Cars – Page 9 – Infinite Unknown

VW shares slumped over 40% in the last 10 trading days

August 19, 2009 by Infinite

VW shares fell 13,98% today.

3 Months: (Durchschnitt = Average)

Hedge funds build up short bets on VW again

volkswagen-up-car
A new Volkswagen UP! car is seen during the ceremonial announcement of the New Small Family vehicles production at the Volkswagen car manufacture plant in Bratislava June 2,2009. (REUTERS)

LONDON (Reuters) – Hedge funds have increased their bets on a fall in voting shares in Europe’s biggest carmaker Volkswagen, according to data on Tuesday, despite the heavy losses suffered by such funds last year.

Hedge funds shorting VW (VOWG.DE) were caught out in October when VW shares more than quadrupled after Porsche announced it had effective control of 74.1 percent of VW.

This left less than 6 percent tradeable in the market and saw funds scrambling to cover their positions.

Nevertheless, figures from Dataexplorers on Tuesday show that stock out on loan — a good indication of short interest — for VW’s ordinary shares has doubled in the past month to 2 percent of total issuance.

Porsche $24 Billion of Options Profit in Peril as Volkswagen Fights Merger

May 26, 2009 by Infinite

porsche
Porsche automobiles sit lined up in the Porsche Forum in Stuttgart-Zuffenhausen, Germany on Nov. 25, 2008. Photographer: Hannelore Foerster/Bloomberg News

May 26 (Bloomberg) — Porsche SE, struggling to combine with Volkswagen AG, is in danger of losing some of the 17.3 billion euros ($24.3 billion) in profits recorded from holding VW options because it may not have the money to exercise them.

Porsche bought options and Volkswagen stock for more than three years and controls more than 70 percent of Europe’s biggest automaker. Now, Stuttgart, Germany-based Porsche may be unable to raise the money needed to cash in the options, according to research by Sanford C. Bernstein & Co., Sal. Oppenheim jr. & Cie. and FAIResearch GmbH & Co.

The 78-year-old maker of the 911 sports car piled up more than 9 billion euros in debt and hasn’t been able to raise the financing even after the options contracts surged in value along with the sevenfold gain in VW shares since 2005, according to the analysts. Porsche is attempting to negotiate a merger with Volkswagen and seek an investor to provide cash after its bid last year fell apart when VW’s home state of Lower Saxony vetoed the proposal and its car deliveries fell 27 percent in the six months ended Jan. 31.

Porsche on the financial brink

May 26, 2009 by Infinite

German car maker Porsche is struggling to raise €1.75bn (£1.54bn) to cover debts and unwind derivative positions stemming from its botched attempt to take over vastly-bigger Volkswagen.

Porsche’s shares fell 3.1pc in Frankfurt on Monday after it emerged that the company had obtained a €700bn loan from Volkswagen as long ago as March. A Porsche spokesman said the group is negotiating bridging finance with a variety of banks, including the state lender KfW.

It is understood that Porsche is also in talks with the Bank of Tokyo for a €750m loan, and is seeking help from the regional government of Baden-Wurttemberg.

The crisis is yet another headache for the German authorities as they put together a rescue deal this week for Opel, most likely with Fiat. Separately, the hotel and retail group Arcandor said it faced collapse without a €650m state bail-out. Arcandor’s share price fell 20pc. The company owns the Karstadt department stores, Quelle, and Thomas Cook. It employs 50,000 workers.

Porsche acquired a 51pc share of VW earlier this year after a series of derivatives deals that tripled Porsche’s debt to €9bn.

The takeover bid went badly wrong, forcing Porsche chief Ferdinand Piech to press instead for a merger of the two car makers on increasingly less favourable terms.

Daimler invests in electric car maker Tesla Motors

May 23, 2009May 21, 2009 by Infinite

daimler_tesla1

Daimler’s investment in Tesla Motors provides both companies with something they desperately need and could be the first step down the aisle toward marriage.

The world’s oldest automaker hitched its electric wagon to Tesla on Tuesday when it bought nearly 10 percent of the company and a seat on its board. Neither side is discussing specifics of the deal, reportedly worth $50 million, but both sides walk away winners.

