The European chief of General Motors (GM), Carl-Peter Forster, may switch to Indian car manufacturer Tata, German media reported Saturday.
Forster, 55, is quitting GM after strongly criticising the Detroit-based car giant's surprise U-turn in deciding not to sell European subsidiary Opel.
Tata is reportedly eyeing the GM manager to take charge of its global sales division. A decision was due shortly, sources told German Focus news magazine.
The role would involve launching Tata's budget Nano car in Europe, due in 2011.
Tata also owns the prestigious British Jaguar and Land Rover brands.
GM confirmed Friday that Forster was quitting. The former Opel boss had been highly critical of GM's last-minute decision not to sell the German carmaker to Canadian-Austrian car parts manufacturer Magna and their Russian backer, state-owned Sberbank.
Showing posts with label General Motors. Show all posts
Showing posts with label General Motors. Show all posts
Saturday, November 7, 2009
Thursday, October 22, 2009
General Motors launches new sedan 'Cruze'
"About 72 percent of the Indian car market consists of small cars and a presence is needed in that segment to be a volume player," P. Balendran, vice-president of GM India, told reporters after launching the car here.
Saturday, August 22, 2009
GM board refuses to accept Canada's Magna as Opel winner
General Motors Friday postponed its decision on whether Canada's Magna International was the winning bidder for its Opel brand.
Magna, which is the world's third largest part maker, and the Savings Bank of the Russian Federation (called Sberbank), had jointly submitted a bid in July to acquire a 55 percent stake in the troubled General Motors' Opel.
Brussels-based financial investor RHJ International is the rival bidder. Two other bidders - Italy's Fiat and China's Beijing Automotive - opted out of the fray.
Opel is on the block as the ailing General Motors, which has received $50 billion bailout from US and Canadian governments, undertakes massive restructuring plans.
At their meeting Friday, GM's board of directors failed to come to a decision whether to accept the winning bid by the Canadian auto company and the Russian bank.
"The GM Board of Directors met today to discuss options for Opel. No decision was taken,'' a statement by the auto giant said after the meeting.
The German government has given its financial backing for the joint bid by Magna and the Russian bank.
But reports said GM's new appointed board of directors wants to know from the German government about financial backing for a rival bid by RHJ International.
Magna and Sberbank have offered $775 million to acquire a 55 percent stake in Opel and its UK unit Vauxhall. GM will retain 35 percent, and Opel employees acquire 10 percent under the deal.
But GM chief negotiator John Smith reportedly has reservations about Magna's offer because it will give its Russian partner access to GM intellectual property and control over some of its Chevrolet operations in Russia.
Magna's consortium with the Russian bank has the backing of the US, Canadian and German governments because of the emerging middle class in Russia which could fuel Opel's long-term recovery.
Being the majority stake holders in GM currently, the US and Canadian governments also have a big say in the bidding process.
The German government is also a big player as it negotiated and underwrote a deal to transfer Opel assets to a new company before the GM bankruptcy.
Magna, which is the world's third largest part maker, and the Savings Bank of the Russian Federation (called Sberbank), had jointly submitted a bid in July to acquire a 55 percent stake in the troubled General Motors' Opel.
Brussels-based financial investor RHJ International is the rival bidder. Two other bidders - Italy's Fiat and China's Beijing Automotive - opted out of the fray.
Opel is on the block as the ailing General Motors, which has received $50 billion bailout from US and Canadian governments, undertakes massive restructuring plans.
At their meeting Friday, GM's board of directors failed to come to a decision whether to accept the winning bid by the Canadian auto company and the Russian bank.
"The GM Board of Directors met today to discuss options for Opel. No decision was taken,'' a statement by the auto giant said after the meeting.
The German government has given its financial backing for the joint bid by Magna and the Russian bank.
But reports said GM's new appointed board of directors wants to know from the German government about financial backing for a rival bid by RHJ International.
Magna and Sberbank have offered $775 million to acquire a 55 percent stake in Opel and its UK unit Vauxhall. GM will retain 35 percent, and Opel employees acquire 10 percent under the deal.
But GM chief negotiator John Smith reportedly has reservations about Magna's offer because it will give its Russian partner access to GM intellectual property and control over some of its Chevrolet operations in Russia.
Magna's consortium with the Russian bank has the backing of the US, Canadian and German governments because of the emerging middle class in Russia which could fuel Opel's long-term recovery.
Being the majority stake holders in GM currently, the US and Canadian governments also have a big say in the bidding process.
