F&I Management & Training

There is "substantial doubt" about the ability of General Motors (GM) to stay afloat, the firm's auditors have said. Ongoing losses and the struggle to generate cashflow meant the firm's ability to continue as a going concern should be questioned, they added. Last week GM posted a $30.9bn (£21.9bn) loss for 2008 and warned that 2009 was set to be "challenging". The firm, which plans to cut 47,000 jobs also said it might need another $22.6bn in government loans to survive. It has already received $13.4bn in federal loans as it struggles in what analysts say is the worst vehicle sales market in 27 years. Step in "The corporation's recurring losses from operations, stockholders' deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern," auditors for Deloitte & Touche wrote in the annual report. The auditors' remarks reflect comments already made by the firm about its dire difficulties. Earlier this week, GM's top executive warned the European divisions of General Motors (GM) could collapse within weeks without European governments' help - costing up to 300,000 jobs. Chief operating officer Fritz Henderson said governments should step in immediately to ensure GM Europe did not run out of money by April or May.

DATED: 06.03.09

FEED: AW

Jaguar Land Rover workers have decided to take a one-year pay freeze and move to a four-day week in an attempt to save jobs. Workers' unions balloted the firm's 15,000 staff over the cost-saving measures. A total of 70% of the Unite and GMB union members accepted the deal which will save the firm £70m a year. The car manufacturer offered the deal last month in return for no compulsory job losses for two years. Based in Gaydon, Warwickshire, Jaguar Land Rover employs about 15,000 people at its sites in Castle Bromwich, Coventry and Solihull in the West Midlands and Halewood, Merseyside. Jaguar Land Rover, which is owned by Indian firm Tata, cut 450 jobs in January. The agreement includes a pay freeze until 2010 and a four-day week at the plants. However, the firm has promised that in return there will be no compulsory redundancies in the non-management workforce in the UK over the next two years. There will also be no bonus payments for 2,400 employees, which had been planned for this year. The company said a training programme which had been related to non-work issues will also be suspended and fewer agency staff would be taken on in the future. A joint statement by Unite and the GMB said they did not want their members at Jaguar Land Rover (JLR) to "face the same fate as thousands of others". 'Loyal workforce' It said: "Our members in JLR deserve better - much better. "The management agreed with our view that, when this unprecedented recession ends, the retention of a skilled and loyal workforce is an integral part to the ongoing success of this business." Jaguar Land Rover chief executive David Smith said he was pleased the company and the unions had been able to work together on "such sensitive issues". He added: "It also confirms our determination as a team to steer Jaguar Land Rover through these extraordinary and challenging times, so that our business is ready to take advantage when the downturn finally ends." The ballot result came as figures of new car sales were released. Overall in February, new car sales in the UK fell by 22%. However, Jaguar sold 360 new vehicles last month - more than double the figure it sold in February last year. Land Rover, though, saw its sales last month go down 21% compared to February last year.

DATED: 06.03.09

FEED: AW

'This latest interest rate reduction means that consumers will have a greater disposable income, which we hope will engender greater confidence,' said Sue Robinson, Director of the Retail Motor Industry Federation (RMIF), representing 8,000 businesses in the UK's retail motor sector including new and used car dealers, commenting on the announcement today (Thursday 5 March 2009). The UK interest rate has been reduced to 0.5 per cent from 1 per cent. Robinson continues: 'With a greater disposable income, many consumers should now feel more confident about major purchases. Car dealer showrooms are now providing a wide range of 'value-for-money' deals on financial packages as well as new and used car stock.'

DATED: 06.03.09

FEED: AW

BMW chief executive Norbert Reithofer has warned against government intervention in the motor industry, saying it could lead to a situation where there would be only two independent carmakers left in Europe. He fears that bailouts of manufacturers could lead to irrational consequences and the wrong businesses being propped up Mr Reithofer said: "There is a danger that we will have only one or two independent manufacturers and the rest will be state or semi-state companies." Highlighting that BMW would be one of the two, he believes that the underlying cause of the crisis in the motor industry is overcapacity. Meanwhile, Dieter Zetsche, chief executive of Daimler, has said that state help was only acceptable where it was a bridging loan for an otherwise healthy company. He said: "Every industry needs structural development and this is not something that should be influenced in the long-term by governments."

