DealZone

The Car Business: Self-loathing and Chinese Takeaways

Nobody hates cars as much as the car industry does these days. The business is crippling some of its biggest players and behold the dearth of industry names queuing up to buy other automakers.

Opel in Germany is being sold yet are Volkswagen, Porsche, BMW or Daimler anywhere to be found? Spot the empty parking lot.

Without the Chinese, auto sector M&A right now is about as exciting as a 1981 Yugo.

Some makers still have money though, so what has everybody racing to get away?

Bad experiences, in part.

The last really big deal where two car companies merged was DaimlerChrysler in 1998. It’s best remembered this way: Spent a lot of dimes, did a lot of crying. Disaster and divorce. 

A great article written years after the deal revealed telltale signs of the troubles in store for that marriage when even the order of the name – which should go first – threatened to break up the talks.

Road to fortune or highway to hell?

GM-OPEL/That will ultimately be the question asked about what kind of a future the German carmaker Opel faces.

Parent General Motors said on Thursday that it indeed wanted
to sell a majority stake in the unit to Canadian auto parts
group Magna and Russia’s Sberbank, a decision long favoured by the German government under Chancellor Angela Merkel.

With about two weeks to go until a general election in
Europe’s biggest economy, this would clearly be a political
victory — but the question remains whether it will also be an
economic one.

Driven to the brink

fritz1In Detroit, it is a fact of life that you are what you drive.

GM and Chrysler have staked their future — and some $20 billion of taxpayer-backed loans — on the idea that they can reinvent themselves as lean, green and mean manufacturers of small and fuel-efficient cars and electric-drive vehicles.

That’s a vision that resonates with the Obama administration, which has announced an ambitious target of putting 1 million plug-in hybrid cars like the much-touted Chevy Volt on the road by 2010.

But some of Detroit’s highest-profile auto executives are still driving like its 1999. Their rides still harken back to the era when they were the kings of the road.

GMAC’s Christmas present

Santa ClausThe Fed donned the red suit on Christmas eve for GMAC, giving the troubled auto finance company the nod to become a bank holding company.

The speedy approval should not come as a surprise, given that GMAC lends to consumers and GM depends on the finance company to sell cars — factors that could make its survival seen as key to fixing the economy.

The new status gives the company access to government lending programs and should allow it to continue financing loans for GM cars.

Tata’s likely infusion into Jag, Rover, bad news for sellers

SWITZERLAND/Tata Motors, which bought Jaguar and Land Rover from Ford earlier this year, may now have to pump at least $1 billion into the brands to keep them alive. That’s bad news for U.S. automakers trying to sell brands.

While auto assets up for sale by U.S. automakers were expected to linger for a while, Tata’s rough road with Jag and Land Rover are likely to keep those assets on the block for much longer.

Tata has agreed to inject “tens of millions” of pounds into the company to tide it over while the government mulls a bailout,  media reports have said. This is in addition to “hundreds of millions” of working capital provided since Tata bought Jaguar Land Rover from Ford in March.

Not a day for a car show at World Financial Center

Motorexpo New YorkThe timing could have been better for the luxury car show at the World Financial Center in New York, home to Merrill Lynch & Co.

The Motorexpo opened on Monday — the morning after Merrill employees were shocked to hear their company was being bought by Bank of America, marking the end of the storied name in American finance.

Nikki Gold, a promoter for the Motorexpo, handing out brochures at the entrance to Merrill’s headquarters, said “A lot of people are in a really sour mood — the people you expect to take the brochures aren’t taking them.”