The German government is also a big player as it negotiated and underwrote a deal to transfer Opel assets to a new company before the GM bankruptcy.
Tuesday, June 9, 2009
Ex-AT&T CEO to become chairman of restructured GM
General Motors Corp said on Tuesday that former chairman and chief executive of AT&T Inc Edward Whitacre will become chairman of the restructured automaker later this summer.
The No. 1 U.S. automaker, which filed for bankruptcy on June 1, plans to undertake a quick sale process that would allow a much smaller company to emerge from court protection in as little as 60-90 days.
GM said the new chairman will take over when the smaller, restructured company is formed in the next few months. The automaker's current interim chairman, Kent Kresa, will continue to serve in that position until then.
Kresa, former chief executive of Northrop Grumman Corp, became GM chairman in March when the Obama administration ousted Rick Wagoner, who had been both GM's chief executive and chairman.
Whitacre and Kresa, along with current board members Philip Laskawy, Kathryn Marinello, Erroll Davis Jr, E. Neville Isdell and Chief Executive Officer Fritz Henderson, will serve as the ''nucleus'' of the restructured company's board, GM said in a statement.
The six other members of the current board will most likely retire, according to the automaker.
GM has retained executive search firm Spencer Stuart to find directors to serve on the board of the new company that it expects to emerge from bankruptcy, The automaker said a selection process is currently under way for four more directors to serve on the board.
Also, the Canadian government and the new UAW Voluntary Employee Benefit Association will each be nominating one director, bringing the total number of directors of the reorganized company to 13.
The No. 1 U.S. automaker, which filed for bankruptcy on June 1, plans to undertake a quick sale process that would allow a much smaller company to emerge from court protection in as little as 60-90 days.
GM said the new chairman will take over when the smaller, restructured company is formed in the next few months. The automaker's current interim chairman, Kent Kresa, will continue to serve in that position until then.
Kresa, former chief executive of Northrop Grumman Corp, became GM chairman in March when the Obama administration ousted Rick Wagoner, who had been both GM's chief executive and chairman.
Whitacre and Kresa, along with current board members Philip Laskawy, Kathryn Marinello, Erroll Davis Jr, E. Neville Isdell and Chief Executive Officer Fritz Henderson, will serve as the ''nucleus'' of the restructured company's board, GM said in a statement.
The six other members of the current board will most likely retire, according to the automaker.
GM has retained executive search firm Spencer Stuart to find directors to serve on the board of the new company that it expects to emerge from bankruptcy, The automaker said a selection process is currently under way for four more directors to serve on the board.
Also, the Canadian government and the new UAW Voluntary Employee Benefit Association will each be nominating one director, bringing the total number of directors of the reorganized company to 13.
GM all set to launch its mini car in India
General Motors India today said it will launch an all new mini car in India, with a price tag of over Rs four lakhs by the end of this year.
The mini car, third in the Bi segment from GM India after Chevrolet Spark and U-VA, would also be exported out of India exactly 12 months after the launch within the country, GM India Managing Director Karl Sliym told newsmen here at the launch of LPG version of Spark.
The Indian launch would coincide with the global launch of the mini car he said adding that it would have an indigenous content of over 85 per cent.
He said riding on the success of Spark, which has registered a 25 per cent growth during the first five months of this fiscal, besides contributing to nearly 50 per cent of the total vehicles of 65702 vehicles had sold in the country last year, the company attaches greater significance to the small car segment in India which nearly constituted 40 per cent of the total volume.
He said under the new dispension GM, with 60 per cent ownership with the United States Government would not change its India plans after an investment of over Rs 5000 crores. India would continue to be in the mainstream of its plans.
The mini car, third in the Bi segment from GM India after Chevrolet Spark and U-VA, would also be exported out of India exactly 12 months after the launch within the country, GM India Managing Director Karl Sliym told newsmen here at the launch of LPG version of Spark.
The Indian launch would coincide with the global launch of the mini car he said adding that it would have an indigenous content of over 85 per cent.
He said riding on the success of Spark, which has registered a 25 per cent growth during the first five months of this fiscal, besides contributing to nearly 50 per cent of the total vehicles of 65702 vehicles had sold in the country last year, the company attaches greater significance to the small car segment in India which nearly constituted 40 per cent of the total volume.
He said under the new dispension GM, with 60 per cent ownership with the United States Government would not change its India plans after an investment of over Rs 5000 crores. India would continue to be in the mainstream of its plans.
