Cars

Honda shuts UK factory for four months

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Honda Jazz
Honda has stressed its commitment to retaining its Swindon workforce until the autumn when a new Jazz model is due to go into production. Photograph: Garry Weaser/Guardian

Japanese carmaker Honda will shut its British factory for four months this evening, after a slump in sales.

Production at the plant in Swindon, Wiltshire, will be halted at the end of today’s shift until 1 June.

The 4,200 workers will receive full basic pay for the first two months, falling to 60% for the rest of the shutdown.

Read moreHonda shuts UK factory for four months

Global Economic Crisis Accelerating

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– Obama administration considers launch of ‘bad bank’ (Telegraph)

– US Initial Jobless Claims Match Highest Since ’82 (Bloomberg)

– Barack Obama inauguration: this Emperor has no clothes, it will all end in tears (Telegraph)

– Despite billions, banks still teeter on the brink (MSNBC)

– Microsoft to shed 5,000 jobs (Financial Times)

– Intel to Cut at Least 5000 Jobs (New York Times)

– GM Gets $5.4 Billion Loan Installment From Federal Government (CNNMoney)

– US jobless claims surge, housing start tumble (Forbes)

– Housing Starts, Permits in US Slump to Record Low (Bloomberg)

– Banks Foreclose on Builders With Perfect Records (New York Times)

– Jim Rogers: Now it’s time to emigrate, says investment guru (Independent)

– Saudi prince’s firm loses $8.3B in 4Q (AP)

– Investors flee after brutal losses at global markets (Emirates Business)

– Indians Flee Dubai as Dreams Crash – Fall out of Economic Crisis (Daijiworld):
It’s the great escape by Indians who’ve hit the dead-end in Dubai.

– China growth slows, Bank of Japan sees deflation (Forbes):
(Reuters) – China’s economy slowed sharply in the fourth quarter and Japan’s central bank on Thursday predicted two years of deflation as Asia’s largest economies buckle under the strain of the financial crisis.

– Roubini Sees China Recession Despite ‘Massaged’ GDP (Bloomberg)

– Asian economic woe grows as China slows and Japanese exports plunge (Telegraph):
China’s economy may have ground to a halt entirely between the third and fourth quarters of last year and Japanese exports plunged 35pc in December, underlining the scale of the slowdown in Asia.

– ZIMBABWE: Inflation at 6.5 quindecillion novemdecillion percent (IRIN)

– Sony forecasts $2.9bn operating loss (Financial Times)

– Hedge funds’ $400bn withdrawals hit (Financial Times)

– Google income drops 68% on one-time charges (IHT)

– Is Britain facing bankruptcy? (Guardian)

– Manufacturing outlook plummets (Financial Times)

– Car production plummets as pressure for industry bail-out grows (Telegraph)

– London’s Evening Standard sold to ex-KGB agent (Reuters)

– AIG starts $20bn auction of Asian unit (Financial Times):
AIG, the stricken insurance giant, on Wednesday kicked off the sale of its Asian life assurance unit – one of its most prized assets – in the hope of raising up to $20bn to help repay the $60bn US government loan that is keeping the group alive.

– UBS to Cut Securities Jobs, Close More Debt Units (Bloomberg)

– Japanese Housewives Desperate After Currency Scheme Collapses (Bloomberg)

– New age of rebellion and riot stalks Europe (Times Online)

– Increase in burglaries shows effect of recession (Guardian)

– Chinese media issues stinging attack on Barack Obama and George W Bush (Telegraph)

– Barclays may lose control to Gulf investors (Telegraph)

– Cars to be crushed in insurance crackdown (Scotsman)

– Investors say jailed pilot swiped money for years (Washington Post)

– Capital One Reports $1.42 Billion Loss on Charges (Bloomberg)

– Nokia reports sharp fall in profits (Financial Times)

China bails out steelmakers and car industry

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The Chinese government has announced a rescue package for its car makers and its steel industry in order to revive the faltering powerhouses of its economy.

Sales tax on all cars with engines below 1.6 litres will be halved to 5pc and 5 billion renminbi (£500m) will be set aside as incentives for rural families to trade in their old cars for new low-emission vehicles.

