Daily News Summary May 29
Magna favourite to take on GM Europe
Car parts maker Magna International has emerged as the likely buyer for Vauxhall-owner GM Europe following talks with the German government on Friday afternoon.
Magna’s bid is being backed in part by the Russian Gaz group, the owner of British-based van manufacturer LDV.
Fiat did not attend recent bid talks in Germany, effectively ending any likelihood of it continuing to bid for GM Europe.
The deal is likely to be formalised over the weekend, after discussions between parent company GM in the US and the German government, which will provide funding for the new owner to protect jobs. (Various: May 29)
Last-minute deal for GM
The US Government is set to take a 72.5% stake in General Motors after the carmaker secured a last-minute deal with its biggest creditors on Thursday.
Frantic last minute negotiations are underway as GM heads for what could be the biggest bankruptcy by an American industrial company.
Bondholders that own about 20% of its $27.2 billion (£17 billion) unsecured debt agreed to accept a 10% stake in the restructured company and warrants to buy a further 15% in return for forgiving its debt.
Smaller bondholders have until 5pm tomorrow to accept the deal or face having their investments all but wiped out during a more contentious bankruptcy process.
If GM wins approval from bondholders, the company will avert the prospect of a bitter courtroom battle over its assets, clearing the way for a speedy restructuring under Chapter 11 bankruptcy protection.
A filing could come this weekend. During the bankruptcy process, GM's assets would be sold to a new company funded by the US Government, which would resume GM's business. (Times Online: May 29)
Thousands take advantage of scrappage scheme
More than 35,000 new cars have been ordered through the UK's scrappage scheme since it was announced in April, government figures show.
It equates to one in five motorists who ordered new cars taking advantage of the £2,000 discount available for scrapping vehicles over 10 years old.
Ministers believe those cars would not have been sold had it not been for the financial incentive.
Motor industry figures say it is too early to declare the scheme a success.
Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, acknowledged that the scheme had enjoyed a "very encouraging" start.
Sue Robinson, director of the Retail Motor Industry Federation (RMIF), said: "The incentive scheme is helping the industry revive sales, while also helping consumers get into a new car. This is a double win.
"The RMIF is conducting a study of the impact of the scheme by surveying the reaction seen by dealers. The results of the survey will be published next week." (AM-online; Various: May 29)
Emissions reductions ‘could harm business
ACEA, the European association which includes 15 of Europe's leading car makers, has issued a new report on the state of the European industry which is critical of the introduction of new limits on carbon dioxide in the 'present economic climate'.
Though the industry association says it is 'fully committed' to meeting the regulated CO2 targets it remains critical of the some aspects, including "disproportionate" fines for failing to meet the targets.
ACEA says that the 'auto industry is characterised by long development and production cycles.
Calls for a slowdown in the rate of environmental legislation due to the economic recession were made earlier this year but rejected by EU industry ministers. However, the Commission has since hinted that it is delaying some environmental proposals on vans and EU car labelling because of the economic pressures.
The ACEA said: “Policy makers have a responsibility to protect the interests of citizens and safeguard the natural environment. but they are also responsible or creating an environment in which businesses thrive. The interdependent nature of both objectives is today perhaps more evident than ever".
(LowCVP.org.uk; ACEA.be: May 29)