Saturday, June 6, 2009
GM to provide $2 billion cash for Delphi buyout
General Motors Corp said on Friday it would provide $2 billion cash plus credit to support private equity firm Platinum Equity's buyout of its bankrupt former parts unit, Delphi Corp.
GM, which filed for bankruptcy on Monday, said it would acquire a Class A interest in the new company for the cash. Platinum Equity would put in $250 million cash for a Class B interest and Delphi would acquire Class C interests on behalf of junior bankruptcy financing lenders that forgive some debt.
GM and Platinum also have agreed to establish a secured term loan for the new company, with GM providing $500 million and Platinum $250 million, the automaker said in a filing with the U.S.
Securities and Exchange Commission on friday.
On Monday, Delphi said it reached a deal to sell most of its global operations to Platinum Equity, including its headquarters in Troy, Michigan, and five of its operations back to GM. Other assets would be sold or closed.
At that time, Delphi said it had emergence capital and capital commitments totaling $3.6 billion, but did not provide details.
Delphi hopes to complete the deal by the end of July.
The deal could provide a final resolution for Delphi, which filed for bankruptcy in October 2005. A previous Delphi plan to emerge from bankruptcy protection in April 2007 fell through.
Supply agreements between GM and Delphi will be carried through to the end of related product programs, GM said. GM also said it would provide financing to support Delphi's operations, while the deal is completed.
The automaker said it would pay or take over $600 million of Delphi's senior debtor-in-possession credit facility, $300 million of its junior facility and $200 million of other obligations to be shared with the new company.
GM said it would waive $1.6 billion of pension costs that had been transferred from Delphi and $300 million of administrative claims when the transactions are completed.
GM also agreed to provide Delphi with a $250 million credit facility that will be waived if the deals are completed.
The plans require U.S. bankruptcy court approval.
The case is In re Delphi Corp, U.S. Bankruptcy Court, Southern District of New York, No. 05-44481.
GM, which filed for bankruptcy on Monday, said it would acquire a Class A interest in the new company for the cash. Platinum Equity would put in $250 million cash for a Class B interest and Delphi would acquire Class C interests on behalf of junior bankruptcy financing lenders that forgive some debt.
GM and Platinum also have agreed to establish a secured term loan for the new company, with GM providing $500 million and Platinum $250 million, the automaker said in a filing with the U.S.
Securities and Exchange Commission on friday.
On Monday, Delphi said it reached a deal to sell most of its global operations to Platinum Equity, including its headquarters in Troy, Michigan, and five of its operations back to GM. Other assets would be sold or closed.
At that time, Delphi said it had emergence capital and capital commitments totaling $3.6 billion, but did not provide details.
Delphi hopes to complete the deal by the end of July.
The deal could provide a final resolution for Delphi, which filed for bankruptcy in October 2005. A previous Delphi plan to emerge from bankruptcy protection in April 2007 fell through.
Supply agreements between GM and Delphi will be carried through to the end of related product programs, GM said. GM also said it would provide financing to support Delphi's operations, while the deal is completed.
The automaker said it would pay or take over $600 million of Delphi's senior debtor-in-possession credit facility, $300 million of its junior facility and $200 million of other obligations to be shared with the new company.
GM said it would waive $1.6 billion of pension costs that had been transferred from Delphi and $300 million of administrative claims when the transactions are completed.
GM also agreed to provide Delphi with a $250 million credit facility that will be waived if the deals are completed.
The plans require U.S. bankruptcy court approval.
The case is In re Delphi Corp, U.S. Bankruptcy Court, Southern District of New York, No. 05-44481.
Friday, June 5, 2009
Magna - Gm deal in doldrums
Signs emerged on Friday that Canada's Magna could face challenges to its deal for GM's European unit Opel as Fiat SpA said it was still interested and Germany invited rival bidders to improve their offers.
Fiat, the Italian automaker, lost out last week to the Canadian car parts maker Magna in bidding for General Motors Corp's Germany-based Opel and British brand Vauxhall, but Fiat Chief Executive Sergio Marchionne said the deal was not yet sealed.
''The interest is still there, it doesn't depend on us,'' he told reporters on the margins of a police ceremony in this northwestern city where Fiat is based. ''The deal technically is not closed, we will see.'' Asked about Fiat's other expansion plans, Marchionne said its interest in GM's Swedish unit Saab was ''minimal'' without Opel.
Fiat has no talks under way with PSA Peugeot Citroen SA, he said.
The French company is often mentioned as a potential Fiat tie-up partner.
Fiat shares were up 0.39 percent at 7.73 euros at 1321 GMT. The DJ Stoxx auto indexwas up 2.34 percent.
