F&I Management & Training

Ford Motor Company has begun seeking indicative bids from potential buyers of Volvo in a sale expected to last until late this year. The auction will be complicated by questions hanging over the state of the global car market and Ford's own finances. The Chinese government's ambivalence over foreign acquisitions by its fledgling car companies, at a time when it is calling on them to consolidate at home, adds another layer of uncertainty. It is understood that there have been tentative inquiries in acquiring Volvo from at least three Chinese carmakers.

DATED: 12.03.09

FEED: AW

Glass's, publisher of used car 'bible' Glass's Guide, and Motoring.co.uk, one of the UK's leading motoring websites, have signed a partnership agreement that will see the two organisations share data and collaborate on a number of new initiatives benefiting dealers and car buyers. As part of the agreement, Glass's will provide its customers access to Motoring.co.uk's pioneering online search facility, which enables consumers to quickly and easily find new vehicles based on their individual requirements, as well as investigate available options and current list prices. Visitors to Motoring.co.uk will also gain access to Glass's consumer used car valuation data, which is based on the information in Glass's Guide - relied upon by more used car dealers than any other pricing guide. Furthermore, Motoring.co.uk intends to recommend Glass-Net as its preferred application for uploading details of used car stock and will share details of its used car advertisements for use within Glass-Net's Market Price Comparison module. Launched by Glass's in February 2009, Glass-Net is an all-new integrated online platform that brings together and streamlines most of the day-to-day processes associated with valuing and appraising used car stock. Glass-Net's Market Price Comparison module allows dealers to monitor how competitively their used cars are priced against comparable stock within a defined radius. Recently acquired by Moneyextra.com, Motoring.co.uk has rapidly established itself as one of the UK's leading motoring players and boasts the second largest online car inventory. "We are already seeing some very positive outcomes resulting from this highly beneficial strategic partnership between two strong automotive brands," comments John Elsdon, Commercial Director at Glass's. "We are working closely on developing new web-based solutions that bring benefits to consumers and dealers alike." Richard Mason, Managing Director of motoring.co.uk said: "We're delighted to partner with Glass's and look forward to a fruitful relationship with a company whose brand values and work ethic reflect our own. Our online search facility is already making waves within the industry as it offers customers a more personalised shopping experience compared to traditional motoring websites. Our nearest competitor, Auto Trader, has always been in our sights and this deal uniquely positions us to steal their crown as the UK's leading car comparison website."

DATED: 12.03.09

FEED: AW

Carmaker Toyota says that staff at its UK factories will have their pay and working hours cut by 10%. The cuts will take effect on 1 April and will last for one year. They affect 4,500 staff at plants in Burnaston, Derby, and Deeside, Flintshire. Toyota said the measures would allow the company to "maintain employment in this difficult period". Car firms in the UK and elsewhere are cutting jobs and slashing production as the downturn hits car sales. Cutbacks The Unite union said that the cuts announced by Toyota would give their workers a measure of stability, although it said any decision to cut wages and working should not be taken lightly. "The agreement we have reached with Toyota will ensure none of our members' benefits are eroded and that these skilled workers will remain in place and at work ready for when the upturn comes," said Unite representative Peter Tsouvallaris. Carmakers have been forced to announce cost-cutting measures, including reducing production, freezing pay and stockpiling thousands of vehicles, in the face of a sales slump across Europe. More than 3,000 UK redundancies have been announced in recent months, with parts suppliers also hit hard. Redundancies? Toyota employs 3,900 workers at Burnaston, where the Avensis and Auris are made, and 570 at Deeside. Toyota has already suspended a night shift on its Auris production line and will shut production for a total of four weeks in 2009. It has already cut 200 temporary jobs and opened a voluntary redundancy scheme last week but has insisted big layoffs would not be necessary. "We have in no region in the world, in no manufacturing plant, made any large scale forced redundancies," Graham Smith, senior vice president, Toyota Motor Europe told BBC News in a recent interview, insisting that the company is fiercely protective of its skilled workforce. "That has tremendous value for a company like Toyota," he added. "We have to be ready when the upturn comes." Toyota has already said it will post the first group-wide annual operating loss - totalling more than £3bn - in its 70-year history. The company has scrapped annual pay increases and management bonuses.

DATED: 12.03.09

FEED: AW

Former Ford Motor and Mazda Europe executive James Muir will replace Erich Schmitt as head of Volkswagen's Spanish brand Seat, VW said today.Muir, a 50-year-old British national, will become chairman of Seat's management board starting on September 1.Schmitt, aged 62, will assume new responsibilities in the VW group, the company said. ...

DATED: 12.03.09

FEED: ANE

Peter Vardy is the only car retailer listed in the latest Sunday Times Best 100 Companies to Work For. Entering the survey at number 54 the fledgling group achieved a positive score of 81%. The Sunday Times attributed this rating to employees' reports that they felt they could make a difference in the company. The majority of staff said the chief executive Peter Vardy was an inspiration (77%) and 80% said they had lots of faith in him. A high proportion of employees had confidence in the leadership skills of senior management (78%) and many reported that managers talk openly and honestly with them (79%). Mr Vardy, son of Sir Peter and grandson of Reg, said his business principle was to treat employees as he would like to be treated. During a time when many car retailers are under pressure, 80% of Vardy employees said they felt little stress working at the company and 76% said they were excited about where the company was going.