Tesla gets a much-needed infusion of cash and help building the gorgeous Model S sedan. More importantly, Tesla gains legitimacy as it continues raising funds. Having the company that invented the automobile as a partner makes you much more attractive to investors.

Daimler’s investment buys it a whole lot of battery know-how, something German automakers are short of. And a seat on the board gives Daimler gets a close look at Tesla’s business plan and financials so it can decide if it wants a bigger piece of the action.

We Will All Be Driving Obamamobiles

May 20, 2009 by Infinite

With control of GM and Chrysler the government is getting its wish. It is reaching its goal of over the last 30 years, to be able to force Americans to drive what it says they may drive.

In 1976 it began in force. An auto industry already with quality struggles and difficulty meeting the emissions and safety regulations got hit with Corporate Average Fuel Economy standards. In other nations the tax code was used to encourage people to buy smaller vehicles that used less gasoline, but that was not good enough for the rulers of the United States of America, they wanted vehicles that did not meet their fuel economy standards to simply go away.

– GM bankruptcy plan eyes quick sale to government (Reuters):
NEW YORK, May 19 (Reuters) – If General Motors Corp (GM.N) files for bankruptcy, as widely expected, its healthy assets will be quickly sold to a new company owned by the U.S. government, a source familiar with the situation said on Tuesday.

The source, who was not cleared to speak with the media and would not be identified, said the U.S. government would pay for the assets by assuming the automaker’s $6 billion of secured debt and forgiving the bulk of the $15.4 billion of emergency loans that the U.S. Treasury has provided to GM.

While in Europe, large vehicles can still exist; the buyers simply have a huge tax bill. This is not a good arrangement, but it at least allows automakers to decide what they will build and control the mix of their vehicle lineup. CAFE is different. Should an automaker’s lineup not produce the result that the government has mandated, they are penalized across their entire lineup. That is they are taxed for every vehicle they sell. Even if the automaker meets these targets, a vehicle that has a fuel economy that is too low requires the buyer to pay a gas-guzzler tax. This tax was impressive in 1976 dollars, $1000 to $7000. Thanks to inflation, it’s now usually less than the sales tax on the vehicles it applies to. (And since it’s considered part of the sales price of the vehicle, there is a tax on the tax.)

Chrysler Seeks to Break 789 Dealership Contracts

May 14, 2009 by Infinite

bankruptcy-court

May 14 (Bloomberg) — Chrysler LLC asked a bankruptcy judge to let it reject 789 automotive dealership agreements by June 9, many located in the suburbs of major U.S. cities.

The company wants to break contracts with about a quarter of its estimated 3,188 retail outlets, including seven dealers with AutoNation Inc., two with Lithia Motors Inc. and the Atlanta unit of Asbury Automotive Group Inc., according to a filing today in Manhattan with U.S. Bankruptcy Judge Arthur Gonzalez, who must approve the cuts.

Fiat SpA, not Chrysler, decided which dealers will be brought along to a new company to be formed with the company’s best assets and run by the Italian carmaker, according to people familiar with the matter. Trimming the bulk of dealers from urban areas will increase profitability at the remaining dealers, lawyers for Chrysler said.

GM shares fall to 76-yr low after execs dump stock

May 12, 2009 by Infinite

* Shares down 22 pct; 76-year low

* Vice chairman, 5 others sell almost $315,000 in stock

* Lose-lose situation for current shareholders-analyst

* Market capitalization drops to $690 mln (Adds analyst comments, background, bylines)

DETROIT, May 12 (Reuters) – General Motors Corp stock plunged more than 22 percent to a 76-year low on Tuesday, a day after a group of GM executives disclosed they had sold shares in the struggling automaker.

Six GM executives, led by former GM Vice Chairman and product chief Bob Lutz, disclosed on Monday that they sold almost $315,000 in stock and liquidated their remaining direct holdings in the automaker. [IDnN11125497]

The stock sale underscores the extreme pressure on GM with less than three weeks remaining for the embattled automaker to win deals to slash debt and operating costs with its major union and bondholders to avoid bankruptcy.

