The Great Debate UK

from Commentaries:

GM blog lifts hood on power struggle over Opel

By Paul Taylor
July 31, 2009

cfcd208495d565ef66e7dff9f98764da.jpgIt's not often you get to lift the hood and watch a power struggle going on in the engine room of General Motors. But the vice-president of GM Europe, John Smith, has just provided tantilising details of the arguments over the rival bids for Opel/Vauxhall, the main European arm of the fallen U.S. auto giant. Smith is the chief negotiator on the sale of Opel.

from Commentaries:

Lufthansa milks EU drama for cost cuts

By Paul Taylor
July 20, 2009

Lufthansa <LHAG.DE> is milking an antitrust standoff with the European competition regulators to extract maximum cost cuts from Austrian Airlines <AUAV.VI> as it seeks to cement its dominance of central Europe's skies.
The German flag carrier has held back key concessions to the European Commission needed to secure approval for the takeover of the ailing airline while it squeezes further concessions from Austrian's workforce and its biggest shareholder, the Austrian government. It won another 150 million euros in savings from job cuts agreed in a third round of AUA cost-cutting this week.
The EU regulator, which supports airline consolidation in principle, is right to insist that the creation of a central European mega-carrier should not be at the expense of consumer choice on key routes such as Vienna-Frankfurt.
Lufthansa, which has set its own deadline of July 31 to clinch the deal, has the Austrians in a tight spot because the cost to the Austrian taxpayer would be far higher if it walked away. The Austrian government holding company, OIAG, says this could cost about 1,400 jobs and imply total costs of 840 million euros. The state has promised to assume 500 million euros of AUA's 1 billion euros of debt as part of a Lufthansa deal.
The German giant needs to reduce the cost of acquisitions it launched last year before the financial crisis hit air travel.
It has already beaten down Sir Michael Bishop to lower the cost of his majority stake in British carrier BMI [BMI.UL] and has snapped up Brussels Airlines, the successor to bankrupt Belgian flag carrier Sabena.
In the latter case, Lufthansa made concessions to the Commission on routes and take-off and landing slots to avoid restricting competition. But it has balked so far at the most important remedies for the Austrian deal, which concern what would be a monopoly on nine daily flights between Vienna and Geneva, operated jointly with another subsidiary, Swiss, and above all on feeder flights to its Frankfurt Airport hub to connect with its more lucrative transatlantic routes.
If the Commission does not stand firm on these issues, it risks being overturned by the EU's Court of First Instance, to which rivals Air France-KLM <AIRF.PA> and former Formula 1 racing ace Niki Lauda's latest venture, Fly Niki, would undoubtedly appeal.
Of course, Lufthansa could let the Austrian deal founder on EU competition concerns in hopes of picking up the pieces of a shrunken or bankrupt AUA later. But it might face competition were the airline's assets to be sold out of bankruptcy. Both Air France and a consortium of Air Berlin and Fly Niki were interested last time.
So the betting must be that, as with the Belgian deal, it will yield to Brussels' demands to clinch the deal in the end.

from Commentaries:

Politics, economics collide over Opel

By Paul Taylor
July 20, 2009

Political and economic logic are set to collide in the byzantine decision-making over the future of German carmaker Opel, the main European arm of fallen U.S. auto giant General Motors.
If politics prevail, as seems likely, the cost to German taxpayers will be higher and the chances of commercial success lower.

from The Great Debate:

Germany risks zombie banks

July 2, 2009

Margaret Doyle-- Margaret Doyle is a Reuters columnist. The opinions expressed are her own --

Germany's politicians seem to have rescued their bad bank. Pushing back the valuation date for toxic assets to before the Lehman collapse has made it more likely that banks will consign their dud investments to the voluntary scheme.

from The Great Debate:

Europe frets over crisis exit strategy

By Paul Taylor
June 29, 2009

Paul Taylor
-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

Higher taxes? Lower public spending? Devaluation? Inflation? Investment in green growth?

Rolls-Royce on a roll despite downturn?

By David Bailey
June 10, 2009

David BaileyProfessor David Bailey works at the Coventry University Business School and has written extensively on globalisation, economic restructuring and industrial policy, with particular reference to the auto industry. The opinions expressed are his own. -

D-Day’s lasting legacy

June 5, 2009

nick-hewitt_000006_1- Nick Hewitt is a historian in the Department of Research and Information at the Imperial War Museum in London. He studied history at Lancaster University and War Studies at King’s College, University of London, where he specialised in naval history. He joined the Imperial War Museum in 1995. The opinions expresed are his own.-

Berlin must refuse Arcandor credit note

By Alexander Smith
June 2, 2009

alexander-smith– Alexander Smith is a Reuters columnist. The opinions expressed are his own –

Don’t scapegoat the Germans for crisis

By Paul Taylor
May 5, 2009

paul-taylor– Paul Taylor is a Reuters columnist. The opinions expressed are his own –

Germany’s political and economic phoney war

By Paul Taylor
May 1, 2009

paul-taylor– Paul Taylor is a Reuters columnist. The opinions expressed are his own –