The government will also give the almost entirely state-run Chinese car industry 10 billion rmb to develop “alternative fuel vehicles” over the next three years. There was no mention of an earlier proposal to force the Chinese government to give up its Audi saloons for domestic motors.

Read moreChina bails out steelmakers and car industry

General Motors and Chrysler to ask US for more funds

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General Motors and Chrysler are to call upon the US government for billions more in extra funding as President-elect Barack Obama asks the US Congress to release the second half of the $700bn (£471bn) bail-out fund.

Chrysler badge - General Motors and Chrysler to ask US for more funds
Chrysler, along with General Motors, has already received $17.4bn from the US government Photo: Getty

The two companies, who were granted $17.4bn from the US Treasury’s $700bn Troubled Assets Relief Programme (TARP) in December, are working to achieve further funds in order to carry out comprehensive restructurings of their ailing businesses.

GM chairman and chief executive Rick Wagoner said at the North American International Motor Show in Detroit that the $13.4bn his company should receive in full by mid-February will be enough to see it through to the end of March, but wouldn’t comment on what the next move might be.

But GM president Fritz Henderson stressed yesterday that the baseline plan submitted to Congress in December called for a total of $18bn under the worst-case scenario envisaged for the US auto industry.

“We’ll develop our plan … then we’ll present it. We’ll make judgments from there,” he said ahead of GM’s press conference at the motor show. “It was pretty clear that the requirements were beyond, at that point, $12bn for a continued downside scenario.”

Meanwhile Chrysler is already in talks with the Treasury over further funding, seeking $3bn in additional government aid for its finance arm, with sources suggesting a second cash infusion on top of the $4bn received in December could be complete by the end of this week. “We are making good progress to qualify for a total of $7bn, which puts us in a really good financial position,” Chrysler vice-chairman Jim Press said.

The cash calls from Detroit came as President-elect Obama asked President George W Bush to ask Congress to free-up the remaining $350bn of the TARP allocation.

Read moreGeneral Motors and Chrysler to ask US for more funds

Toyota to Halt Japan Output for 11 Days as Sales Drop

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“We don’t know how much further the global economy will slide,” Toyota President Katsuaki Watanabe told reporters in Tokyo yesterday. “Car demand is falling from leading countries to emerging markets.”

Jan. 6 (Bloomberg) — Toyota Motor Corp., Japan’s largest automaker, will suspend some domestic production for 11 days in February and March, as the global recession saps car demand.

Related article and video:
– Toyota Hits The Brakes (Forbes)
– California’s Car Crisis (BBC)

Output at 12 domestic factories will be halted, company spokesman Hideaki Homma said today by phone, confirming an earlier NHK television report. The cut may reduce Toyota’s production by about 200,000 units, according to Koji Endo, an analyst at Credit Suisse Securities (Japan) Ltd.

Toyota, which expects its first operating loss in 71 years, is cutting production, as its sales last month plunged 37 percent in the U.S. and 18 percent in Japan. The company last month cut its sales forecast by 8.5 percent to 7.54 million vehicles for the year ending March 31.

“The company has no other choice but to widen production cuts, should sales keep falling further,” said Endo, who has an “underperform” rating on the stock. “Toyota needs to reduce inventory.”

Read moreToyota to Halt Japan Output for 11 Days as Sales Drop

GM’s 2008 U.S. Sales Dive to 49-Year Low

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Jan. 5 (Bloomberg) — General Motors Corp.’s U.S. sales plunged to a 49-year low in 2008, dragged down by a 31 percent slide in December as demand was ravaged by the recession and concern that the biggest domestic automaker might collapse.

Toyota Motor Corp.’s U.S. deliveries plummeted 37 percent last month, while Honda Motor Co. slipped 35 percent, Ford Motor Co. fell 32 percent and Nissan Motor Co. was down 31 percent, pointing toward the industry’s worst annual volume since 1992. Chrysler LLC dived 53 percent.

Related articles:
– Auto sales plunge again in December (CNN)
– Bleak US sales in December cap a grim year for automaker (IHT)
– US Auto Sales Plunge Whopping 36 Percent in Dec. (AP)

The federal rescue of GM and Chrysler couldn’t overcome buyer pessimism and tight credit in the world’s biggest auto market. Ford’s 2008 U.S. sales sagged to a 47-year low, while GM’s total of 2.95 million light vehicles was the least since 1959, according to trade publication Automotive News.