Max Keiser on France 24: Can Fiat save Chrysler? (05/07/09)

May 8, 2009 by Infinite

Max Keiser:

“The Hedge Funds make more money with Chrysler dead than alive.”

“Capitalism is now eating itself in America, it’s swallowing itself, it’s destroying itself, because they are going after the last crumbs on the table as the American economy implodes.”

“They are going to fire millions of workers in the entire auto industry.”

“In France workers actually have representation. They can kidnap the boss in France and they can get away with that. In America if they try to kidnap the boss they would be gunned down by American Homeland Security. They have no ability to protest in America, the workers. They are just cogs in the wheel. They are treated like complete mud.”

“They want to eliminate the entire middle classes in America, because they are in the way of the bankers.”

Added: Mai 07, 2009
Source: YouTube

Chrysler to File for Bankruptcy

April 30, 2009 by Infinite

Chrysler, one of the three pillars of the American auto industry, will file for bankruptcy today after last-minute negotiations between the government and the automaker’s creditors broke down last night, an Obama administration official said.

U.S. officials had offered Chrysler’s secured lenders $2.25 billion in cash if they would agree to writedown the $6.9 billion in secured debt that the company owed. But a small group of hedge funds refused the 11th-hour deal, forcing an imminent bankruptcy.

Related articles:
– Daimler to Cede 19.9% Stake in Chrysler to Cerberus (Bloomberg)
– Chrysler Will File for Bankruptcy, Official Says (Bloomberg)

An administration official this morning expressed disappointment, saying the holdouts had failed to “do the right thing,” but that “their failure to act in either their own economic interest or the national interest does not diminish the accomplishments made by Chrysler, Fiat and its stakeholders, nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward.”

President Obama is scheduled to address the issue at noon today at the White House.

UK car production fell 51.3% last month!

April 26, 2009 by Infinite

UK car production fell by 51.3 per cent last month, according to industry figures disclosed today.

Cars produced for export comprised about 75 per cent of the vehicles made in the UK in March, figures released by the Society of Motor Manufacturers and Traders (SMMT) indicated, and production fell by 51.3 per cent in March as manufacturers reduced production to cope with falling demand.

Cars made for the domestic market fell by 47.2 per cent in March.

The latest chapter in the decline of the car industry comes just after the Budget confirmed details of a scrappage plan, whereby people will receive £2,000 to swap a car more than a decade old for a new model.

Volkswagen introduces world’s most economical car

March 29, 2009March 29, 2009 by Infinite

While we don’t have a great deal of information available at this stage, we do know that …

Volkswagen is set to reveal the world’s most economical non-hybrid car to shareholders attending the 42nd annual general meeting of Volkswagen AG in Hamburg.

The single-seater is capable of 0.91 litres per 100km (or 258mpg in the old measure) and can manage a top speed of 123km/h.

The prototype, as shown here, was built in conditions of such great secrecy that little more is known about the car, but we’ll be sure to keep you posted after next week’s meeting.

6 Mar, 2009

Source: CarAdvice

U.S. fund for developing electric cars is untouched

March 24, 2009 by Infinite

WASHINGTON: The future of the American auto industry is getting off to a slow start.

The U.S. Energy Department has $25 billion to make loans to hasten the arrival of the next generation of automotive technology – electric-powered cars. But no money has been allocated so far, even though the Advanced Technology Vehicles Manufacturing Loan program, established in 2007, has received applications from 75 companies, including start-ups as well as the three Detroit automakers.

With General Motors and Chrysler making repeat visits to Washington to ask for bailout money to stave off insolvency, some members of Congress are starting to ask why the Energy Department money is not yet flowing. The loans also are intended to help fulfill President Barack Obama’s campaign promise of putting one million electric cars on American roads by 2015.

“Politicians are breaking down the door asking why the money isn’t being sent out,” said Michael Carr, counsel to the Senate Energy Committee, which oversees the Energy Department.