DATED: 06.03.09

FEED: AW

05 March 2009

Bank of England Reduces Bank Rate by 0.5 Percentage Points to 0.5% and Announces £75 Billion Asset Purchase Programme

The Bank of England’s Monetary Policy Committee today voted to reduce the official Bank Rate paid on commercial bank reserves by 0.5 percentage points to 0.5%, and to undertake a programme of asset purchases of £75 billion financed by the issuance of central bank reserves.

Bank of England Reduces Bank Rate by 0.5 Percentage Points to 0.5%

DATED: 06.03.09

FEED: BoE

Camden Group Services' retail division has ceased trading.
As a result of the closure, five dealerships have shut their doors at Dunstable, Milton Keynes, Aylesbury, Northampton and Corby, with the loss of 277 employees.
Camden's used car business Camden Carstore has also closed.
Administrators Zolfo Cooper are currently working through orders and aim to get vehicles delivered to customers over the next couple of weeks.
In instances where cars cannot be delivered, customers will be offered a refund on their deposits.
Any cars in the service centres are being returned to customers and they have all been contacted directly.
The news follows a deal made with Paragon Automotive, the UK fleet vehicle processing and management company, to acquire the Fleet Solutions side of Camden for an undisclosed sum.
This part of the deal has secured 370 jobs.
Alastair Beveridge, partner at Zolfo Cooper, said: “In the context of recent turmoil in the automotive industry, this deal represents a positive outcome for creditors and employees of Camden Fleet Solutions.
Paragon Automotive has an established background in the fleet industry and is well-placed to take the business forward.
“We are grateful to all staff, whose dedication and commitment has enabled us to continue trading the business throughout the administration process.”

As part of the deal, Paragon has purchased 150 acres of land and vehicle processing facilities across two of the company’s sites at Islip and Corby in Northamptonshire.
Paragon has also acquired Camden’s stake in a joint venture in Livingston, Scotland.
Stephen Hucklesby, managing director, Paragon Automotive, said: “We believe the deal adds significant strength to our existing vehicle processing business, and despite the challenging trading conditions that the industry as a whole is experiencing, we have confidence that our enlarged business can weather the storm.
“We look forward to working with our new colleagues as we plan for the long-term future of our combined businesses.

DATED: 06.03.09

FEED: AM

South-west dealer group Blade has stepped in to acquire the three Amethyst Honda dealerships which went into administration back in October 2008.
The Chippenham and Gloucester sites are open now for new and used car sales and servicing, while the site in Cheltenham will be a used car and service operation.
Since Amethyst closed in October, neighboring Honda dealers have had to provide support for customers in the area.
Philip Crossman, head of network development at Honda (UK), said: “We are delighted the sites are open again in business. It was really important for us to revive these dealerships in an area close to where we build cars at Swindon.”
Blade Motor Group already has two Honda motorcycle dealerships and also has franchises with Volkswagen, Audi and Alfa Romeo at four sites in the south west.
Jerry Martin, Blade group operations manager, said: “We already had an excellent relationship with Honda through our motorcycle division and are delighted to be adding Honda cars to our portfolio, a move which further strengthens our position in these locations.”

DATED: 06.03.09

FEED: AM

Toyota, the world's biggest car maker, has said it is seeking a state loan to help its car financing unit. The company said Toyota Financial Services was in talks with the government-backed Japan Bank for International Co-operation. Local media reports said that it had applied for a 200bn-yen ($2bn; £1.45bn) loan. However, Toyota said no details had been decided. Toyota has said it expects to report its first annual loss since 1950. The Japan Bank for International Co-operation was set up last year to help struggling Japanese businesses. Japan's Finance Ministry said earlier on Tuesday that it would provide an additional $5bn to the bank from its foreign exchange reserves. Carmakers in the US have been given government support as the credit crunch has made it harder to offer financing and the economic downturn has hit demand for vehicles. General Motors financing arm GMAC has been hit by losses and has received a $6bn bail-out from the US government.