“It’s one of the worst years ever, and this year will be worse,” said Stephanie Brinley, an analyst at consulting firm AutoPacific Inc. in Southfield, Michigan. “It’s not a gas problem. It’s not a credit problem. It’s a consumer confidence problem, and it’s worldwide.”

GM and Chrysler received commitments last month for as much as $17.4 billion in U.S. loans, saying they would have run short of operating cash by this month.

GM’s results last month beat the average estimate of a 41 percent drop among six analysts surveyed by Bloomberg News. Tempering the decline was a 43 percent surge in deliveries of the Chevrolet Malibu sedan. Sales of GM’s Saab brand, which the Detroit-based automaker says it may sell, fell 57 percent.

U.S. Market Share

Thanks to bigger declines throughout 2008, the U.S. automakers will likely mark the first calendar year where their combined market share was less than 50 percent, based on results through November, when they held 47 percent.

The drop in full-year U.S. sales for Toyota and Honda were the first for the Japanese automakers since 1995 and 1993, respectively.

Toyota failed to get a boost from no-interest loans offered on most of its models since Oct. 2. Sales of its Prius hybrid, the best-selling gasoline-electric car in the U.S., declined 45 percent. The Tundra full-size pickup dropped 52 percent, while Toyota’s Lexus luxury brand finished the month down 32 percent.

Industrywide Decline

Industrywide U.S. sales extended a streak of declines of at least 25 percent dating to September. Vehicle sales for the year likely will total slightly more than 13 million, based on estimates from a Bloomberg News survey of 22 analysts and economists.

While that annual total would be the lowest in 16 years, it doesn’t reflect the steepening slide in U.S. auto demand.

Last month’s seasonally adjusted annual sales rate probably was 10 million, a 39 percent decline, based on the Bloomberg survey. The November rate was 10.2 million, and annual sales for all of 2007 were 16.1 million.

“We are at the bottom now,” said Tom Libby, an automotive analyst at consumer-research firm J.D. Power & Associates in Troy, Michigan. “People have just stopped buying and I don’t blame them. When you have such a decline in savings and net worth, it just doesn’t surprise me sales have fallen so much.”

Sales of Daimler AG’s Mercedes-Benz and Smart minicar fell 24 percent in December. Volkswagen AG was down 14 percent, while its Audi unit was off 9.3 percent. Bayerische Motoren Werke AG’s sales of BMW- and Mini-brand autos fell 36 percent.

Weak Economy

U.S. jobless rolls reached a 26-year high in the week ended Dec. 20, signaling a worsening labor market as the economy heads into the second year of a recession. That weakness adds to the strain on automakers after record fuel prices in 2008’s first half damped demand for full-size pickups and sport-utility vehicles.

President-elect Barack Obama has made an economic stimulus package his top priority, and he told reporters today in Washington that the nation faces an “extraordinary challenge” in reviving growth.

“The sooner stimulus efforts find their way to where they’ll do the most good — into the hands of consumers — the sooner we’ll see a turnaround in confidence levels and a return of buyers to the marketplace,” Jim Lentz, president of Toyota’s U.S. sales unit, said in a statement today.

December’s plunge may have been eased by the resumption of low-cost financing from GM last week, auto-research firm Edmunds.com said, citing a surge in vehicle inquiries on its site and dealer surveys.

Ford’s U.S. sales were “strong” in the last two weeks of December, Executive Vice President Mark Fields told reporters today in Dearborn, Michigan, where the automaker is based. Ford discounted its remaining F-150 pickups from the 2008 model year after a redesigned version debuted in October.

GM, Chrysler Rescue

Consumer concern that Detroit-based GM and Auburn Hills, Michigan-based Chrysler would fail to get government aid and be forced into bankruptcy may have contributed to December’s slump, Patrick Archambault, a Goldman, Sachs & Co. analyst based in New York, said in a Dec. 28 research note.