BMW slashes pay as profits plunge

March 18, 2009 by Infinite

BMW profits are down 78% on last year. Photograph: Simon Stuart-Miller

BMW is slashing boardroom pay by 40%, executive pay by a third and employee wages and salaries by 10% in an effort to preserve cash and retain its independence in the current savage car-market downturn.

The German group had €8bn (£7.3bn) in cash at the end of last year when it saw profits drop from more than €4bn in 2007 to just €921m, after demand plunged by a quarter at the end of last year.

Norbert Reithofer, BMW’s chief executive, told a press conference: “I am convinced that our employees understand the difficulty of the current situation and are willing to accept this hardship.” The dividend has been cut from €1.06 to €0.30 in a savage blow to shareholders.

Reithofer is paid a basic salary of €600,000 but saw his overall package last year cut to €2.3m from €3.75m in 2007, largely because his bonus was slashed in half to €1.65m as group earnings and sales plunged.

One official said: “I can live with this. At least I’ve got a job, a flat and a car.” But it is unclear how the 100,000-strong workforce will react after seeing a net 5,700 jobs go last year, 6,000 temporary staff lose their posts, including 850 at Mini’s Oxford factory, and plants put on a four-day week.

GM says it will go bust in days without new US bail-out

March 5, 2009 by Infinite

General Motors today warned it would go bust within 30 days unless the US treasury gives it a further multi-billion dollar loan.

The dramatic warning from America’s biggest car group came after its auditor, Deloitte, raised substantial doubts about its ability to continue operations as a going concern.

These alarm signals were contained in GM’s 480-page annual report for 2008 to the US Securities and Exchange Commission, America’s financial regulator. They further underline the parlous state of the global car industry.

Related article: GM Europe seeks cash with 300,000 jobs at risk (Times)

GM has so far received $13.4bn (£9.5bn) in treasury loans and a further $1.6bn in other government loans. Today , effectively holding a gun to the government’s head, it said it could default on this $15bn if it did not receive a further cash injection.

It is seeking a total of $30bn from the Obama administration after racking up $82bn of losses in the last three years, including $31bn last year.

The group, once the world’s biggest carmaker, said it needed $3.5bn cash in 2009 and a further $2.3bn to 2014 to stay alive. The plan it has submitted to Tim Geithner, the US treasury secretary, envisages 47,000 job losses – 26,000 outside the US.

GM Europe seeks cash with 300,000 jobs at risk

March 4, 2009 by Infinite

The carmaker wants £3billion from European governments to keep factories open, with Belgian and German plants most at risk

The European operations of General Motors will run out of cash within weeks unless they get government support, the American carmaker said yesterday, adding that a collapse would put up to 300,000 jobs at risk.

Fritz Henderson, the chief operating officer of GM, said that the division, which includes Opel in Germany and Vauxhall in Britain, would hit liquidity problems early in the second quarter.

Volkswagen Will Cut All 16,500 Temporary Jobs Worldwide This Year

February 28, 2009 by Infinite

Two workers install a VW logo in the wall of a Volkswagen center in Berlin

Feb. 28 (Bloomberg) — Volkswagen AG, Europe’s largest carmaker, said it will cut all 16,500 temporary jobs in global operations as the recession and tight credit sap purchases.

“There’s no way around this,” Chief Executive Officer Martin Winterkorn said in an interview with Germany’s weekly Spiegel magazine published today. The financial crisis “is really brutal,” the CEO added. Company spokesman Stefan Ohletz confirmed Winterkorn’s published remarks by phone.

Responding to the worst car markets in almost two decades, Volkswagen shuttered five German factories this week, affecting two-thirds of its 92,000-strong German workforce. That’s on top of a three-day shutdown at the main plant in Wolfsburg.

GM Posts $30.9 Billion Loss as Wagoner Seeks New Aid

February 26, 2009 by Infinite

Rick Wagoner, chairman and chief executive officer of General Motors Corp., pauses during a news conference at the company’s headquarters in Detroit, on Feb. 17, 2009. Photographer: Jeff Kowalsky/Bloomberg News

Feb. 26 (Bloomberg) — General Motors Corp. reported a $30.9 billion annual loss, the second-biggest in its 100-year history, as Chief Executive Officer Rick Wagoner asked the Treasury for more cash to survive through 2009.

