Another week, flies by, another week of government pronouncements, daily news gloom and stock market turmoil.
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Mid-day Friday, here in UK, and the lunchtime news summary from Reuters provides an interesting snapshot as we lurch into the weekend: “The global banking system is past the danger of systemic meltdown following government intervention, but there will still be economic consequences, the chairman of the Financial Services Authority said…”; “Asian policymakers held emergency talks to find ways to bolster their banks on Friday before a meeting between US and French presidents that Nicolas Sarkozy said could help launch a “refoundation of capitalism…”; “The financial crisis is a defining moment for the world economy and there must be global solutions to end it, prime minister Gordon Brown wrote in The Washington Post on Friday…”; and, inevitably, “David Cameron ended a truce with the government over the credit crunch on Friday, saying the financial crisis proved Labour’s economic record was a failure.”
After the past week, in which the US and UK governments each propped up local banks to the tune of billions – of taxpayers’ money – (this taxpayer noted the departure of one UK bank chief with an annual pension of over a half million pounds a year; he reportedly declined a ‘golden parachute’ on top), you might expect some good news.
Nope. All I saw, at least on one US national news network’s bulletins this week, was more doom ‘n’ gloom. NBC Nightly News had a reporter roaming parts of the US – like Ohio and a dreary part of Kansas City – hit badly by job losses and attendant mortgage foreclosures. And all while numerous talking heads poped up to say the recession – ‘cos that’s what we’re definitely now in – was showing no signs of early abatement. One small glimmer of light and decency: the Chicago sheriff who said he wasn’t going to send his men to enforce any more bank foreclosure-prompted evictions on the grounds, basically, that many ‘ain’t fair’.
Our own economic sage, Rob Golding, weighed in with his view this week, too. He made the interesting point that currency movements could again make the UK a great place from which to export cars; a certain French party that closed a certain Coventry plant could soon be regretting this decision, n’est-ce pas?
Other than that, there was precious little good news on the auto front. Sales tanked almost everywhere you looked, while jobs continued to be axed in places as far apart as the US and Australia (one local industry observer, of 30 years’ standing, told me today he thinks Ford and GM are now doomed ‘down under, which would leave only Toyota manufacturing cars there) and Spain. And ‘official’ photos of Toyota’s much-anticipated new Prius ‘unofficially’ made it on to the ‘net.
Emerging markets provided a few glimmers of light as Porsche set up a central and east Europe marketing unit in Prague to support growing sales in the region, Dacia actually boosted Renault globally last month and Poland output rose 30% year to date.
Still, even despite all this, there’s entertainment value in the ongoing Chrysler/GM/GMAC and, as of today, Renault saga.
So far, it seems, Cerberus has talked about selling Chrysler to GM in return for the General’s stake in GMAC. But Cerberus might also hive Chrysler off into units – financial, trucks, Jeep, etc – and both GM and Renault might be interested in buying some – GM fancies the Mexican trucks biz and Renault would like Jeep back, “sources say”. This one will run a while yet.
If Renault does get Jeep back – after buying it with American Motors in ’79 and then selling the whole lot on to Lee Iacocca’s Chrysler in ’87 – it’ll simply further reinforce my long-held view that the auto business, essentially, is cyclical. You just have to stick around long enough.
Enjoy your weekend,
Graeme Roberts
Deputy Editor
just-auto.com