President George W. Bush announced Dec. 19 that GM and Chrysler would get the emergency loans in exchange for restructuring their businesses. GM had said it might run out of operating funds by the end of 2008, while Chrysler had said it might fall short by the middle of this month.

GM had resisted demands by some U.S. lawmakers that it file for bankruptcy instead of pursuing federal loans, saying buyers wouldn’t trust a car company under court protection.

To contact the reporters on this story: Mike Ramsey in Southfield, Michigan, at [email protected]; Alan Ohnsman in Los Angeles at [email protected]

Last Updated: January 5, 2009 15:22 EST
By Mike Ramsey and Alan Ohnsman

Source: Bloomberg

Japan’s Industrial Output Falls 8.1% as Exports Drop by Record

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Nissan Motor Co. employees assemble vehicles at the company’s Kyushu Plant in Kanda Town, Fukuoka Prefecture, Japan, on Nov. 23, 2007. Photographer: Robert Gilhooly/Bloomberg News

Dec. 26 (Bloomberg) — Japan’s industrial production fell the most in at least five years in November after exports dropped by a record.

Factory output tumbled 8.1 percent from October, when it dropped 3.1 percent, the Trade Ministry said today in Tokyo. The median estimate of 36 economists surveyed by Bloomberg News was for a 6.8 percent decline.

Plunging demand for cars and electronics is prompting companies to pare output, jobs and investment. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., Japan’s three largest carmakers, cut global production in November and chipmaker Renesas Technology Corp. yesterday said it would eliminate all of its 1,000 temporary workers.

“The recession is showing signs of growing longer and more severe,” said Tetsufumi Yamakawa, chief Japan economist at Goldman Sachs Group Inc. in London. “Production is showing stronger signs of a correction in conjunction with a slump in demand in Japan and abroad.”

Read moreJapan’s Industrial Output Falls 8.1% as Exports Drop by Record

GMAC Becomes a Bank as Fed Bolsters Plan to Save GM

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“These guys should be in Chapter 11,” said Julian Mann, a mortgage- and asset-backed bond manager at First Pacific Advisors LLC in Los Angeles, referring to the U.S. bankruptcy code. Mann’s firm oversees $9 billion. “We’ve now gotten into the business of discouraging prudence and encouraging risky behavior and irresponsibility.”


A GMAC Real Estate sign, attached to a sign advertising 0% down financing, is posted in the front yard of a home in Norcross, Georgia, on Sept. 12, 2007. Photographer: Chris Rank/ Bloomberg News

Dec. 25 (Bloomberg) — GMAC LLC won Federal Reserve approval to become a bank holding company, a switch that may enable the money-losing auto and home lender to tap U.S. financial bailout programs and help keep General Motors Corp. in business.

The Fed used emergency powers yesterday to grant Detroit- based GMAC’s request, citing turmoil in financial markets and the potential impact on GM, the biggest U.S. automaker, which has warned it’s running out of cash. GM and Cerberus Capital Management LP, GMAC’s majority owner, will give up control of the lender to comply with federal rules on who can own banks.

Saving GMAC is a step toward salvaging GM, which received a temporary bailout earlier this month. The $9.4 billion loan will sustain GM at least until January, when President-elect Barack Obama must find a more permanent way to save millions of auto industry jobs and avoid deepening the year-old recession. Dealers and analysts say a GM rescue is more likely to work if GMAC is still around to make car loans, which the Fed’s action ensures.

Read moreGMAC Becomes a Bank as Fed Bolsters Plan to Save GM

Japan auto production marks worst drop since compiling such data began in 1967

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TOKYO (AP) — Japan’s production of cars, trucks and buses marked its steepest drop in at least four decades in November, an industry group said Thursday, as the fallout from the U.S. slowdown crimped auto demand.

Vehicle production in Japan, home to Toyota Motor Corp. and other major automakers, plunged 20.4 percent in November compared to the same month a year ago to 854,171 vehicles, the Japan Automobile Manufacturers Association said.

That marked the second straight month of on-year declines and the percentage slide was the biggest since the group began compiling such data in 1967, it said.

Read moreJapan auto production marks worst drop since compiling such data began in 1967

Bush Gives Emergency Loans to Automakers: A $17.4 Billion, 3-Month Lifeline

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WASHINGTON – President Bush agreed to an emergency bailout of General Motors and Chrysler, giving them a few months to get their businesses in order, but left to President-elect Barack Obama the difficult political decision of ruling on their progress.