DATED: 12.03.09

FEED: AW

Mazda Motor Europe CEO James Muir has left the Japanese automaker with immediate effect, the company said today. Chief Financial Officer Jeffrey Guyton has replaced Muir.Mazda said Muir, 50, is leaving the company to take up a new post outside of Mazda.Muir, a British national, had been head of Mazda's European operations since 2005. ...

DATED: 12.03.09

FEED: ANE

Inchcape is gearing up for an equity raising, according to reports.
The Daily Telegraph cites well-placed sources as revealing that Inchape and its bankers were visiting shareholders, including Blackrock, about the rights issue or placing.
Although the business is within its banking covenants, the company is thought to be keen to reduce its debt pile, which is in excess of £540m, says the newspaper report.

Inchcape confirmed in January that it was "evaluating a range of options for its capital structure, including a potential equity issue."
It is not known how much Inchcape is looking to raise from investors.

DATED: 12.03.09

FEED: AM

The Treasury is shelling out £27m of our money to build a new Land Rover. An interesting precedent...

Business Secretary Lord Mandelson announced this morning that he’s agreed to provide a £27m Government grant to ailing carmaker Jaguar Land Rover, to fund the production of a new, greener, vehicle. Mandelson said the cash will allow JLR to design, develop and build this new Land Rover at its Halewood plant in Merseyside (British jobs for British workers, and all that). The Government was keen to stress the ‘greener’ credentials of the new car today – but it must still be worried about opening the floodgates

The grant, which is on top of the complicated £2.3bn Automotive Assistance Programme already announced, is coming from the ‘Grant for Business Investment’ scheme – if (like us) you haven’t heard of it, it’s apparently part of the so-called ‘Solutions for Business’ package that you can access via your local Business Link. If it gets EU approval, JLR will use the money to churn out a ‘greener’ version of its Land Rover LRX model – specific details were noticeably thin on the ground, but we’re told it will be ‘far more fuel and CO2 efficient’. So that’s all right then.
Of course, you might argue that £27m is a drop in the ocean in terms of Government spending. After all, at midday today, the Bank of England is set to launch its quantitative easing scheme, an ambitious attempt to inject £75bn of new money into the financial markets in just three months. And Mandelson was doing his best to put a positive green-wash on today’s decision, insisting that the Government was ‘fully committed to supporting the UK automotive industry as it moves to a lower carbon future’ and claiming that this was ‘an important investment for the future’.
The problem is, of course, that it sets a dangerous precedent. After all, Jaguar Land Rover is hardly the only company in difficulty at the moment. For instance, this week credit ratings agency Moody’s has published a list of all the companies it thinks might go bust in the next year (for reasons best known to itself – perhaps so it can’t be accused of being asleep at the wheel again); it includes famous names like Krispy Kreme, Readers’ Digest and Kodak (which presumably make Moody’s a Kodak bear). Why should some of these get a handout and not others?
Yesterday some unusually positive comments from Fed chief Ben Bernanke and encouraging revenue figures from Citigroup boss Vikram Pandit prompted a bit of investor optimism, with global stocks enjoying their best day in months. The rally is likely to be short-lived but a few companies might also be feeling more optimistic now about their chances of tapping the Government’s coffers

DATED: 12.03.09

FEED: MGT

As Cattles' share price plummets again, the City's reputation is dealt another painful blow...
More woe for Cattles on Tuesday: the sub-prime lender posted its third profit warning in three weeks and announced that it had suspended another three of its senior execs over possible accounting irregularities. Its books are clearly in a mess: it's now going to have to restate its 2007 financial results (when it supposedly recorded pre-tax profits of £165m), and it’s forecasting a 'significant loss' for 2008. Oh, and it's also breached its banking covenants, which could lead its own lenders to demand immediate repayment of their loans. As a result, the company's whole future - and that of its 4,000 staff - is at risk. Not exactly the kind of story that will restore the City's good name.

Cattles’ woes are not entirely surprising: its business model involves borrowing money on the wholesale market and then lending it to people with poor credit histories. So it could hardly have been in a worse position as the housing and credit markets deteriorated. It looks like a classic top-of-the-market business: it grew rapidly in 2006 and 2007, as the high street banks started to get a bit nervous about sub-prime lending, but is now suffering as growing numbers of its cash-strapped customers default on their loans. Fancy that...
But it’s not just the business model that’s the problem. The beleaguered group said today that the group’s FD, along with the chairman and the risk director of its Welcome Financial lending division (which brings in most of Cattles’ revenue) have all been suspended, pending a ‘forensic review’ of how impairment charges were being applied. Following on from the suspension of Welcome’s MD, FD and operations director last week, this means the division’s entire management team is now under a cloud.
For Cattles, the end result is another profit warning and a breach of the terms on its bank loans – it’ll now be forced to go cap-in-hand to its bankers to ask for some breathing space while it gets its house in order. It looks as though its credit rating will soon be as chequered as most of its customers. It's also seen another 14% wiped off its share price today, having already lost about 99% of its market value this year. Ouch.
It’s an episode that may fatally damage Cattles’ reputation, and it won’t do much for the City’s either – lots of people are already convinced the Square Mile is full of crooks, and episodes like this will do nothing to disabuse them of that notion...

