Auto maker General Motors is grappling with the future of its European units Saab and Opel after one sale collapsed and the other was pulled, targeting the bulk of its 9,000 job cuts at Opel’s German factories.

Bookseller Borders UK called in the administrators yesterday, adding its name to a growing list of failed British high street retailers. Administrator MCR is hoping to sell the business, bought by Valco (the private equity arm of turnaround specialist Hilco) in July this year, as a going concern.

Lachlan Murdoch, son of News Corp chief executive Rupert Murdoch, sold some $27.6 million of his shares in his father’s company as he bought 50 percent of Daily Mail & General Trust’s radio operations in Australia.

For the latest deals news from Reuters, click here.

And here’s the top stories from elsewhere (some external links may require subscription):

Concerns over Dubai World’s debt dominated the news as stocks around the world tumbled and markets struggled to get to grips with the extent of the problem in the absence of solid information, says the Financial Times.

Siemens AG’s hearing aids business, valued at up to 3 billion euros, is drawing interest from private equity firms including KKR and BC Partners, Bloomberg writes.

Ever wonder how General Motors is holding onto its top talent? 

After a traumatic bankruptcy and series of federal bailouts, the company still owes billions of dollars to the U.S. and Canadian governments. It lost $1.2 billion in its latest quarter, and only sees a slight uptick in auto sales next year.    

The days of banner-year profits and bonuses must seem far off for GM’s executives and finance staff.  GM’s Chairman has already said pay caps imposed on companies by the U.S. government’s pay czar make it tough to hire executives.

While other job opportunities are obviously limited in Detroit, and they may have nowhere better to go in the industry,  the company’s plans for a 2010 IPO has emerged as a key staff retention tool, one of its top executives said on Tuesday.

In comments to the Financial Executives International Current Financial Reporting Issues conference in New York, Nick Cyprus, vice president, controller and chief accounting officer at GM said:

“I have a tool that my peers don’t have. We have an IPO coming up in the next half-a-year to a year or whatever it takes. That’s a great tool, too. Getting the experience of taking General Motors public again is not only a great tool from an experience perspective and resume builder, but it’s also a great experience in that if things work out well there are potential wealth opportunities. In essence, the taxpayers get paid back and people who have delivered get an opportunity to make some money.”

GM  is planning to arrange a revolving line of credit in preparation for an eventual IPO, which would probably be one of the biggest in 2010 if it is able to keep up with its time schedule.

If you were a GM employee, or an investor for that matter, how excited would you be about this IPO?

Announcing a third-quarter operating loss, the government-owned automaker said it would begin paying down its $6.7 billion debt to the U.S. government ahead of schedule. Most financial experts would agree that paying off debt is a good thing.

The government extended almost $50 billion in financing to GM but agreed to convert most of that into a 61 percent equity stake in the automaker. A congressional oversight panel said the government was unlikely to recover all of the financing it provided GM.

Banks that paid off their government bailouts early were able to shrug the pay czar off their backs and return to the time-honored practice of paying their executives whatever they pleased. It’s unclear whether GM will be able to do the same once it pays off the government. After all, taxpayers will still be majority shareholders after all debts are paid. Ken Feinberg may well wind up with a desk at GM’s HR office.

So why pay this money back before it is due? It’s not as if the prepayment is being funded from genuine earnings. In effect, GM is using money borrowed from taxpayers to pay them back. With expectations so low, and markets gradually accepting that the worst may be behind it, is this trip really necessary?

“You wonder if your chance will ever come or if you’re stuck in square one.”

When I heard about GM keeping its Opel unit, that line from a song by British band Coldplay came to my mind. After all those long nights of paltering on job cuts and money, GM was having a change of heart.

The sale of Opel to a group led by Canadian car parts maker Magna — announced in September — was widely considered a done deal. Turns out, it was less done than more. Citing improving business conditions and the strategic importance of Opel, GM decided it would be better to alienate the German government that provided it with a loan to sweeten the sale of the unit to Magna than to lose the business. GM said it would repay the rest of the 1.5 billion euro ($2.2 billion) bridge loan if Berlin requested. The loan helped save Opel from being sucked into GM’s dip into bankruptcy this year.

“This is a black day for Opel,” an employee, who declined to be named, said in front of the company’s headquarters in Ruesselsheim, near Frankfurt. German government officials were said to be seething, as were the Russians, who’s Sperbank had tied up with Magna to do the deal. But not all of Europe was angry. British unions welcomed the news. “It is fantastic news for the UK and right that General Motors does not break up its family and instead retains ownership of (Opel sister brand) Vauxhall,” said Tony Woodley, joint general secretary of the Unite union.