The president’s plan gives carmakers until March 31 to restructure.
Doug Mills/The New York Times

The plan pumps $13.4 billion by mid-January into the companies from the fund that Congress authorized to rescue the financial industry. But the two companies have until March 31 to produce a plan for long-term profitability, including concessions from unions, creditors, suppliers and dealers.

The bailout plan sets “targets” rather than concrete requirements about what those concessions may be, meaning that Mr. Obama and his advisers have enormous latitude to decide how to define long-term viability.

Read moreBush Gives Emergency Loans to Automakers: A $17.4 Billion, 3-Month Lifeline

Stocks Jump, Then Slide Back, After Auto Bailout

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A huge bailout for Detroit was barely able to budge Wall Street on Friday.

Stock markets surged in early trading after President Bush announced plans to extend $13.4 billion in emergency loans to the troubled automakers General Motors and Chrysler. But Wall Street’s reaction cooled, the morning’s early gains eroded, and markets ended mixed.

Read moreStocks Jump, Then Slide Back, After Auto Bailout

Honda Falls After Slashing Earnings Forecast by 62%

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Takeo Fukui, president of Honda Motor Co., speaks during a news conference in Tokyo on Nov. 17, 2008. Photographer: Tomohiro Ohsumi/Bloomberg News

Dec. 18 (Bloomberg) — Honda Motor Co., Japan’s second- largest automaker, fell 3.5 percent after cutting its profit goal as the yen rose to a 13-year high against the dollar and sales in North America and Europe dropped.

Honda declined 66 yen to 1,825 yen at the 3 p.m. close on the Tokyo Stock Exchange. Toyota Motor Corp., the country’s largest automaker, fell 2.3 percent, while Nissan Motor Co., the No. 3 carmaker in Japan, added 0.7 percent.

Honda cut its full-year forecast 62 percent yesterday as the global recession cripples sales in the U.S., Japan and Europe. The yen’s 28 percent gain against the dollar and 31 percent rise against the euro this year has hammered Honda’s profit, forcing it to cut jobs, lower management pay and withdraw from Formula One motor racing.

Read moreHonda Falls After Slashing Earnings Forecast by 62%

Emergency rescue plan for British motor industry

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The Vauxhall factory at Ellesmere Port, Cheshire, yesterday. The struggling company has offered all 4,500 workers at the plant a sabbatical of up to nine months on 30 per cent pay

A financial rescue package for Britain’s motor industry was being put together last night, mirroring efforts in Washington to save America’s three big carmakers from collapse.

Lord Mandelson, the Business Secretary, and Alistair Darling, the Chancellor, may offer bridging loans on commercial terms to vehicle and component manufacturers and wider guarantees for loans from banks.

The peer is in regular contact with the industry, which has reached a crisis point. Several carmakers plan extended shutdowns over Christmas, leaving them with vastly reduced sales income but with salaries and other bills still to pay.

Suppliers, many of them small companies, are demanding weekly payments to secure their cashflows and stay in business. One firm, Wagon, has gone into administration with the loss of 500 jobs. If the supply chain crumbles, tens of thousands of jobs will be lost. The components industry supports 115,000 workers, while manufacturing employs 190,000 and the whole industry, including retail, 850,000.

Read moreEmergency rescue plan for British motor industry

General Motors to Idle Most Plants for About a Month

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Related article: GM Encouraged By White House Considering TARP, Rescue Options

DETROIT – The General Motors Corporation said Friday that it would idle all of its assembly plants in the United States and Canada for at least part of the first quarter and build 250,000 fewer cars and trucks than it had planned.

At G.M., many plants will close for about a month in one of the broadest shutdowns in the automaker’s history. The closures will occur at various times during the quarter, though some will extend the annual Christmas holiday through January.

G.M. now expects to build about 60 percent fewer vehicles in the first quarter, compared with the 885,000 it made in the same period of 2008.

“Every plant in North America has some type of action related to it,” a G.M. spokesman, Tony Sapienza, said. “This is an utter collapse of the market, and it’s not specific to G.M. or to U.S. automakers. People just aren’t buying cars right now.”

