Confidential

Toyota drivers are safer than they think

2010-03-18T15:21:40Z

A little birdie with very big wings told me some fascinating stuff about the Toyota recall crisis recently. It was in direct response to what I wrote in the mag this week about Toyota having to fit black box data recorders to its roads cars “to protect itself in court against its own customers.”

According to my source this is not, and never will be, the reason why Toyota fits data recorders to its cars. Toyota, says the source (and you can probably guess which Japanese car company he works for), has and never will do anything to actively protect itself against its customers.

Toyota Auris 1.6 first drive

In reality, in fact, it’s the other way round, which is why the data stored on Toyota’s black boxes is encoded and can only be read by Toyota’s engineers - ie, not by the authorities – not unless they demand to see the data in Congress, which is unlikely to happen when arguing over a speeding fine or a bit of lairy driving, let’s face it.

There are plenty of other manufacturers who aren’t anywhere near as protective of their customers as Toyota when it comes to the storage of potentially incriminating data. There are some supercars which store all the data in the car's on-board computer and, should you get involved in a high-speed incident it wouldn’t present the authorities with any real difficulties should they decide to take a look.

Do the same in an Avensis and the info stays with you and Toyota alone. For the time being…

For most of us who value living in a free, fair and democratic society, that surely is to be regarded as a good thing?

BMW goes back to an alternative future

2010-03-18T10:13:56Z

I would like to have been at yesterday’s BMW financial press conference to hear CEO Norbert Reithofer admit that the BMW brand was gearing up to produce a range of small front-drive cars.

The carmaker has agonised over the front-wheel drive question before. In the early 1990s, BMW built a number of front-drive 3-series prototypes. Back in those days, before the premium brand boom, BMW was a much smaller company.

FWD baby BMW range confirmed

While BMW’s new boss Bernd Pischetsrieder was convinced BMW needed to expand into more market niches, he thought it should not be done under the BMW roundel.

In 1992-3, Land Rover approached BMW, wanting to buy the company’s new straight-six turbo diesel engine. BMW asked Land Rover’s owners, British Aerospace, whether it would sell Land Rover.

BAe said it would offer the whole Rover Group to BMW for £800m, big money back then. BMW snapped the company up in February 1994, delighted to get Land Rover, Range Rover, Mini and the front-drive Rover brand.

Of course, BMW soon had plenty of time to repent when it unwrapped the endless problems suffered by ‘the English patient’ and also found itself paying substantial licence fees to Honda in order to keep building Rover’s Honda-based cars.

Indeed, when BMW broke up Rover Group in 2000, the reason it gave was that instead of finishing the development of the planned front-drive Rover R30 model, it would now build an entry-level car under the BMW brand. So Rover was no longer needed.

The R30-derived 1-series was, of course, rear-wheel drive, and when it was launched BMW ran a series of punchy ads claiming the superiority of rear-drive, calling it ‘standard drive’ to underline the point.

So it seems quite ironic that BMW has arrived back at the philosophical point the company was at in 1993. Should it build front-drive models under the BMW badge, or stick to using a separate (in this case Mini) brand?

Although the market has changed massively, if BMW had decided back in 1993 that it could take the risk and build a front-drive BMW, it would have saved itself a huge amount of trouble.

Amusingly, Reithofer’s announcement was almost 17 years to the month after BMW bought front-drive Rover but singularly failed to buy the actual front-drive technology.

Still, at least the new baby BMWs will be based on a new front-drive platform that is 100 per cent pure Munich. And by the time they’re launched in 2014, it will two decades since BMW made the fateful decision not to build its own front-drive cars.

Porsche Panamera cabriolet - why?

2010-03-12T09:55:40Z

What is it with German carmakers and four-door cabriolets? Our discovery of patent drawings for a topless Porsche Panamera is the latest in a series of wild proposals that started with the very limited run Maybach Landaulet.

In 2007 Mercedes revealed the Ocean Drive, a true four-seater convertible with a folding fabric roof. The global crunch probably but paid to that S-class based idea, but there are also rumors around that Audi would like to do something similar on its upcoming A7 big four-door fastback.