Marchionne said Fiat had not yet used a 1.0 billion euro ($1.4 billion) line of credit it had with the banks.
Fiat has said its focus is turning around ailing U.S. car maker Chrysler. Marchionne had seen Opel as key to his goal of putting Fiat in the top ranks of world automakers by output.
Berlin clinched a deal last week with Magna and the U.S.
government that includes state-backed loans and loan guarantees worth 4.5 billion euros. The deal aims to shield the company and thousands of jobs from GM's Chapter 11 bankruptcy filing.
Magna and Russian bank Sberbank agreed in principle on May 29 to take a combined 55 percent stake in Opel, with Magna lending 300 million euros to cover short-term needs.
IMPROVED BIDS? Although Magna's plan put it in a strong position, a German government spokesman said it could not be ruled out that other bidders could improve on its offer.
Besides Fiat, China's Beijing Automotive Industry Corp has also shown interest in Opel. It has hired PricewaterhouseCoopers to advise it on a takeover bid, a source familiar with the situation told Reuters on Thursday.
GM Europe Chief Executive Carl-Peter Forster said on Friday he expected a definitive agreement with Magna by July and the deal to close by September.
Writing on a GM Europe web log, he cautioned that although both parties were committed to completing the deal, ''much work remains and much could happen along the way''.
In an interview with Austria's Format magazine, Magna co- Chief Executive Siegfried Wolf said he would keep Magna and Opel separate in the interest of Magna's other clients.
Fiat, the Italian automaker, lost out last week to the Canadian car parts maker Magna in bidding for General Motors Corp's Germany-based Opel and British brand Vauxhall, but Fiat Chief Executive Sergio Marchionne said the deal was not yet sealed.
''The interest is still there, it doesn't depend on us,'' he told reporters on the margins of a police ceremony in this northwestern city where Fiat is based. ''The deal technically is not closed, we will see.'' Asked about Fiat's other expansion plans, Marchionne said its interest in GM's Swedish unit Saab was ''minimal'' without Opel.
Fiat has no talks under way with PSA Peugeot Citroen SA, he said.
The French company is often mentioned as a potential Fiat tie-up partner.
Fiat shares were up 0.39 percent at 7.73 euros at 1321 GMT. The DJ Stoxx auto indexwas up 2.34 percent.
Marchionne said Fiat had not yet used a 1.0 billion euro ($1.4 billion) line of credit it had with the banks.
Fiat has said its focus is turning around ailing U.S. car maker Chrysler. Marchionne had seen Opel as key to his goal of putting Fiat in the top ranks of world automakers by output.
Berlin clinched a deal last week with Magna and the U.S.
government that includes state-backed loans and loan guarantees worth 4.5 billion euros. The deal aims to shield the company and thousands of jobs from GM's Chapter 11 bankruptcy filing.
Magna and Russian bank Sberbank agreed in principle on May 29 to take a combined 55 percent stake in Opel, with Magna lending 300 million euros to cover short-term needs.
IMPROVED BIDS? Although Magna's plan put it in a strong position, a German government spokesman said it could not be ruled out that other bidders could improve on its offer.
Besides Fiat, China's Beijing Automotive Industry Corp has also shown interest in Opel. It has hired PricewaterhouseCoopers to advise it on a takeover bid, a source familiar with the situation told Reuters on Thursday.
GM Europe Chief Executive Carl-Peter Forster said on Friday he expected a definitive agreement with Magna by July and the deal to close by September.
Writing on a GM Europe web log, he cautioned that although both parties were committed to completing the deal, ''much work remains and much could happen along the way''.
In an interview with Austria's Format magazine, Magna co- Chief Executive Siegfried Wolf said he would keep Magna and Opel separate in the interest of Magna's other clients.
GM India unveils Chevrolet Spark LPG
LPG version at Rs 3.52 lakh
General Motors India today launched the LPG version of ''its best selling model'' Chevrolet Spark in the country, priced at Rs 3.52 lakh (ex-showroom Delhi).
''We plan to continue to introduce the variance of the Spark that targets different groups of customers. This will enable us to achieve our goal of becoming a market leader in India by giving our customers the vehicles that they want, when they want them,'' General Motors India president and Managing Director Karl Slym told reporters here.
With an average of 13.8 km, this model is priced Rs 21,000 more than the regular one and is fitted with 'sequential injection-type' LPG kit, he said adding that the technology used is far superior to the venture type kit available in the market.