DATED: 03.03.09

FEED: AW

Details of a plan to save the LDV Vans factory in Birmingham from closure are to be unveiled to workers. Up to 850 jobs have been under threat after the production line was halted before Christmas because of a downturn in global van sales. A proposal for a management buyout is to be detailed at the meeting, which will be attended by union leaders who have been involved in talks. Erik Eberhardson, buyout leader, said it is vital to the firm's survival. Earlier this month, the government turned down a bid by the firm to secure up to £30m in a bridging loan, prompting Russian parent firm, Gaz, to warn hundreds of jobs were at risk. Mr Eberhardson said there were "important steps" to take in the next few days to ensure the buyout goes through. 'Best solution' "The next key action is to consult the employees about their support for it," he said. The management team has been in discussion with the trade unions and expect these to conclude [later]." Mr Eberhardson said those discussions were "progressing", but there would be no "major developments" unveiled at the meeting. "I remain confident that the buyout can offer the best solution for the British economy, LDV, its employees and suppliers and the management team and I are doing everything in our power to deliver the plan," he said. A spokesman for the Unite union, whose officials will attend the meeting, said the firm was in a "serious" situation. "We are still looking for the government to provide short-term funding while a longer term solution is found," he said.

DATED: 03.03.09

FEED: AW

About 1,100 jobs will be secured on Wearside with the production of Nissan's newest model, says the firm. A concept version of the Qazana, a five-door car, is being unveiled at the Geneva Motor Show on Tuesday. The production model will be built at the company's Sunderland factory from mid-2010 - the same year that the plant is due to cease work on the Micra. Construction of the Qazana will maintain existing jobs rather than creating new ones, said Nissan. It will also secure 2,000 jobs in the "local supply base", according to the firm. Trevor Mann, Nissan's senior vice-president for manufacturing in Europe, said: "What we need to make sure is that the car is translated from the concept into a very good product in terms of design and quality at the right cost." He added: "This is not a replacement Micra as such, but it will obviously be a replacement in workload for the fantastic workforce we have at the plant in Sunderland. "We wouldn't anticipate a significant growth in jobs by this product but certainly it secures employment for the life of this model which would be another four or five years beyond 2010." In January, Nissan announced it was cutting a quarter of its 4,900-strong workforce at Sunderland, blaming the worldwide downturn in car sales. But Mr Mann said he believes the market will be stronger by the time the Qazana goes into production. He said: "There isn't a global downturn that hasn't actually turned back on itself and we believe the Qazana is the right product for the market."

DATED: 03.03.09

FEED: AW

The AA has joined calls for a scheme which would pay motorists to trade in their old cars and buy new ones. Support for the programme, already backed by motor manufacturers, comes amid fears new registration sales will not sufficiently boost the industry. But the government has said it was unsure the "scrappage" scheme would provide value for money. The 09 registration plates have gone on sale but analysts expect a low-take up as consumers tighten their belts. Several car firms have had to cut jobs and reduce workers' hours in response to slowing demand. Green incentive The "scrappage" scheme has been adopted in several European countries. As well as giving a boost to the carmaking sector, which is among the industries suffering most in recession, many believe it could also help meet targets for cutting greenhouse gases. In Germany, drivers get 2,500 euros (£2,220; $3,170) for trading in a car more than nine years old, while in France motorists can receive up to 1,000 euros. Scrappage has also recently been introduced in Spain. "There will be fewer new registration plated cars on the road than for many years and this will be a very visible example of how the credit crunch and hard economic times have slashed new car sales," said AA spokesman Paul Watter. "There is no time to lose in introducing a scrappage scheme which is adopted policy in a large number of European countries. "We must give a boost to the sale of new cars which are cleaner and safer than the ones they replace." 'Committed' The number of new cars registered in the UK in January declined 30.9% year-on-year, according to industry figures, worse than December's contraction. February's figures are due to be published this week. The Society of Motor Manufacturers and Traders (SMMT) has also been pressurising the government to offer financial help to owners of older cars to persuade them buy newer models. Last month, chief executive Paul Everitt said there was "a clear need to stimulate demand for new vehicles in the UK market". And a spokesman said the industry remained "firmly committed to the introduction of a workable scrappage scheme".

DATED: 03.03.09

FEED: AW

GM-owned Vauxhall has confirmed that it is searching for private investors following its parent company’s decision to launch it as part of an independent business.
GM Europe is to outline a proposal to European governments today which will see up to half of Opel/Vauxhall being acquired from outside investors. GM has confirmed that it will retain a remaining stake in Vauxhall/Opel.
Carl-Peter Forster, head of GM Europe, said the new entity is seeking €3.3bn (£2.9bn) in aid from European governments and will also get €3bn from GM.