Aside from a signs of a weird fascination with classic four-seat, four-door convertibles such as the 1960s Lincoln Continental, the German carmakers seemed to be doing nothing more useful than making life very difficult for their engineers.

Trying to make a respectably stiff car out of a structure with no roof pillars and two door apertures on each side must be close to impossible. A secondary bulkhead directly behind the front seats has to be a possibility.

And then imagine designing a roof long enough to stretch from boot to windscreen that’s also neat enough to be bundled up without robbing all the boot space.

It’s no surprise that the Maybach retained its roof cant rails and rear roof pillars and had a secondary bulkhead in an attempt to retain some semblance of rigidity.

The engineering challenges involved in converting the Porsche will be complex and expensive. And is what would inevitably be labeled a Monaco cruiser really be a suitable addition to the Porsche stable?

Forget it chaps. What we really want to see spun off the Panamera is a 928-style coupe and cabrio, good enough to make buyers think twice about the Ferrari 599.

Technorati Tags: Porsche Panamera, Maybach, Mercedes S-class, Ocean Drive

Why is BMW 'premium downsizing'?

2010-03-10T15:56:02Z

‘Premium downsizing’ is one of the hottest buzzwords in the car industry. The theory is that premium car buyers are willing to either drive smaller cars or drive the same size car with a smaller engine.

The first ‘premium downsized’ car was probably the Mercedes A-class back in 1998. Although technically innovative, the project ran up huge losses for Mercedes. The new-generation A-class will be more conventional under the skin and spawn a wider choice of models.

BMW, fresh from its disastrous ownership of Rover Group, was sure that it would never put its badge on a front-drive car. The 1-series – effectively a downsized 3-series – was probably the smallest a rear-wheel drive car could be.

Indeed, it was christened 1-series to prove that BMW would never build a smaller car, a move backed up by a series of punchy ad campaigns declaring rear-wheel drive to be ‘standard’. Anything else, BMW suggested, was an aberration in a premium car.

So the news that BMW looks set to build its own baby front-wheel drive car (based on the next generation Mini) is a massive about-face for the company. The reasons why are not clear.

Does BMW need to bolster its Mini operation, by boosting the number of cars produced on the (expensive and sophisticated) Mini platform? Does it perceive a real threat from the pint-sized Audi A1? Is the premium downsizing trend more marked than the industry guessed?

One thing is more certain. Premium carmakers no longer believe that size matters. Small and sophisticated can command premium prices. Indeed, if an entry-level Mini can sell for £11,000, an entry level Mini-based BMW could probably command £13,000 or more, a very handy price premium.

And there could be more to come from the Mini stable. At Geneva there was plenty of industry chat around BMW’s not-quite-dormant Triumph and Riley brands. Could the Mini operation be further expanded via a notchback Riley Elf, or a baby Triumph Roadster based on the Mini cabriolet?

Perhaps BMW will stop at nothing to expand its 250,000 a year front-drive Mini production towards 500,000 and long-term financial health.

Whatever happens, it’s unlikely BMW will downsize quite a far as the Triumph Spitfire Roadster pictured here. Small and sophisticated is one thing. Spartan is quite another.

Technorati Tags: BMW, Mercedes, Audi, , Triumph

All change at Merc?

2010-02-07T20:19:00Z

The news that Wolfgang Bernhard is going to head up Merc’s van division and production caught my eye.
Bernhard, you see, is a disciple of Daimler boss Dieter Zetsche. The old man took him to Detroit to help run Chrysler after the Daimler Chrysler merger, and Bernhard also has run the VW brand and, ironically, been integral in Cerberus’s takeover of Chrysler when Daimler abandoned ship.

The reason his appointment caught my eye is that there have been a lot of rumours that Zetsche won’t be running Merc for too much longer. It's nothing to do with his effectiveness as the boss, mind you, but tragically his wife has recently lost a battle with cancer. And who could blame him for feeling differently about work after such a loss?