He said the India operations will remain unaffected and operate normally despite the automaker's parent filing for bankruptcy protection.
''The bankruptcy filing was only for the US operations...it is business as usual here in India for our employees, suppliers and customers,'' he said.
He said the company's programmes ''are on schedule'' and as per plans, it will launch luxury sedan Chevrolet Cruze in September and a mini car by the end of this year.
Asked about the price tag of the mini car, he said, the price has not been decided yet, but ''it is likely to be around Rs four lakhs.'' Mini car accounts for about 80 per cent of the total cars sold in India as it has better mileage and affordable pricing.
Despite the auto industry growing two per cent last year, the company has recorded 10 per cent growth.
Meanwhile, Chevrolet Sales India Pvt Ltd Vice President( Marketing & Aftersales) Ankush Arora admitted that the bankruptcy filing did affect the business in India, but ''it was a marginal effect...we expect to grow more than ten per cent this year, as targeted earlier.''
General Motors India today launched the LPG version of ''its best selling model'' Chevrolet Spark in the country, priced at Rs 3.52 lakh (ex-showroom Delhi).
''We plan to continue to introduce the variance of the Spark that targets different groups of customers. This will enable us to achieve our goal of becoming a market leader in India by giving our customers the vehicles that they want, when they want them,'' General Motors India president and Managing Director Karl Slym told reporters here.
With an average of 13.8 km, this model is priced Rs 21,000 more than the regular one and is fitted with 'sequential injection-type' LPG kit, he said adding that the technology used is far superior to the venture type kit available in the market.
He said the India operations will remain unaffected and operate normally despite the automaker's parent filing for bankruptcy protection.
''The bankruptcy filing was only for the US operations...it is business as usual here in India for our employees, suppliers and customers,'' he said.
He said the company's programmes ''are on schedule'' and as per plans, it will launch luxury sedan Chevrolet Cruze in September and a mini car by the end of this year.
Asked about the price tag of the mini car, he said, the price has not been decided yet, but ''it is likely to be around Rs four lakhs.'' Mini car accounts for about 80 per cent of the total cars sold in India as it has better mileage and affordable pricing.
Despite the auto industry growing two per cent last year, the company has recorded 10 per cent growth.
Meanwhile, Chevrolet Sales India Pvt Ltd Vice President( Marketing & Aftersales) Ankush Arora admitted that the bankruptcy filing did affect the business in India, but ''it was a marginal effect...we expect to grow more than ten per cent this year, as targeted earlier.''
India plans on track: General Moters MD
General Motors India is one of the key assets of GM Corp globally and will remain part of the restructured company after bankruptcy proceedings, country president and managing director Karl Slym told reporters here Friday.
"India operations are part of the new GM which will only include prime assets. We have invested over a billion dollars in the country and all our plans remain on track," Slym said.
"The bankruptcy proceedings and restructuring are the best way forward for GM," he told reporters on the sidelines of the launch of the LPG-powered variant of the company's compact offering Spark.
"We have President Obama's support."
The 100-year-old US auto behemoth, struggling under a $37-billion in debt, filed for Chapter 11 bankruptcy proceedings Monday after repeated attempts including a $19.4-billion bailout by the Obama government and the resignation of chief executive Rick Wagnor on a reported White House request failed to turn its fortunes.
"GM India is just one step from becoming a truly local manufacturer with the to-be-launched Chevrolet Cruise being built in India as opposed to the CKD (completely knocked down) units being assembled now," Slym added.
Among other plans, the auto maker is setting up a powertrain facility at its Talegaon plant in Maharashtra that is planned to be up by 2010-end, as well as launching a new compact.
The new offering , priced in the region of Rs.400,000, is based on the Chevrolet Beat concept showcased at the 2007 New York Auto show.
GM India has a 4,000-strong workforce at its two plants at Talegaon and Halol in Gujarat, apart from an R&D facility and engineering centre in Bangalore.
"Our commitment to India and out customers remain strong. We are sure that after about 60 days when the proceedings are over we will come out as a stronger entity," Slym said.
The LPG variant of the Spark was launched to coincide with the World Environment Day Friday. It comes in two variants priced at Rs.352,586 and Rs.369,684 ex-Showroom in Delhi.
"India operations are part of the new GM which will only include prime assets. We have invested over a billion dollars in the country and all our plans remain on track," Slym said.
"The bankruptcy proceedings and restructuring are the best way forward for GM," he told reporters on the sidelines of the launch of the LPG-powered variant of the company's compact offering Spark.
"We have President Obama's support."