GM’s cumulative deficit ballooned to $82 billion since the end of 2004, when the biggest U.S. automaker last had an annual profit. Full-year sales fell 17 percent to $149 billion, damped by a recession that ravaged new-car demand, GM said today.

“The size of the loss matters not only because it impacts what it will cost to restructure the company, but also the kind of bill for which the taxpayer is on the hook,” said John Casesa, a managing partner at consultant Casesa Shapiro Group LLC in New York.

Related articles:
– GM’s Wagoner Meets With Auto Panel for Six Hours (Bloomberg)
– Will GM bonds become worthless? (CNN Money)

The future of Detroit-based GM may pivot on whether Wagoner, 56, is able to persuade President Barack Obama’s auto task force to approve as much as $16.6 billion in additional money on top of $13.4 billion in loans so far. Wagoner is meeting with the panel today in Washington.

Should the panel decide against extending more aid, GM’s only option may be a government-backed bankruptcy, because the company said Feb. 17 it would run out of cash without at least $2 billion more in loans next month.

Japanese carmakers slash production by up to 50%

February 25, 2009 by Infinite

Japan’s big three carmakers today reported a dramatic fall in production as the auto industry counts the cost of plummeting global demand.

Toyota, the world’s biggest carmaker, said global production dropped 39.1% in January from a year earlier to 487,984 vehicles. Honda reported a fall of 33.5% worldwide to 226,551 vehicles and Nissan 54% to 145,286.

The global economic crisis has ravaged demand in major markets, forcing Japan’s carmakers to slash production and lay off thousands of workers.

Toyota Will Cut Japan Output 54% in Current Quarter

February 16, 2009 by Infinite

A file photograph shows workers checking Toyota Motor Corp.’s Lexus LS600 hybrid sedans on the production line at its Tahara plant in Tahara City, Japan. Photographer: Kimimasa Mayama/Bloomberg News

Feb. 16 (Bloomberg) — Toyota Motor Corp., the world’s biggest carmaker, will slash domestic production 54 percent in the current quarter as demand plunges in the U.S. and Japan.

Toyota Plans Worker Buyouts, North America Pay Freeze

February 13, 2009 by Infinite

Toyota Motor Corp. vehicles sit parked in a storage lot at the Port of Newark in Newark, New Jersey on Jan. 29, 2009. Photographer: Daniel Acker/Bloomberg News

Feb. 13 (Bloomberg) — Toyota Motor Corp., the world’s largest automaker, will freeze wages and offer voluntary redundancy to plant workers in North America for the first time as the company widens output cuts to adjust for slumping demand.

The company will cut pay for factory executives and eliminate bonuses for all salaried employees, Toyota said in an e-mailed statement late yesterday. The Toyota City, Japan-based carmaker is making further cuts in its assembly schedule for April, and creating a “job-sharing” program to reduce work hours at some plants, spokesman Mike Goss said.

Since passing General Motors Corp. in global sales last year, Toyota has forecast its first operating loss in 71 years as the global recession cripples demand for its Camry sedans and Tundra pickups. Toyota posted a 32 percent U.S. sales drop in January and has already announced plans to reduce output at its plants in the U.S., Canada and Mexico.

GM Trimming 10,000 Jobs, Reducing Pay as Much as 10%

February 10, 2009 by Infinite

Feb. 10 (Bloomberg) — General Motors Corp., the largest U.S. automaker, will cut 10,000 salaried jobs globally and reduce pay by as much as 10 percent to slash costs and prove its viability to keep $13.4 billion in government loans.

About 3,400 of GM’s 29,500 U.S. salaried workers will be dismissed by May 1, the Detroit-based automaker said in a statement. U.S. salaries will be cut temporarily by 10 percent for executives and by 3 percent to 7 percent for most others. GM Chief Executive Rick Wagoner, who already sliced his annual salary to $1, is reviewing salaries and benefits abroad.