So perhaps Bernhard is being groomed to be his replacement. One thing’s for sure, Wolfgang has a reputation for being fiery and uncompromising. He was, after all, being lined up to run Merc’s car division in 2004 but a row with then-boss Juergen Schrempp ruled him out. His undoing at VW was the result of a big falling-out with Bernd Pichetsrieder because Bernhard wanted more radical restructuring plans that the board or unions would swallow.

I’ve also got some personal experience of his personality. He once told me that he didn’t think any cars would be made in Western Europe within 20 years (maybe best keep that quiet in Stuttgart for a while) and while at VW, he pretty much walked out of an interview with me and European editor Greg Kable because we were asking him about the company’s sports car plans.

There's no doubt that Bernhard’s got a good track record, though. But if he does land the big job soon you can probably expect radical changes to in the Daimler empire.

The rebirth of MG

2010-02-03T11:53:58Z

Just as our Chinese colleagues were getting their first taste of the new MG6, I was spearing up the M40 on my way to my first visit to Longbridge for nearly a decade.

Ironically, my last visit was to see the results of MG’s rebirth at the hands of the Phoenix Four. We were shown the MG R, S and T which were all whizzed up versions of the rather more prosaic Rover products.

But with MG’s new owners SAIC now in charge of Longbridge I didn’t know what to expect.

Admittedly the place still feels like a shadow of its former self – after all no cars are currently being produced here apart from a handful of MG TFs. But talking to the men now running the company there’s a huge sense of optimism that Longbridge’s glory days are far from over.

European versions of the new MG6 saloon will be rolling off of newly built Longbridge lines by the end of the year and there are more models in the pipeline.

The thing that really gives me hope though is that the West Midlands plant is now SAIC’s worldwide R&D centre and a new design HQ is just about to be opened.

That means Brits will be designing and engineering cars for a company that makes close to three million cars a year. And, let’s face it, with the Chinese car market set to expand further that number is likely to get a lot bigger.

In other words even if Europeans don’t take to the reengineered MG6 saloon, there could well be plenty of life in Longbridge for some time to come.

Technorati Tags: MG6, Mg, Rover, Longbridge, SAIC, China

MG Rover's link to Westfield

2010-01-28T17:39:00Z

It’s often the smaller stories within the industry which are the most interesting. Take Potenza’s acquisition of Westfield back in 2006, for example.

You’ve probably never heard much about Potenza, but the firm’s beginnings could prove significant in shaping the future direction of Westfield.

Potenza Technology was set up in 1999 when BMW closed down MG Rover’s hybrid and electric research unit. Paul Faithfull was one of the leaders of Rover’s future technology research and thought the now defunct British company was onto such a good thing, he decided to take on its R&D in his own company.

At the time, says Faithfull, Rover’s research was the most advanced in the world. “The problem was,” he says, “the market wasn’t ready for the tech and the costs were too high, so we couldn’t do anything”.

So what was going on at Longbridge and on university campuses in the West Midlands? Faithfull revealed to me three of Rover's behind closed doors projects which never saw the light of day.

His team created two all–electric Metros and a military-spec Defender hybrid that was partly powered by batteries from on-board army radios. Most interesting of all though was the Highlander, a short-wheelbase Defender which had an electric motor powering each wheel.

It could get from 0-60mph in just 4.5sec. These projects would be impressive today, let alone 10-20 years ago.

Despite the romantic images of British engineers conjuring up the equivalent of 20th Century automotive witchcraft, there was no fairytale ending to Rover’s electric development. Off BMW went, armed with many of the patents.

Potenza set about on consultancy work for clients. Then it acquired Westfield and it could back to what it does best.

Faithfull has five electric Westfields up his sleeve, the first of which is the iRacer. This has two electric motors providing direct drive to each rear wheel and has a centre of gravity of a Formula One car.

So convinced with the benefits of electric technology for Westfield, Faithfull is prepared to build the future of the company around it and move away from the constant Caterham comparisons.