The 100-year-old US auto behemoth, struggling under a $37-billion in debt, filed for Chapter 11 bankruptcy proceedings Monday after repeated attempts including a $19.4-billion bailout by the Obama government and the resignation of chief executive Rick Wagnor on a reported White House request failed to turn its fortunes.
"GM India is just one step from becoming a truly local manufacturer with the to-be-launched Chevrolet Cruise being built in India as opposed to the CKD (completely knocked down) units being assembled now," Slym added.
Among other plans, the auto maker is setting up a powertrain facility at its Talegaon plant in Maharashtra that is planned to be up by 2010-end, as well as launching a new compact.
The new offering , priced in the region of Rs.400,000, is based on the Chevrolet Beat concept showcased at the 2007 New York Auto show.
GM India has a 4,000-strong workforce at its two plants at Talegaon and Halol in Gujarat, apart from an R&D facility and engineering centre in Bangalore.
"Our commitment to India and out customers remain strong. We are sure that after about 60 days when the proceedings are over we will come out as a stronger entity," Slym said.
The LPG variant of the Spark was launched to coincide with the World Environment Day Friday. It comes in two variants priced at Rs.352,586 and Rs.369,684 ex-Showroom in Delhi.
Wednesday, June 3, 2009
GM bankruptcy opens new opportunity for Indian vendors
The decision of General Motors (GM) to file for bankruptcy could create a new supply chain for Indian and Chinese auto component makers, say industry analysts.
"Corporate bankruptcy in the US is merely restructuring of operations under the government eye. It is not insolvency of a company," said an official of an auto component company.
Agreed V.G. Jaganathan, president (finance) at auto component maker Sundram Fasteners that supplies to the Detroit-based auto behemoth: "GM is not going to die; it is just restructuring its operations."
Analysts said restructuring could mean spiking bigger models for fuel-efficient small cars and hybrid models, which would wedge open GM's supply chain for suppliers in India and China.
"It is well established that Indian component vendors are cost-efficient. As a part of its restructuring, General Motors will start looking at cost-effective suppliers. Indian and Chinese companies are better placed at that," Surjit Arora, Mumbai-based auto analyst with brokerage house Prabhudas Lilladher, told IANS.
"If auto makers move towards hybrid vehicles, it will create business for power train manufacturers though the other components will remain the same," added an auto sector analyst.
GM's rationalisation of plants and product portfolio may make several American auto ancillary units sick, making them potential targets for takeovers.
However, most Indian auto analysts advise against acquiring any of them.
"It is better for us to wait before going in for acquisitions. Cheap assets may turn out to be expensive," said a senior official of an Indian auto component company.
Agreed Bangalore-based strategy and business excellence consultant Achal Raghavan.
"Any acquisition is a long-term strategic move. You may get better valuation. But as past rules do not apply now, companies should take a holistic look at market strategy, customers of today and the target customers over the next three-five years," Raghavan told IANS over phone.
Raghavan, who was earlier with a leading auto component company, said that to survive in the new environment, component vendors cannot just remain suppliers but have to help customers remain competitive.
"Indian auto component companies are not really out of the woods given the industry slump. As such, they may not commit any additional capital on acquiring plants overseas," said Prabhudas Lilladher's Arora.
Indian auto component vendors that export to GM include Bharat Forge, Amtek Auto, Sundram Fasteners and Maini Precision. They say they are not overly worried about developments in Detroit.
"Our exposure to GM is around Rs.11 crore, which is less than one percent of our turnover," said Sundram Fasteners' Jaganathan.
Arora too said Indian auto vendors may not be hit in any major way as their client portfolio is well spread. For instance, he pointed out, GM accounts for just 2-3 percent of the total sales of Pune-based Bharat Forge.
"Corporate bankruptcy in the US is merely restructuring of operations under the government eye. It is not insolvency of a company," said an official of an auto component company.
Agreed V.G. Jaganathan, president (finance) at auto component maker Sundram Fasteners that supplies to the Detroit-based auto behemoth: "GM is not going to die; it is just restructuring its operations."
Analysts said restructuring could mean spiking bigger models for fuel-efficient small cars and hybrid models, which would wedge open GM's supply chain for suppliers in India and China.
"It is well established that Indian component vendors are cost-efficient. As a part of its restructuring, General Motors will start looking at cost-effective suppliers. Indian and Chinese companies are better placed at that," Surjit Arora, Mumbai-based auto analyst with brokerage house Prabhudas Lilladher, told IANS.