DATED: 12.03.9

FEED: MGT

Labels: Delayed Drafts

German carmaker Opel should consider entering insolvency, the country's interior minister has said. Modern insolvency law was "not set up for the destruction but for the preservation of economic assets", said Wolfgang Schaeuble. The comments came as executives from Opel and its parent General Motors (GM) met government officials and promised more details on a restructuring plan. Opel has calling for a cash injection from Germany to help its survival. But Mr Schaeuble said that insolvency was a better option for Opel than relying on a state handout - and that such a move would not mean that it would have to go bust. "The public perception is that insolvency is associated with going bust or bankruptcy," he said. "But that is wrong. We must grasp that to survive such a crisis, modern insolvency rules are a better solution than the state taking a stake." 'No business plan' Like most global carmakers, Opel is suffering from a slump in sales. The company announced last week that it needed the money to avert plant closures and job losses among its 26,000 employees in Germany. Media reports suggest that the German government was angry that the bail-out proposal - which asked for 3.3bn euros (£2.93bn; $4.16bn) - was simply a glossy 217-page brochure which read like an advertisement, rather than presenting any viable business plan. Finance minister Peer Steinbrueck said the plan was "no basis" for the government to make a decision on whether to grant state aid. However, after an hour of talks on Friday, which German economic minister Karl-Theodor zu Guttenberg said were "open, good and constructive", the government said it was ready to review proposals. GM Europe's president, Carl-Peter Forster, who is also head of the Opel supervisory board, said GM and Opel would endeavour to supply all the information which the German government had requested. Cutbacks German media have also reported MPs saying, off the record, that they were "shocked" to learn that Opel did not have any assets - with all factories being owned by GM in the US. Separately, there is confusion about whether Opel owns the intellectual property (IP) information about its vehicles. Deputy economic minister Dagmar Woehrl told parliament on Wednesday that GM had pledged the IP of Opel as security against capital injections it had received from the US government. Trade union leader Armin Schild, who is on the board of Opel, said that both firms could use the IP without having to pay royalties. But it has raised concerns that it could be sold on by GM. GM Europe proposed last week that Opel should be partly separated from its parent company's US operations. Such a move would require financing that GM is unable to provide. The US carmaker, which was toppled by Toyota as the world's top-selling car firm earlier this year, is trying to wind down some of its European operations as part of a massive cost-cutting exercise.

DATED: 08.03.09

FEED: AW

Renault-Nissan chief Carlos Ghosn has called for the European Union to take a more proactive role in co-ordinating aid for the continent's carmakers in the face of nationally-led bail-out plans. While acknowledging that one or more European carmakers could soon fail, Mr Ghosn also warned against the danger of individual governments intervening on behalf of carmakers. He said: "Europe cannot just blame national governments for taking initiatives and not take any initiative itself." He added: "Governments should help eliminate the obstacles on the car industry as a whole, not intervening on one particular carmaker." Brussels has so far resisted calls from the motor industry to devise a Europe-wide framework for aiding the sector.

DATED: 08.03.09

FEED: AW

Audi chairman Rupert Stadler says he expects a slow recovery in car sales by the end of the year and has called on managers to stop 'moaning' about the crisis that is engulfing the motor industry. He has predicted that the last three months of 2009 could see the first signs of a reversal in the downward sales trend. Mr Stadler said: "I do not give up my glimmer of hope, which is that we will see the light at the end of the tunnel by the end of 2009 or the beginning of 2010." He wants managers to be more optimistic saying: "There is always light and shadow. We have two ways. We can all join in the moaning, or we can make a virtue out of the plight. I am rather doing the latter, looking forward and taking care for some optimism."

DATED: 08.03.09

FEED: AW

The IAM (Institute of Advanced Motorists) wants MOT fee increases to be used to fund reminders to motorists when their MOT is due. The call comes as MOT fees are set to increase for the fifth year running. Since 2004 the cost of an MOT has gone up by one third leaving motorists to fork out an extra £13.25 for no obvious improvement in service. The new MOT fees are currently out for consultation from VOSA, the Government's vehicle testing agency. IAM Director of Policy and Research, Neil Greig, said: "Motorists have faced constant test fee increases for the past five years, each one above inflation, but they have not seen much improvement in the service. "VOSA could add value for money by sending out reminders to motorists when their MOT is due, just as the DVLA do with car tax and insurance companies do for insurance. This would cut down on the number motorists who forget that their MOT has expired and continue to use the roads in a technically illegal and potentially unsafe vehicle." An IAM survey in 2007 found that 32 per cent of motorists had forgotten when their MOT was due and continued to drive - and break the law - without realising it. It also found 71 per cent think it would be a good idea for garages to send out reminders. The MOT system is now fully computerised and linked to other databases but there are still no plans to issue motorists with simple reminders that their MOT is due.

DATED: 08.03.09

FEED: AW