Analysts say big questions remain about what GM will do with Opel when consumer-friendly car scrapping schemes expire. At that point, will it be back to square one?

General Motors may soon get the long-delayed green light to sign over carmaker Opel to Canada’s Magna. EU antitrust regulators have no plans to block Magna’s acquisition of GM’s European arm, a European Commission spokesman said in Brussels, easing fears the transaction could run out of gas in debate over German state aid to the mostly German-staffed company.

Magna hopes to conclude the deal within weeks of signing a contract. That should be that, right? Well, hardly. For one thing, Spanish workers at Opel’s plant at Figueruelas have voted to strike in protest at cuts included in the Magna package. And European politicians say GM and the Opel Trust should have the option of reopening the bidding process.

But the jilted other bidder, RHJ, says it is no longer interested in doing a deal, so going back to the auction block is probably a nonstarter. And with European auto titan Volkswagen saying sales will likely stay stalled next year, the political will to get a deal done is about all Opel has going for it right now. The company is poised to run out of cash by mid-January.

Major automakers don’t sell cars to American consumers; they sell to dealers. And the biggest U.S. dealership chain by a wide margin is Fort Lauderdale, Florida-based AutoNation, which sold over 440,000 new and used vehicles last year.

So when AutoNation CEO Mike Jackson talks, auto executives listen — or so you would think.

In an interview with Reuters, Jackson said Detroit automakers had largely ignored his warnings over the past decade that the U.S. industry was headed for a crisis.

“I think I was usually able to reach an intellectual agreement on where the industry was headed. Where we disagreed was how much time we had to get there. On that, even I was wrong. Time was up,” Jackson said.
 
Jackson thinks GM and Chrysler can be fixed. But he also thinks Washington should let either or both fail if their current turnaround effort backed by $60 billion in taxpayer funds falters.
 
Here are excerpts from the interview and Jackson’s view of where GM, Chrysler, Ford and their rivals stand now in the marketplace:

Q: Are GM and Chrysler capable of change?

A:I think they had a near-death experience. When you really get down to the point where we either get this done or we won’t exist anymore, then it happens. …My sense is that absolutely Sergio (Marchionne) is providing leadership at Chrysler and (Fritz) Henderson at GM. It’s under way, and it’s going to happen.
Q: You’re looking to buy Ford and GM dealerships. Why is that?

A: We always bet on the biggest, broadest brands. Now we’ll take a look if the pricing and the opportunities are right. We love Chevy and we love Ford. Those are the brands that will succeed in the future. Those are the brands that are going to get the majority of the product and marketing dollars from those companies. They’re also the broadest brands. You can sell everything from Chevy from a Corvette to an Aveo. It’s unbelievable how well accepted and how approachable those brands are for the American consumer.

Q: Are you withholding judgment on Chrysler?
 
A: I think Chrysler has the biggest challenge of any of the companies that are out there. It’s been through the biggest turmoil for the longest time. It’s product pipeline is the most disrupted so let’s wait and see. But with Ford you can see that they’re clearly gaining momentum. The product development at GM was not nearly as disrupted as what happened at Chrysler, so they’re in good shape. Chrysler has the most difficulty, so we’ll take a wait-and-see there. Plus they don’t have an anchor volume brand like a Chevy or a Ford. They have a great brand in Jeep. There’s always a place for Jeep in the world. They have a good brand in Dodge but it can’t compare to a Chevy or a Ford. Then you have Chrysler, which is probably a head-scratcher of a brand. It’s a more complicated situation over there.
 
Q: Is the government’s role finished in supporting the U.S. auto sector?

A: The catastrophic economic crisis that hit its peak with the bankruptcy of Lehman Brothers, and I say this as a Republican,  was so massive and catastrophic, the only entity that had the size and scale and skill to step in and save the day was the U.S. government. It needed to do everything or we were looking at the next Great Depression and industries like automotive would have been swept away. So, they did it. You can criticize this and you can criticize that but they saved the day. Now they have to gradually unwind it and you need to look at the lessons learned so that we never again face a systemic collapse of the American economy and free enterprise. We were on the brink of that.
 

Q: But the government’s direct role is finished now?
 
A: I think so. Here’s my view: The economy is going to gradually improve and if one of  these companies — GM or Chrysler — falters, they’re going to let it go. At 10 million (unit sales) facing the Great Depression, we couldn’t handle one of these companies going down and the domino effect it would have on the entire industry. But if two years from now one of these companies is faltering and the economy has recovered and sales rates are up to 12 or 13 million, then they should face the consequences of that.
    
