Racing to the Rescue
Who in the world doesn’t believe in supporting the auto business? As the U.S. Treasury contemplates the extent to which it will pump funds into the Detroit Three, European leaders are revving up measures to keep their car companies chugging along.
French President Nicolas Sarkozy said France would consider making consumer auto loans more attractive as a way to help car makers hit by the global credit crunch and slowing economy. As if his country were plagued with a reckless, cut-throat sort of capitalism, the French president declared: “We cannot be the only country in the world that does not support our builders and manufacturers. We have to help industrial infrastructure.” He’s already offered 1,000 euros to every driver who trades in an old vehicle for a less-polluting one, so softening up auto loans would seem to be right up a Parisian alley.
In Italy, Fiat’s admission last week that its car business needs a partner to survive is seen as a way to put pressure on the Italian government for a solution. While media reports cite France’s PSA Peugeot-Citroen and Germany’s BMW as potential partners, industry watchers do not see a deal any time soon. Volkswagen says its finance arm has no capital problems, but is applying for state loan guarantees nonetheless. Sweden and Canada wasted no time pledging support for their auto sectors.
Much like any driver who has found himself staring dumbfounded at a mechanic’s repair bill, governments may be grumpy, but there is no way they won’t pay up.
Deals of the day:
* Suzlon Energy, the world’s fifth-largest wind turbine maker, said it has agreed with Portugal’s Martifer to revise the payment schedule to increase its stake in Germany’s REpower.
* Unite Group, Britain’s largest provider of student housing, said it has completed a sale of assets to the Unite UK Student Accommodation Fund for 171.3 million pounds ($262 million) in cash.
* Citigroup will sell its Japanese trust bank to a unit of Mitsubishi UFJ Financial Group for around $276 million, as the struggling U.S. bank looks to sell assets worldwide.
* China’s state-run energy giant Sinopec could acquire Russian mid-sized oil firm Urals Energy for $130 million, a Russian newspaper reported.
* Telefonica and Vivendi are about to close an agreement to buy Prisa’s pay-TV platform Digital+ for 2.3 million euros ($3.1 million), Spanish radio Intereconomia reported.