"If auto makers move towards hybrid vehicles, it will create business for power train manufacturers though the other components will remain the same," added an auto sector analyst.
GM's rationalisation of plants and product portfolio may make several American auto ancillary units sick, making them potential targets for takeovers.
However, most Indian auto analysts advise against acquiring any of them.
"It is better for us to wait before going in for acquisitions. Cheap assets may turn out to be expensive," said a senior official of an Indian auto component company.
Agreed Bangalore-based strategy and business excellence consultant Achal Raghavan.
"Any acquisition is a long-term strategic move. You may get better valuation. But as past rules do not apply now, companies should take a holistic look at market strategy, customers of today and the target customers over the next three-five years," Raghavan told IANS over phone.
Raghavan, who was earlier with a leading auto component company, said that to survive in the new environment, component vendors cannot just remain suppliers but have to help customers remain competitive.
"Indian auto component companies are not really out of the woods given the industry slump. As such, they may not commit any additional capital on acquiring plants overseas," said Prabhudas Lilladher's Arora.
Indian auto component vendors that export to GM include Bharat Forge, Amtek Auto, Sundram Fasteners and Maini Precision. They say they are not overly worried about developments in Detroit.
"Our exposure to GM is around Rs.11 crore, which is less than one percent of our turnover," said Sundram Fasteners' Jaganathan.
Arora too said Indian auto vendors may not be hit in any major way as their client portfolio is well spread. For instance, he pointed out, GM accounts for just 2-3 percent of the total sales of Pune-based Bharat Forge.
Tuesday, June 2, 2009
Canada gets 12 percent stake in 'bankrupt' GM
As General Motors filed for bankruptcy protection in New York Monday under pressure from President Barack Obama, Canada acquired 12 percent equity of the failed auto giant by investing $9.5 billion in its bailout.
Under bankruptcy protection, the US government will acquire about 60 percent of the equity of the 'new GM' on an investment of $30 billion in the company, in addition to $20 billion it has already spent to keep the once-mighty auto-maker going.
The auto industries in Canada and the US are deeply integrated, with Canadian plants of the three auto giants accounting for 20 percent of their overall production.
Canada's share of the cost to save GM is in proportion to its share of GM's total production, which will be maintained under the restructuring agreement. Ottawa will also appoint one independent director on the board of the restructured GM.
Since Canada faced the prospect of losing its auto industry, Prime Minister Stephen Harper told a press conference here Monday: "Today's announcement is a regrettable but necessary step to protect the Canadian economy during the worst global recession in half a century.
"I wish there were an alternative, but the alternative to what we're doing today would be vastly more costly and more risky.''
The prime minister said: "The Canada-US auto sector is heavily integrated and a viable GM will provide long-term security for thousands of Canadians who work for suppliers, research and development institutions, and other supporting industries.
"The Government of Canada thanks our partners, especially President Obama and the United States' government, for their close collaboration with Canada in the restructuring of GM. This cooperation makes possible a brighter future for GM and the auto industry in both of our countries.''
Welcoming the Canadian decision, Presiden Obama said: "I want to thank the governments of Canada and Ontario for making this investment in GM alongside the United States. Our countries share a stake in this company's future, and I look forward to our close partnership through this restructuring period.''
Most of GM's operations in based in Ontario province.
Under bankruptcy protection, the US government will acquire about 60 percent of the equity of the 'new GM' on an investment of $30 billion in the company, in addition to $20 billion it has already spent to keep the once-mighty auto-maker going.
The auto industries in Canada and the US are deeply integrated, with Canadian plants of the three auto giants accounting for 20 percent of their overall production.
Canada's share of the cost to save GM is in proportion to its share of GM's total production, which will be maintained under the restructuring agreement. Ottawa will also appoint one independent director on the board of the restructured GM.
Since Canada faced the prospect of losing its auto industry, Prime Minister Stephen Harper told a press conference here Monday: "Today's announcement is a regrettable but necessary step to protect the Canadian economy during the worst global recession in half a century.
"I wish there were an alternative, but the alternative to what we're doing today would be vastly more costly and more risky.''
The prime minister said: "The Canada-US auto sector is heavily integrated and a viable GM will provide long-term security for thousands of Canadians who work for suppliers, research and development institutions, and other supporting industries.
"The Government of Canada thanks our partners, especially President Obama and the United States' government, for their close collaboration with Canada in the restructuring of GM. This cooperation makes possible a brighter future for GM and the auto industry in both of our countries.''