Q: Popular opinion would seem to agree with that.
 
A: Well, I agree from a business point of view. I think Chrysler and GM understand that. They know that this is their one shot and I think that’s understood by the boards and it’s understood by management. That’s why I’m so optimistic that change is going to happen.

(Writing and Reporting by Kevin Krolicki, Detroit Bureau Chief. Reuters photos by Rebecca Cook.)

“Think about it. If you are a member of the union right now, you’re spending all your time negotiating about health care. You need to be spending some time negotiating about wages, but you can’t do it,” he said.

In fact, the UAW locked itself into a contract limiting wages and changes to health care, without the ability to negotiate with a threat of strike, until 2015. These stands were agreed to by the union at the prodding of the Obama administration, which demanded that union autoworkers accept lower wages — as a condition to the bailout that saved Lordstown — to match non-union workers at Toyota plants in Kentucky and Honda plants in Ohio.

Even so, Lordstown is something of a success story for both the UAW and GM, and Obama’s remarks were punctuated with enthusiastic applause.  After winning deep concessions from the UAW in 2007, GM agreed to invest $500 million to retool the plant to make a new fuel-efficient small sedan, the Chevy Cruze.

Obama had nice things to say about the Cruze, which GM expects to get more than 40 miles-per-gallon in highway driving.

“I just sat in the car,” Obama said of the Cruze. “I asked for the keys. They wouldn’t give me the keys. I was going to take it for a little spin. But it was nice sitting in there. It was a roomy car.”

Consumers will not get the keys to a new Cruze, either, until the middle of next year when it arrives in showrooms. In the meantime, Lordstown is stuck building the Cobalt, a budget-minded Chevy and vestige of the “old GM.” 

Consumer Reports in its October edition branded the Cobalt as one of the five “cruddiest cheap cars” on the market.

(Writing by Kevin Krolicki. Reuters photo by Larry Downing.)

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.

But good old fashioned sectoral M&A is being thwarted by something more than good old fashioned fear and loathing. It’s self-loathing. The industry’s top names have already gobbled up the companies they wanted – Jaguar, Lamborghini, Bentley.

U.S. and European makers are all out of love partly because their long established businesses at home are not making the big bucks. What they want now is emerging market growth, China preferred.

Just look at the reform plans of General Motors. Keep Buick, kill Pontiac. This was an astounding choice from a U.S. marketing perspective.

Pontiac has trounced Buick in U.S. sales forever. Cool people drive Pontiacs, or at least people who used to be cool. Burt Reynolds drove a Trans-Am in Smokey & the Bandit in 1977 and the tyres are still hot.

On the other hand, if you have an uncle who wears white shoes and belt and likes to make out he’s well off but isn’t, he drives a Buick.

He’ll tell you it’s just like a Cadillac. And you’ll ask ‘Then why didn’t you buy a Cadillac?’ He’ll try to avoid saying because he couldn’t afford one. And your mother will ask why can’t the family just get along.

But Buick is GM’s big badge in China, and that’s where it is placing its bets. Why aren’t German carmakers buying German carmakers and Americans U.S. ones? Because they don’t want to be in Germany or the United States, they want to grow abroad.

Don’t be fooled by Fiat. Yes it now has a stake in Chrysler, but it came to the table empty handed. The Obama Administration needed a “front” – an industry buyer to feign deep faith in the future of Chrysler – to make it politically feasible for it to fork over the billions in taxpayer money needed to keep the maker of Dodge trucks on life support.

Fiat boss Sergio Marchionne saw this and stepped forward. He similarly had his eye on European government funding when he put up his hand for Opel. You guys pay and I’ll own it. You have to give the guy credit.

It’s tough under such terms to think of these deals as strategic industrial tie-ups, they’re purely opportunistic. And the Germans at least realised this and thought better of doing a deal.

Fiat, not having sold one of its brand in America since 1983, now returns to a vastly different market from the one it fled from in despair.

If they thought it was tough back then, just wait until they try selling in a market where the Japanese have plants churning out cars and trucks across the country and the South Koreans, a complete non-entity before, now sell about 700,000 cars a year.

European whispering about how Fiat might “introduce” small cars to America misses out the last 35 years of change in the U.S. market.

Which is a good place to turn to the Chinese, who currently are not missing out on anything.

By the time Fiat sells its first car in Ohio, Chinese ships will be docking full of smaller, cheaper rival models that will drive Fiat into the weeds. There’s a chance the Chinese ships could outnumber the Fiats that get bought.

The Chinese have taken years gearing up. They bought the UK’s MG-Rover, want GM’s Hummer SUV maker, and are now eyeing an indirect slice of Saab.