But G.M., which has warned that it may run out of money unless it can borrow about $10 billion from the federal government this month, has suffered more than most of its rivals. G.M.’s sales were down 43 percent in October and November, compared with a 34 percent decline for the industry over all.

Read moreGeneral Motors to Idle Most Plants for About a Month

German car downturn worst ever

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The trade body warns that car production will have to be cut

The downturn in the German car market is “at a pace and magnitude that has never happened before”, the country’s main auto trade body has warned.

As a result, the German Association of the Automotive Industry said new car sales in 2009 are expected to be the worst since reunification in 1990.

It added that Volkswagen, Daimler and Porsche will all have to cut output, which will “impact” on workers.

Last week Porsche delayed its takeover of Volkswagen, blaming falling sales.

Porsche said there were signs of a “serious slump” in global demand.

Challenging

Volkswagen itself has warned that the current sales environment is “difficult”, while Daimler, owner of Mercedes-Benz, said the situation is “very challenging indeed”.

German car sales are expected to slip to 2.9 million next year, down from the expected 3.1 million for 2008, says the trade body.

Car sales are also lower across Europe, with Italy’s Fiat warning that its 2009 profits could fall by 65%.

Read moreGerman car downturn worst ever

Peter Schiff Was Right 2006 – 2007 (2nd Edition)

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Peter Schiff will also be right on Inflation and Gold.

The dollar is not strong because it is ‘the reserve currency’, it is strong because of all the liquidation going on and people are just sitting on cash waiting for better times to come.

What we see now is not deflation, it is the force of liquidation. M3 is over 18%! We will see inflation, even hyperinflation in the US.

Peter Schiff and Ron Paul will be so damn right about the economy.

Today UN economists warn that dollar is in for a hard landing next year:
“The current strength of the dollar is temporary and the US currency risks a hard landing in 2009, according to a team of United Nations economists who foresaw a year ago that a US downturn would bring the global economy to a near standstill.”
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2. November 2008

Source: YouTube

German carmakers: Sales collapse

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Car sales in the US collapse:

November Auto Sales: Porsche sales drop by half (Source: Forbes)

November Auto Sales: Daimler AG’s sales decline (Source: Forbes):
Total sales at Daimler’s U.S. operations fell 29.9 percent to 15,991 from 22,819 in November 2007
Sales of Mercedes-Benz brand vehicles last month declined 38.2 percent to 14,102 while the company sold 1,889 of its two-seater Smart models. Smart was introduced to the North American market in mid-January of this year.
Mercedes-Benz USA said its best-selling model family, the C-Class, had a 36.1 percent drop-off in sales, and E-Class sales fell by 49.3 percent.

November Auto Sales: BMW sales fall 26.8 percent (Source: Forbes)

Volkswagen November U.S. Sales Fall 19% on Economy (Source: Bloomberg)

Audi U.S. November sales fall 25.4% (Source: Market Watch)
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Berlin under fire as German car sales collapse

German car sales have plunged to the lowest level since reunification almost twenty years ago, increasing pressure on Chancellor Angela Merkel to abandon budget restraint and back plans for an EU-wide rescue package.

Registrations fell 18pc in November, led by a drop of 36pc in Opel sales. “The crisis has again worsened dramatically,” said Volker Lange, of the VDIK motor vehicle association.

Volkswagen is to suspend production at its Wolfsburg headquarters this month. BMW has cut output in Leipsig to one day a week and Porsche is shuttering its Stuttgart plant for a week. It is just as bad in France where PSA Peugeot Citroen is halting production for a month at Sochaux, the country’s biggest industrial site.

The slump in Germany’s core industry has led to vocal criticism of the Left-Right coalition government. The Handelsbatt newspaper warned this week that the coalition faces a “rebellion” unless it faces up to the gravity of the crisis.

Read moreGerman carmakers: Sales collapse

GM, Chrysler Seek $11 Billion Just to Avert 2008 Collapse

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The ‘USSA’ will bailout almost everything until the USS Titanic sinks.
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A U.S. flag flies outside the headquarters of General Motors Corp. in Detroit, Michigan, Oct. 17, 2008. Photographer: Gary Malerba/Bloomberg News

Dec. 3 (Bloomberg) — General Motors Corp. and Chrysler LLC told Congress they need $11 billion in government loans just to survive the year. Democrats pledged to keep them out of bankruptcy without saying how.