Welcoming the Canadian decision, Presiden Obama said: "I want to thank the governments of Canada and Ontario for making this investment in GM alongside the United States. Our countries share a stake in this company's future, and I look forward to our close partnership through this restructuring period.''
Most of GM's operations in based in Ontario province.
Thursday, May 7, 2009
General Motors posts quarterly loss of $6 bn
Threatened US carmaker General Motors posted a quarterly net loss of $6 billion Thursday, its eighth quarterly loss in a row.
GM's loss figure for the same period in 2008 was $3.3 billion. Analysts had feared even worse quarterly news this year.
Revenue dropped by 47 percent, to $22.4 billion. GM, the mother company of similarly struggling European manufacturer Opel, is operating under a US federal bail-out plan.
The largest US carmaker is threatened with bankruptcy, as has already happened to competitor Chrysler. US President Barack Obama has given GM an ultimatum of the end of May for a new restructuring plan to be implemented.
GM's loss figure for the same period in 2008 was $3.3 billion. Analysts had feared even worse quarterly news this year.
Revenue dropped by 47 percent, to $22.4 billion. GM, the mother company of similarly struggling European manufacturer Opel, is operating under a US federal bail-out plan.
The largest US carmaker is threatened with bankruptcy, as has already happened to competitor Chrysler. US President Barack Obama has given GM an ultimatum of the end of May for a new restructuring plan to be implemented.
Wednesday, April 30, 2008
General Motors cuts 1,000 more jobs in Canada
With its high dollar making Canada the world's most expensive place to manufacture vehicles, General Motors (GM) has decided to cut production at its Oshawa plant near here and lay off about 1,000 workers.
"With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities," the company said in a statement issued here.
As the cut in production will lead to loss of about 1,000 direct jobs - and 6,000 related jobs- the Canadian government has come under pressure to intervene to help the auto industry.
Just a few months ago, GM had laid off about 1,000 workers at the car plant as its sales sagged in the US. With Monday's announcement, two of the three work shifts at the plant have been eliminated.
About 90 percent of all vehicles manufactured at this Canadian plant are exported to the US.
The Canadian dollar (loonie) acquiring parity with the American dollar, rising high gas prices, the dumping of foreign made vehicles here and the economic downturn in the US have hit the Canadian auto industry very badly.
Canadian Auto Workers (CAW) union leaders have blamed the government for not doing enough for arrest this trend.
Chris Buckley, president of CAW at the GM plant, said: "I want to challenge the government to get off their asses and start to give some attention to the declining auto industry and manufacturing sector.
"This is absolutely devastating news to about 900 to 1,000 of our members who will lose their jobs.''
He said the government should intervene to check the rising dollar to make manufacturing competitive in Canada, and lower fuel powers by reining in profit-greedy oil companies.
The union leader said while foreign car manufacturers dumped millions of vehicles in Canada, they had little access to foreign markets. The lay-off will take effect in September.
Though GM has announced that it will start production of hybrid vehicles at the plant, it is unlikely to soften the blow to workers.
Last year, about 1.5 million vehicles were sold in Canada.
Indo-Asian News Service
"With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities," the company said in a statement issued here.
As the cut in production will lead to loss of about 1,000 direct jobs - and 6,000 related jobs- the Canadian government has come under pressure to intervene to help the auto industry.
Just a few months ago, GM had laid off about 1,000 workers at the car plant as its sales sagged in the US. With Monday's announcement, two of the three work shifts at the plant have been eliminated.
About 90 percent of all vehicles manufactured at this Canadian plant are exported to the US.
The Canadian dollar (loonie) acquiring parity with the American dollar, rising high gas prices, the dumping of foreign made vehicles here and the economic downturn in the US have hit the Canadian auto industry very badly.
Canadian Auto Workers (CAW) union leaders have blamed the government for not doing enough for arrest this trend.
Chris Buckley, president of CAW at the GM plant, said: "I want to challenge the government to get off their asses and start to give some attention to the declining auto industry and manufacturing sector.
"This is absolutely devastating news to about 900 to 1,000 of our members who will lose their jobs.''
He said the government should intervene to check the rising dollar to make manufacturing competitive in Canada, and lower fuel powers by reining in profit-greedy oil companies.
The union leader said while foreign car manufacturers dumped millions of vehicles in Canada, they had little access to foreign markets. The lay-off will take effect in September.
Though GM has announced that it will start production of hybrid vehicles at the plant, it is unlikely to soften the blow to workers.
Last year, about 1.5 million vehicles were sold in Canada.
Indo-Asian News Service
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