In some ways this was a hugely momentous week, historic even. In the end and after a long build up, it was perhaps something of an anti-climax when GM finally filed for Chapter 11. The world kept spinning on its axis, after all. But it is the biggest industrial bankruptcy ever in the US.
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President Obama made it clear that, while GM being in Chapter 11 is more complex than Chrysler – GM is bigger and the fallout’s necessarily bigger – he sees a future for the company once it has been fully reworked. And Chapter 11 is a part of a process that he believes will keep America making things and building cars.
More pain, sacrifices and much hard work lay ahead for even a chance of success. But it would seem that consumers are less frightened of buying from a firm in Chapter 11 than many said they would be. Obama has at least convinced them that Uncle Sam is serious about providing support.
In Europe, the talk was mainly about Opel, Magna and what might happen to Fiat now. Or indeed PSA. And then Ford Europe came into the discussion. And there’s certainly plenty to talk about as auto execs mull structural overcapacity that ain’t going away anytime soon.
Or is it? Will a demand surge come to the rescue? Germany going gangbusters! Er, no, not quite. Think mirage in the desert. Yes, we saw Germany’s car market up 40% in May and European car sales not looking – ostensibly – at all bad. But JD Power issued a strong word of warning: some sales brought forward now to take advantage of temporary scrapping schemes will be taken from future time periods. A man from Goldman Sachs said Germany would be 30% down without the scrappage incentive. Do you want your jam today or tomorrow? For every sale pulled into 2009 on scrappy-do, 2010 is looking weaker.
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By GlobalDataTo end the week on a harmonious note, at least they are now talking at Ssangyong, riot police stood down.
As in much of the industry at the moment, it’s time to assess radically changed circumstances and make the best of them.
Until next time…
Dave Leggett, Editor
US: GM files for bankruptcy General Motors filed for bankruptcy today, entering a new and uncertain era of government ownership…
US: Further necessary sacrifices ahead – Obama Speaking at a White House press conference, President Obama laid out the rationale behind GM’s Chapter 11 bankruptcy protection filing. Obama described the sacrifices ahead as necessary to secure, for future generations, an America which ‘still makes things, still builds cars’…
US: GM’s ‘New GM’ statement in full Given the importance of GM’s announcement today, we are also reproducing the full text of GM’s press statement…
UK: Forget motor shows, let’s ‘do a Davos’ As the UK’s auto industry contemplates life without the next scheduled 2010 SMMT-organised London Motor Show, alternative event concepts are being discussed including the idea of a Davos-style automotive ‘summit’…
GERMANY: GME plan ready by September says Magna Magna International Inc. says it will present a detailed business proposal for General Motors’ European operations by September…
UK: Honda restarts Swindon production Production at Honda’s UK facility – suspended for four months due to the drop in demand for new cars – has been restarted today. A Honda spokesman confirmed to just-auto that Swindon output is planned at around half of previous levels…
FRANCE: New PSA chief does not rule out partnership PSA Peugeot Citroen Chief Executive Officer Philippe Varin said the company will seek partnerships with other car companies as it looks to grow and become more international.
UK: Fiat-PSA tie-up brings ‘more negatives than positives’ Now that Fiat has apparently lost out in the bidding for Opel/Vauxhall, speculation has risen concerning alternative strategies that Fiat might employ to become part of a carmaking group with bigger scale. PSA Peugeot Citroen is in the frame again…
JAPAN: EVs viable only as compact commuters – Toyota Electric vehicles are a viable option but only as compact commuters, a senior Toyota official said on Thursday…
UK: Don’t forget Ford Europe on consolidation – UBS Investment bank UBS has said in a research note that Ford Europe could make a good candidate for a link-up with either Fiat or PSA…
TALKING POINT: AAM warns of ‘Chery Bomb’ dangers In an extremely aggressively worded missive, the Alliance for American Manufacturing (AAM) has warned that Chery, planning US market entry, makes dangerous products based on stolen designs and flimsy construction…
SWITZERLAND: GM Europe’s CEO ‘physically and emotionally exhausted’ GM Europe chief executive Carl-Peter Forster has said in a corporate blog posting that he is ‘physically and emotionally exhausted’ after the intense negotiations to secure agreements with the German government and Magna…