The aid requests delivered yesterday to U.S. lawmakers total $34 billion, more than a third larger than the plans they set aside last month, and heighten the pressure for action as a deepening auto slump quickens GM’s rush toward a default.

While President-elect Barack Obama has said he favors an industry rescue, GM and Chrysler said yesterday they won’t be operating through his January inauguration without the money stalled by a deadlock in Congress. Democrats want to use the $700 billion bank-bailout fund, and Republicans favor tapping an Energy Department loan program.

Read moreGM, Chrysler Seek $11 Billion Just to Avert 2008 Collapse

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

GM Said to Study Shedding Saturn, Saab, Pontiac to Win U.S. Aid

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Nov. 27 (Bloomberg) — General Motors Corp., working to cut costs to win $12 billion in government loans, is studying whether to shed its Saturn, Saab and Pontiac brands in addition to Hummer, people familiar with the matter said.

Selling or dropping brands would save money and reduce overlap as the biggest U.S. automaker struggles to avoid running out of operating cash by year’s end, said the people, who didn’t want to be identified because no decision has been made. GM’s other U.S. brands are Chevrolet, GMC, Buick and Cadillac.

The review of the 82-year-old Pontiac division, one of GM’s earliest, shows the scope of the survival plan being given to Congress on Dec. 2 to show GM can repay federal aid. GM also seeks to cut debt levels and reduce costs for active and retired union workers, people have said.

Read moreGM Said to Study Shedding Saturn, Saab, Pontiac to Win U.S. Aid

Toyota woes deepen with rating downgrade

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Toyota has lost its top credit rating

Toyota Motor, the world’s biggest automaker and a towering icon of Japanese industrial power, has been stripped of its AAA credit rating under the darkening global economic storm.

The downgrade, said analysts at Fitch Ratings, effectively passes sentence on the entire worldwide auto industry, showing that the business of building cars can no longer produce a single player with the sort of cast-iron corporate resilience of Exxon Mobil or Johnson & Johnson.

“This crisis is demonstrating that the auto industry cannot support a triple-A rating,” said Frederic Gits, a Tokyo-based credit analyst at Fitch Ratings, which issued the downgrade earlier today and declared the auto-industry’s problems “substantial and fundamental”.

Fitch Ratings’ downgrade of Toyota’s unsecured debt to AA deals a stunning blow to Japanese corporate pride, but reflects “severe” turmoil across world car markets and the company’s own spectacular profits warning earlier this month.

To demonstrate the extent of the problem, brokers in Tokyo have recently started circulating aerial photographs of a military airfield in Oxfordshire that has become a colossal warehouse for thousands of unsold cars.

Read moreToyota woes deepen with rating downgrade

Porsche to Shutter Plant for 7 Days as Car Sales Fall; Volkswagen Shares Down 22,66%

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By the way Volkswagen shares declined 22,66% today.

Last month, Porsche surprised the world by announcing it had acquired a nearly 43% stake in Volkswagen with an option to buy 32% more. Without anybody noticing, ‘wee little’ Porsche, maker of scarcely 100,000 cars a year, had cornered a 75% position in VW, which cranks out nearly 6 million vehicles. Source: Los Angeles Times
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Porsche Panamera

Nov. 25 (Bloomberg) — Porsche SE, the maker of the 911 sports car, said it will suspend production at its main plant for seven days to help cope with dwindling auto sales.

Porsche fell the most in a month in Frankfurt trading after the company said today it will idle the factory in Stuttgart, where it is based. Production was also halted for one day last week, the carmaker said in a statement, without specifying on which days the other closures will fall.

“I don’t think that Porsche’s customers have suddenly fallen into poverty, but they’re reacting to the fact that it may be inappropriate to pull up in a new Porsche when their neighbor’s house is being foreclosed,” said Christoph Stuermer, a Frankfurt-based analyst with research firm IHS Global Insight. “It’s an appropriate reaction.”

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