This week’s news highlights can be easily summarised: Q1 results (including Ford’s better than expected numbers out today), Chrysler, Fiat, Marchionne, General Motors, Opel, Chapter 11 and Shanghai.

That loud ticking sound you can hear is the the US Treasury autos task force’s Chrysler clock, alarm set for 30 April. By, then Mr Nardelli and Co., you need to have sorted out acceptable labour cost cuts with the stubborn CAW, the UAW, stroppy bondholders and come to some sort of agreement with that nice Mr Marchionne from Turin who keeps popping over to talk business. Or it’s a date with maybe Judge Robert Drain in the New York Bankruptcy Court (he’s had the unenviable task of dealing with Delphi’s Chapter 11 filing for almost four years) or a similar court in Delaware or elsewhere. No pressure, then.

Then, of course, there’s the Canadian government, nervously eyeing the future of the two big Chrysler plants in the country’s automaking province of Ontario, already reeling from the US downturn and earlier cuts and closures at Detroit Big Three-owned plants. Industry minister Tony Clement  last week threatened to pull the plug on government aid unless the CAW agreed to a $C19 cut in labour rates within two weeks. We understand further talks are taking place today with Clement reportedly demanding hourly updates on the Chrysler situation.

Meanwhile, the GM saga rumbles on. CEO Fritz Henderson and his team now have sufficient government loan funding to get them through to their 1 June deadline and and there have been as many unofficial reports ‘citing sources familiar with the situation’ about GM’s position on any given day as Chrysler’s. Henderson last week said all was going to plan and there were strategies coming together to restructure both outside Chapter 11 (his preference) and in, if ordered there by the administration.

He also mentioned that GM has sent out confidentiality agreements to more than six potential investors for Opel/Vauxhall and rumours abounded on that deal this week, including this story suggesting GM would accept just a EUR500m capital injection for a partial stake. There were also encouraging signs that some sort of private investor deal could be reached with the Merkel coalition hinting it might be a bit more flexible on a state loan guarantee. Seems like private equity investors aren’t so keen, though.

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Fiat’s Sergio Marchionne parallel to his Chrysler dealings, is also reported to be interested in Opel, or parts thereof: German magazine Der Spiegel said late this week the Italian automaker could take a majority stake in Opel.

Come mid-week, we should at least finally have some (official) view of where Chrysler is headed. The lights are sure to be on late in Detroit this weekend.

The annual auto show in Shanghai saw the roll-out of a number of top-end new cars including the naming of the upcoming ‘baby’ Rolls-Royce and, significantly, the launch of the much-hyped Panamera (first time a key Porsche model has made its global debut in the East) and updated Mercedes S-class line. Clearly, those automakers all know where the new money is.

While Russia was a Q1 basket case, some automakers were quite upbeat in China with Honda and Hyundai seeing growth both in their own sales and the market overall while GM’s local chief reckoned there were signs some regional markets were “bottoming out”.

Meanwhile, BMW partner Brilliance targeted a 10% rise in sales this year and Mercedes-Benz China simply targeted BMW.

Have a nice weekend,

Graeme Roberts
Deputy/News Editor