“I don’t want us to be compared to Caterham any more,” he says. “We want a whole new style and look. We want cutting-edge radical design and this is a real market opportunity.”

Technorati Tags: Westfield, Caterham, iRacer, BMW, MG Rover, Land Rover, Defender

What went wrong for Saab?

2010-01-26T17:38:00Z

In hindsight, Saab could never have prospered as the most distant member – in terms of both intellectual approach and physical distance – of the General Motors family.

It suffered two distinct decades of muddle and under-investment.

GM closes Saab

A brief history of Saab

When GM swept in and snatched 50 per cent of Saab from under Fiat’s nose in 1990, the Swedish carmaker hardly benefitted. GM’s components bin contained little worthy of a premium brand.

The 1993 900 was a brave effort with poor hand, but the split of ownership between GM and the Swedish Investor Group meant investment in new products was comically lacking in the 1990s.

While other premium brands expanded massively on the back of a mass roll-out of new products, Saab remained stuck with just four distinct models. Low volumes and unique engineering further undermined Saab’s business case.

At the beginning of the decade, GM took full ownership and Saab tried to begin a new chapter with the 2003 9-3.

However, extensive modification of the Vectra components package it was designed to be based on was costly and caused a rift with GM management that never fully healed.

GM continued to keep Saab on an investment drip feed and compounded the farce by pitching Saab into short-lived alliances with both Subaru and Fiat Auto. Selling cars into the US from Sweden was also rarely profitable for much of the last decade.

Looking back, it was probably the last-minute cancellation of the first 9-5 replacement in early 2005 that was beginning of the end under GM ownership. A co-production with Alfa Romeo, Saab designed the all-new Premium platform and finalised the 9-5 replacement.

But GM’s exit from its Fiat Auto alliance resulted in the new flagship Saab being binned at the 11th hour.

Saab never recovered. By 2009, the current 9-5 was 12 years old and the 9-3 six years old. Although the new 9-5 and 9-4X SUV are finished and ready for the showroom, the global recession and GM bankruptcy meant that Saab finally ran out of time as a GM brand.

What next for Jaguar Land Rover?

2010-01-25T17:35:00Z

There have been mutterings on the industry grapevine that change was coming to the top of JLR, but today’s news that CEO David Smith is leaving still comes as a surprise.

Smith was the linkman between JLR and Tata Motors during the 2008 sell-off and made such a good impression on the Indian team that he jumped straight to the top of the list when a new CEO was needed.

Jaguar Land Rover boss to depart

Officially the reasons for his departure are “confidential between the two parties”, whatever truth that really masks, and company insiders are keeping to that line, although persistent rumours that former Opel exec Carl-Peter Forster was being sounded-out for some high ranking job at JLR can’t have helped.

Smith gave the impression of being a finance man at heart rather than a car guy - even though he joined Ford in 1983. That’s not a bad thing, of course, JLR has always needed a strong hand on the purse strings.

But the CEO’s job also needs enormous empathy for production, engineering, styling, strategy, marketing, sales and PR. Maybe those things never quite gelled?

It also seems strange to make this key change at a critical time as the new XJ nears production. Also D-Day nears on the monumental decision to close one of JLR’s three Midlands factories, widely expected to be Solihull.

This feels like a critical year when JLR needs stability at the top, a point that could have been made many times in the past when the revolving door at the top of the company was spinning at full speed.

There are rumours that the XJ launch is facing a delay. Certainly the old XJ was completely sold out last year, so we have to hope that the run-out of the XJ hasn’t gone wrong again.

At the moment there’s no suggestion of a repeat of the disaster of the previous switchover from the X300 to the alloy X350, which was delayed by nearly twelve months and largely blamed for Jag’s descent to a £500m loss that year.

Hardcore detail like this ought to be meat-and-drink to an exec like Carl-Peter Forster, although JLR still isn’t confirming Forster’s or anyone’s name.

He’s got masses of wide-ranging industry experience, and ended his career at BMW as board member for vehicle development from 1999 to 2001, the start of the Bangle era.