Nissan to Cut 20,000 Jobs as Carmaker Forecasts Loss

February 9, 2009 by Infinite

Carlos Ghosn, president and chief executive officer of Nissan Motor Co., pauses during a news conference in Tokyo on Feb. 9, 2009. Photographer: Toshiyuki Aizawa/Bloomberg News

Feb. 9 (Bloomberg) — Nissan Motor Co., Japan’s third- largest automaker, said it will slash 20,000 jobs and post its first loss in nine years as the global recession cripples car demand and a stronger yen ravages the value of overseas earnings.

The company expects a net loss of 265 billion yen ($2.91 billion) for the year ending March 31, compared with its October estimate of 160 billion yen in net income. It also scrapped its second-half dividend.

Nissan’s sales in the U.S., its biggest market, plunged 31 percent in January as demand for Altima sedans and Xterra sport- utility vehicles dried up. Chief Executive Officer Carlos Ghosn’s elimination of 9 percent of the workforce caps a month in which all of Japan’s carmakers slashed forecasts and Panasonic Corp. and NEC Corp. cut workers.

U.S. Auto Suppliers’ Industry Aid Request May Reach $25 Billion

February 6, 2009 by Infinite

General Motors Co. Hummer H3 vehicles sit parked in a storage lot at the Port of Newark in Newark, New Jersey on Jan. 29, 2009. Photographer: Daniel Acker/Bloomberg News

Feb. 6 (Bloomberg) — U.S. auto-parts suppliers, struggling with losses as sales dwindle, may seek as much as $25.5 billion in government aid to prevent an industry collapse.

Toyota shuts down all but one assembly line

February 5, 2009 by Infinite

The automaker cuts production to meet falling global demand, trying to save jobs.

TOYOTA CITY, Japan (CNN) — On what was to be a historic day halting all of Toyota’s Japanese assembly lines, the automaker announced late Thursday that it kept one line running.

The late news sent copy editors and reporters to their laptops erasing headlines like “historic shutdown,” but it did little to quell the pain for the tens of the thousands of workers idled across Japan as nearly every Toyota line stopped producing autos and auto-related equipment.

Nowhere was the silence more deafening than in Toyota City, home and birthplace to Toyota Motor Corp.. Factories were shuttered and workers idled in an attempt to bring production in line with falling global demand.

The day was particularly ominous for assembly line worker Takayuki Yoshikawa, who has already been told he’s out of a job and back home in May. Yoshikawa lives in a Toyota-owned dormitory.

“I don’t know what to do,” said Yoshikawa. “I could go back to my hometown, but there are no jobs there, either.”

Toyota, now the world’s largest automaker, plans 10 more days like this, spread out over the next two months. Toyota’s incoming president, Akio Toyoda, called the current economy “unprecedented, the likes of which haven’t been seen in 100 years.”

Porsche looks to cut costs amid sharp drop in sales

January 31, 2009 by Infinite

Porsche yesterday ann-ounced a cost-cutting programme and further production cuts after the German sports carmaker and owner of a majority stake in Volkswagen reported a fall in half-year operating profits and a sharp drop in sales.

Wendelin Wiedeking, Porsche’s chief executive, said the company had initiated a programme to cut costs by far more than €100m ($128m) and would idle its plants for another 19 days before this year’s summer break.

Porsche, like many other carmakers, has already halted production longer than usual over the Christmas break.

Related article:
Porsche Faces Frankfurt Investigation Over VW Trading (Bloomberg)

Mr Wiedeking’s comments came as Porsche’s sales dropped by 27 per cent in the first six months of its fiscal year, which ended today.

“It is fair to say that operating earnings in the first half of the year were down by the same extent as the company’s sales,” Mr Wiedeking said at the company’s annual shareholders’ meeting.

But overall earnings, boosted by VW option trades, would exceed the €1.66bn of the first six months of the previous fiscal year, Mr Wiedeking said.

Porsche has used a controversial options strategy to gradually take over VW, Europe’s largest carmaker with a revenue 15 times larger than Porsche’s.