More importantly, they have partnered at home with all the big names – VW, Ford, Daimler, GM, Hyundai – and that has fostered expertise that sets up the next phase of growth – exports of their own brands such as Chery, Geely and Changan.

You may not know these names now, but you will soon. No American knew what a Daewoo or Kia was 10 years ago either. The Chinese will put the wind up the Americans, Europeans, Japanese and South Koreans. India also risks being left behind in its similar yet still nascent dream of dominance in the cheap auto export market.

A good rule of thumb is that any nation that can build nuclear plants, rockets and submarines can export a passable hatchback.

Russia hasn’t, that’s true, but China has one critically important advantage – the ardent desire of Western and Asian firms for a slice of the massive Chinese market.

There’s a quid pro quo there that’s likely to clear the way for more Chinese takeovers and their inevitable export push.

U.S. and European companies want partnerships and a nod for access in China, and in return will tell Washington and Brussels it’s cool with them if Chinese firms come knocking.

China’s makers are about to and the appetite of global automakers for Chinese takeaways is already plain to see.

This post was written by Jason Neely.

Once upon a time, when $1 million was big money, General Motors spent millions on an advertising campaign on three U.S. television networks featuring the sing-along slogan, “Baseball, hot dogs, apple pie and Chevrolet.”

Powered by the link between Chevrolet and other American loves, GM’s share of U.S. auto sales was 35 percent in 1980. In 2009, GM’s share of the American auto market is a mere 19 percent, as it struggles with a backlash from an unpopular federal bailout and bankruptcy.

Chevrolet is hardly as American as apple pie anymore, but Chevrolet and GM will soon launch an aggressive marketing campaign to change deep-set perceptions of American consumers that GM cars and truck are inferior to imports like Toyota and Honda. The campaign, which will feature new company chairman Ed Whitacre and the slogan, “May the best car win,” will challenge notions of inferior products and will be waged on a myriad of television networks and print publications, but will also employ the Internet.

It will be an uphill battle. Perceptions are hard to change.

“This has been a problem for a long time for GM,” said David Cole, who heads the Ann Arbor, Michigan-based Center for Automotive Research. “It’s always the case that perception lags reality — no matter which direction you are heading in. The Japanese companies faced this for years.”

In the early 1970s, the mention of a Japanese car including today’s global sales leader Toyota and of the highly rated Honda , brought snickers from Americans. “Made in Japan,” was a punchline for jokes by American comedians, which reinforced the perception of poor quality.

But within a couple of decades, helped by sharp increases in U.S. gasoline prices in 1973 and 1981, Japanese cars became known for quality and for producing models that got great gas mileage.

GM relinquished the leading global automaker mantle to Toyota last year, mostly because of the perception of poor quality autos developed over several decades. This notion was supporeted by surveys and road tests done by groups like Consumer Reports.

Recently, GM brands Chevrolet, Buick, Cadillac and GMC Trucks have gotten improving marks from reviewers.

In June, J.D. Power and Associates said its surveys showed that Chevrolet and Ford had almost wiped out the gap with Toyota in new car quality. To back up its faith in its products, GM will next week introduce a 60-day money-back guarantee for its new cars and trucks. It is part of what GM vice chairman Bob Lutz called a “barrage” of advertisements.

Lutz said that while readers of auto publications may be aware of the narrowing quality gap, most American consumers will be much harder to convince that GM has caught up with the likes of Honda and Toyota.

“This is a big bet on the power of communication and effective advertising in changing public perception,” GM Vice Chairman Bob Lutz said.

A web site set up in advance of the GM ad campaign underscores the hurdle it faces with consumers. The site — www.thebestcarwins.com — invites visitors to rank vehicle brands for fuel economy, safety and quality.

As of Thursday evening, leaders of the survey in the five categories were:

Fuel efficiency - Toyota

Safety - Volvo

Quality - Honda

Performance - BMW

Best car - BMW

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.

Merkel said that GM’s recommendation — which would see
Magna’s Brussels-listed rival bidder RHJ International losing
out in the battle that has dragged on for months — is going to
be tied to conditions.

Although she said that those conditions would be manageable and
negotiable, doubts remain about whether this will be the new
beginning the company is hoping for.

“The most meaningful choice would have been a global company
that produces several millions of cars (per year), such as GM or
a Chinese producer. Magna is not a producer of cars in the
classic sense, and I could imagine that some other producers
could be upset about the decision. As a consequence, Opel may
lose some contracts,” said NordLB analyst Frank Schwope.

“This seems to be a political decision rather than an
economical one.”

What do you think?