If Forster does turn-up at JLR, he brings 13 years experience at BMW and a further 10 or so at General Motors Europe, although his time at GME ended less than happily.

My sources suggest that the twists-and-turns of the GME sell-off ultimately took their toll, a process not helped by Forster’s championing of the Magna deal with the German government.

And during his tenure at GME, Brits saw him as favouring German working methods at the expense of Vauxhall, even though GM’s British arm was out-performing Opel. Of course he did OK the Astra investment at Ellesmere Port.

Unusually, Forster has a mixed business and technical background including an aerospace degree from Munich University and a spell at management consultants McKinsey in the early 80s.

In that sense he would become probably the most qualified boss JLR has ever had. And Forster has another secret that’s relevant to JLR - he was born in Britain in 1954 - spending his early years in London.

Nissan gets emotional with the Juke

2010-01-07T11:00:00Z

Although I’ve seen the production version of the Nissan Qazana, I can’t tell you anything about it. And that’s mainly because I’ve signed a confidentially agreement.

But – thanks to the concept Qazana - it’s no secret that the showroom version will really polarize opinion.

The Qazana is the beginning of a move by Nissan to break out of its stylist comfort zone. Company bosses want their cars to ‘have a more attractive and emotional appeal in the future’.

However, Nissan insiders are denying that the production Qazana is ‘a risky’ move. "We have studied the market and customers extremely closely and are sure that it will be success," they say.

Nissan last calculated bet – a move into Crossovers of varying types – has proved to be a massive success. The Qashqai was the first ‘4x4’ to offered in a size that made sense on the school and supermarket run, as well as being priced reasonably.

Indeed, last year Nissan sold 183,000 Qashqais across Europe and Russia (which might make it one of the best-selling UK produced cars of all time).

Nissan Qazana 'will split opinion'

Market research after the Qashqai’s launch also showed that the average age of the buyer was rather lower than a conventional C-segment car and that more women bought it, which is just what the marketing department ordered.

However, the Qashqai didn’t exactly push the styling envelope. It seems that Nissan wants its future customers to be more ‘emotionally engaged’ with its products, a process driven by styling.

I’m not so sure. Last week I saw an H-plate Nissan Primera rolling down the street. After registering that the car was now 19 years old, my next thought was just how much I enjoyed driving a Primera 2.0 eGT over the Christmas break in 1993. I can still remember it quite clearly.

For my money, making really good cars is a much less risky way of ‘emotionally engaging’ buyers.

My vision for Saab

2009-12-09T14:38:07Z

The newswires were alive yesterday with a story that Autocar ran on 1 October.

GM’s decision to sell the old 9-5 and 9-3 production equipment raised fears that Saab was being broken up by stealth, especially as the Swedish National Debt office has also demanded that the car maker is divided into five separate divisions.

Beijing Automotive (BAIC) has also just got the go ahead for a US $3 billion loan from the Bank of China.

Apparently, GM isn’t intending to sell Saab in chunks, but clearly Beijing Auto is still interested. The big hurdle is that GM is unlikely to sell its latest technology (in the form of the 9-5 and 9-4X) to a Chinese buyer.

However, I can imagine a scenario that might work.

If BAIC restarts 9-3 and old 9-5 production equipment in China, GM could prop up the Saab brand by selling the new 9-5 (possibly out of Russelsheim, the 9-5 original home) and the 9-4X (out of GM's facility in Mexico) directly to BAIC for a fixed ex-factory cost.

This would prevent BAIC getting its hands on GM's latest tech, but would prop the brand up for a few years as well improve the economics of Opel's Russelsheim plant and the Mexico factory which is also making the new Caddy SRX, the 9-4X's sister car.

Of course, BAIC would have to organise a replacement for the 9-3, but Saab engineers at Trollhatten are well on with the project and are already looking to buy large numbers of components (including engines) from component suppliers, rather than engineering their own. A new 9-3 is probably only a decent floorpan away from being realisable.

