU1.1 Billion

Dec. 1 (Bloomberg) — Germany’s Merckle family, with less than 24 hours to rescue the VEM Vermoegensverwaltung GmbH investment unit, hasn’t obtained bridge loans that would save the company.

“Negotiations are continuing,” said Doris Feinle, a VEM spokeswoman, by telephone today. She declined to comment on the timing or likelihood of an agreement.

The Merckle family, battered by wrong-way bets on Volkswagen AG shares and plunging stock markets, has until tomorrow to arrange short-term loans after a group of banks signed a so-called standstill agreement blocking them from making claims. A failure may have repercussions for an empire spanning the cement, machinery and pharmaceuticals industries.

Adolf Merckle, 74, the head of the family, won a two-week stay Nov. 20 after giving personal guarantees from his $9.2 billion fortune to the banks to try to get funding, three people familiar with the situation said at the time. VEM lost “low three-digit million euros” on VW stock, and banks demanded more guarantees from the company after shares used as loan collateral declined in value, the investment unit said at the time.

Read moreBillionaire Merckle Still Without Bridge Loan as Deadline Nears

Volvo and Saab ask Sweden for aid

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The Volvo V70

General Motors and Ford Motor have approached Sweden’s government about financial aid for their lossmaking Saab and Volvo brands.

Related article: Ford Says It May Sell Volvo, Its Last European Brand

GM and Ford want to bolster the two marques’ finances in anticipation of selling them as the Detroit carmakers grapple with a cash crunch that threatens their survival.

Stephen Odell, Volvo’s chief executive, and Saab’s managing director Jan-Ake Jonsson have separately spoken to Maud Olofsson, Sweden’s industry minister, and other officials about securing funds, according to several people familiar with the discussions.

Ford and GM will both tell the US Congress they have long-term plans to dispose of the brands this week when they present detailed business and financial plans to support their request for $25bn of emergency funding.

Read moreVolvo and Saab ask Sweden for aid

Ford Says It May Sell Volvo, Its Last European Brand

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The Volvo C70

Dec. 1 (Bloomberg) — Ford Motor Co. said it may sell its Volvo unit, the company’s sole remaining European brand, a day before the automaker is scheduled to present a survival plan to U.S. lawmakers.

The review of options for Volvo was spurred by the worldwide auto decline and probably will take several months, Ford said today in a statement. Shedding the Swedish unit would complete the unwinding of a two-decade strategy of diversifying by buying European luxury brands. Volvo, acquired in 1999 for $6.4 billion, was retained after a similar evaluation last year.

Related article: Volvo and Saab ask Sweden for aid

Ford, General Motors Corp. and Chrysler LLC are to present plans tomorrow demonstrating why they should get $25 billion in U.S. financial aid and that they can be viable businesses. Volvo was once central to a failed strategy by Dearborn, Michigan-based Ford to reap a third of its profits from luxury autos in 2006.

“All of these businesses are being forced to reveal their hand,” said Maryann Keller, an independent auto analyst and consultant in Greenwich, Connecticut, in an interview. “Ford can put Volvo up for sale, but there aren’t going to be any buyers. It may come down to the Swedish government taking it.”

Read moreFord Says It May Sell Volvo, Its Last European Brand

90 Percent of U.S. Infant Formula May Be Contaminated with Melamine

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FDA Abruptly Declares Chemical Safe for Babies

(NaturalNews) Up to 90 percent of the infant formula sold in the United States may be contaminated with trace amounts of melamine, the toxic chemical linked to kidney damage, according to recent tests. The FDA’s test results, which the agency hid from the public and only released after the Associated Press filed a Freedom of Information Act request, showed that Nestle, Mead Johnson and Enfamil infant formula products were all contaminated with melamine.

The AP is also reporting that Abbott Laboratories conducted its own in-house tests that detected trace levels of melamine in its formula products. Together, these infant formula manufacturers make about 90 percent of the infant formula sold in the United States.

Prior to these test results being made public, the FDA had published a document on its website that explained there was no safe level of melamine contamination in infant formula.

Specifically, the FDA stated, “FDA is currently unable to establish any level of melamine and melamine-related compounds in infant formula that does not raise public health concerns.”

Related article: FDA sets safe levels for melamine in baby formula (CNN)

Once tests found melamine in U.S.-made formula products, however, the FDA changed its story. As of today, the FDA has now officially declared melamine to be safe in infant formula as long as the contamination level is less than one part per million (1 ppm).

Astonishingly: The FDA has no new science to justify its abrupt decision declaring melamine to be safe!

Protecting Big Business instead of American babies

Read more90 Percent of U.S. Infant Formula May Be Contaminated with Melamine