The new Vauxhall/Opel business unit is also looking to make €1.2bn in cost cuts as it lowers capacity.
Vauxhall’s UK plants in Ellesmere Port and Luton are likely to come out of the restructuring unscathed, according to a source close to the company.
Government frees up £2.3bn
GM’s announcement follows the European Commission’s approval of the UK government’s plans to offer £2.3bn worth of lending for its automotive industry.
The Society of Motor Manufacturers and Traders (SMMT) welcomed the government’s announcement but urged for immediate action on outstanding proposals aimed at stimulating market demand.
Paul Everitt, SMMT chief executive, said: “The clearance of state aid to support the automotive sector is an important step in sustaining the UK motor industry, but the need for short-term measures to kick-start demand in the market remains critical.”
Everitt said there was real need to ease consumer credit and attract customers back into showrooms.
He said: “Across the EU, member states have introduced scrappage incentive schemes which have already proved successful in their ability to stimulate demand and minimise the impact on manufacturing and retail jobs. It is vital the UK government reflects the action and pace of support given across Europe to ensure the UK remains globally competitive.”
Following approval by the European Commission, automotive companies throughout the supply chain can now begin accessing the £1bn of UK loans and loan guarantees and the £1.3 billion of European Investment Bank (EIB) funding announced on January 27. However, eligibility criteria and access routes are still to be clarified.

DATED: 03.03.09

FEED: AM

GM-owned Vauxhall has confirmed that it is searching for private investors following its parent company’s decision to launch it as part of an independent business.
GM Europe is to outline a proposal to European governments today which will see up to half of Opel/Vauxhall being acquired from outside investors. GM has confirmed that it will retain a remaining stake in Vauxhall/Opel.
Carl-Peter Forster, head of GM Europe, said the new entity is seeking €3.3bn (£2.9bn) in aid from European governments and will also get €3bn from GM.

The new Vauxhall/Opel business unit is also looking to make €1.2bn in cost cuts as it lowers capacity.
Vauxhall’s UK plants in Ellesmere Port and Luton are likely to come out of the restructuring unscathed, according to a source close to the company.
Government frees up £2.3bn
GM’s announcement follows the European Commission’s approval of the UK government’s plans to offer £2.3bn worth of lending for its automotive industry.
The Society of Motor Manufacturers and Traders (SMMT) welcomed the government’s announcement but urged for immediate action on outstanding proposals aimed at stimulating market demand.
Paul Everitt, SMMT chief executive, said: “The clearance of state aid to support the automotive sector is an important step in sustaining the UK motor industry, but the need for short-term measures to kick-start demand in the market remains critical.”
Everitt said there was real need to ease consumer credit and attract customers back into showrooms.
He said: “Across the EU, member states have introduced scrappage incentive schemes which have already proved successful in their ability to stimulate demand and minimise the impact on manufacturing and retail jobs. It is vital the UK government reflects the action and pace of support given across Europe to ensure the UK remains globally competitive.”
Following approval by the European Commission, automotive companies throughout the supply chain can now begin accessing the £1bn of UK loans and loan guarantees and the £1.3 billion of European Investment Bank (EIB) funding announced on January 27. However, eligibility criteria and access routes are still to be clarified.

DATED: 03.03.09

FEED: AM

Japanese compact car specialist Daihatsu has increased its dealer network in Derbyshire, following the appointment of Farmers Garage.
The new franchise will join Subaru and Proton at its showroom in Matlock.
Dealer principal, Lesley Farmer, said: “Despite the challenging trading conditions, we hope to not only generate repeat business from satisfied customers but also to win new converts.
“This has helped us build up a loyal band of customers who have tended to stay with us over the years – very useful in these testing times.”
The Coleshill-based importer signed up 20 new dealers during 2008 and currently boasts 98 UK showrooms.
5/5/5
Meanwhile, Daihatsu is offering its 5/5/5 offer on Terios, consisting of five years free servicing, five years warranty and five years roadside assistance on registrations up to March 31.

DATED: 03.03.09

FEED: AM