Although Saab's design and engineering centre would hugely benefit BAIC, it probably does mean that Trollhatten is over as a production centre. But then building cars in Krona and exporting them into the EU and US was a recipe for red ink.

Saab would become, partly, a virtual car company. Like Apple, for example, it would sub-contract its manufacturing around the globe. It might just work.

Technorati Tags: Saab, Saab 9-5, Opel, GM, BAIC, China

Who gains what from a Mitsubishi/PSA tie-up?

2009-12-04T10:09:31Z

News that Peugeot/Citroen is discussing a stake in Mitsubishi, possibly as big as 50 per cent at a cost of around £1.5 billion, marks yet another stage in the wave of consolidation sweeping the car industry.

At several levels, I think this could work for both partners. In particular it could be the lifeline that Mitsubishi Motors needs to develop a more independent strategy outside the Okeiretsu of Mitsubishi companies that saved it from closure when Daimler-Chrysler's global ambitions collapsed in 2004.

PSA eyes Mitsubishi stake

Mitsubishi is still supported by the four group companies that together own around 34 per cent of Mitsubishi Motors.

In fact Mitsubushi Heavy, the engineering arm that owns 15 per cent, has just help fund a new range of 1.8 and 2.0-litre diesels that we'll first see in the RVR soft-roader next year and will then replace the VW unit in the Lancer and Outlander.

And Mitsubishi's i-MIEV is powered by batteries developed by the Lithium Energy Japan, a company controlled by Mitsubishi Corporation, the second biggest shareholder in Mitsubishi Motors.

Incestuous to say the least.

Despite this, MMC is still heavily indebted and losing money against a background of a grim economic outlook, in the home market particularly.

And in the medium term it needs to find a partner to develop the new Lancer and, given that one analysts report I've just looked at suggests Mitsubishi Motors only spends around £300m a year on R&D, that's going to be very important.

PSA will get a lot out of this, too. Mainly there's access to the lithium-ion technology. I think this is the first time that EV technology has been a significant driving force behind a strategic tie-up in the auto industry.

Then there's access to markets where PSA is weak - Asia and to a lesser degree Russia.

And it also moves PSA into the second tier of global car-makers. Put PSA's 3m cars a year together with Mitsubishi's 1m and you get a 4m-sized car company comparable with Honda and knocking on the door of Ford/Mazda.

But the big question that remains is how will this co-operation work in practice? And can PSA actually get Mitsubishi to do the things it wants?

So far the much-touted examples are of re-badging jobs of each other cars - Outlander/4007, i-MIEV/iON. Those are a far cry from an engineering co-operation where compromise is required on a daily basis.

Also, what will Toyota think about this? Maybe a decision has already been taken to end the Aygo/107/C1 co-operation? A new one of those is due around 2012/13.

In the example of a western/Japanese merger working well - Renault-Nissan - the Japanese partner was bankrupt and burned out, which made the job of the incoming westerners much easier.

Mitsubishi has seen partners/owners come and go in the past, Chrysler twice, and the Daimler fiasco, I wonder whether the culture there is ready for more interference from outside, even if it is much needed?

Lots of questions and, so far, not many answers.

What the Middle East cash crisis means for the car industry

2009-11-26T14:09:00Z

News that Dubai’s government holding company is seeking to have interest payments due on billions of pounds in loans taken out to fund Dubai World, a development that includes some of the world’s most prestigious real estate projects, deferred until next May will no doubt be sending some uncomfortable thoughts through the minds Europe’s top car company officials today.

In recent times countries right across the Middle East have taken advantage of the economic downturn and subsequent rout in the stock market by pouring vast amounts of money into Europe’s car industry through increased holdings – to the point where the governments of the likes of Qatar, Kuwait, Abu Dhabi, Dubai and Saudi Arabia now hold substantial interests in many of Europe’s established car makers.

The arrival of Middle Eastern investment has helped shore up plunging stock prices as well as provide new avenues of capital to fund new model development at a time when borrowing from traditional institutions has proved difficult.

The question raised by the Dubai government’s apparent default on its loan obligations for Dubai World is: just how secure are the investments being made by the Middle East in the likes of Aston Martin, Ferrari, Mercedes-Benz and the Volkswagen Group – including all ten of its brands? It also poses serious questions about the short term financial stability of the Gulf region.

For companies like Daimler and Volkswagen the loss of Middle Eastern investors would in all likelihood, given the continued depressed state of the world’s economy, possibly expose them to the spectre of a foreign buy out – something their respective bosses, Dieter Zetsche and Martin Winterkorn, have worked hard to protect over the past couple of years.

It would also cut into development, marketing and personnel budgets at a time when funding by any other means is hard to come by.

For smaller concerns like Aston Martin, the outlook would be even worse. Whatever the outcome, you can be sure Richards, Zetsche, Winterkorn and just about all of their adversaries within the European car industry will be glued to the news coming out of the Middle East today.

GM’s global dream is back on track

2009-11-25T16:20:01Z

So it looks as if Vauxhall has escaped a serious axing as General Motors rushes to restructure the European division it thought it would have to sell.

Brit Nick Reilly has been sent in to restructure GM Europe - a plan he says will be finalised within three weeks.

Vauxhall/Opel to cut 9000 jobs

Job losses are pegged at 9000, with around 5300 falling on Germany and rest distributed between Belgium, Spain and the UK. Only the Antwerp plant looks set for the axe, unless another role can be found for it.

Ellesmere Port – currently working seven days a week to build up launch stocks of the new Astra – will breathe a relative sigh of relief.

Reilly said at this afternoon’s press conference that saving GM Europe would make ‘GM stronger globally’. “We all have the same objective: To create a viable, sustainable company. This is very do-able.”

That’s no surprise. Before the global crash GM had neatly engineered a new global manufacturing system and a range of global platforms. The crisis almost allowed that to slip through GM’s fingers, but if this restructuring works, GM’s dream of becoming a truly global carmaker is back on track.

The big ‘if’ is money. Reilly said that GME wants £3.3bn Euros in loans from European governments for the restructuring operation.

This sum is partly to pay for the lay-offs, partly to tide GME over (Reilly says the European new car market will be ‘very weak’ in 2010) and partly for investment in new products.

GM’s US headquarters will also contribute restructuring funds, but that will have to be given the green light by the US Government, which currently has a large stake in GM. Money can only be sent overseas if GM Detroit can convince the US government that doing so will bolster the whole of GM.

If the Obama administration agrees, it just underlines the importance of Vauxhall/Opel to GM’s global operation.

Saab faces oblivion

2009-11-24T17:08:00Z

I have to admit to a deep sinking feeling when the news flashed into my inbox that the Koenigsegg Group had suddenly pulled out of the deal to buy GM’s unwanted Swedish subsidiary.

Saab’s operation is currently balanced on a knife-edge. It needs a £400m loan from the European Investment back to tide it over until the new 9-5 is launched next spring.

Read Koenigsegg/Saab deal collapses

Reports from the Swedish media say that the Swedish government had still not agreed to act as the guarantor for the EIB loan.

According to the Swedish newspaper The Local, Christian von Koenigsegg has just made this statement.

“The time factor has from the beginning been critical for our strategy to breathe new life into the company. Unfortunately, delays in completing the deal have led to risks and uncertainties that prevent us from successfully carrying out our business plan for Saab Automobile.”

Earlier this year, General Motors said that Saab could be closed down if it hadn’t been disposed of by Christmas. GM won’t say much for the next few days while the damage is assessed, but the Saab operation is clearly at risk of coming to a halt.

It’s likely that Chinese carmakers (who are keen on picking up European brands) will be sniffing about, including Beijing Auto, which was a minority shareholder in the Koenigsegg Group.

However, as the MG Rover collapsed showed, the Chinese, while cash-rich, will play hardball and are likely to want to pick up defunct operation rather than trying to keep the current show on the road.