| |
  Vauxhall safer with GM at the wheel |
| |
 | Reported by guardian.co.uk
on Wednesday, 4 November 2009
(2 weeks ago) |
|  Related Tweets
 Related Headlines
 Full news story |
Totally unacceptable, said Germany's economic minister about the General Motors decision to scrap the sale of its European car business.
Totally understandable is nearer the mark.
The deal to sell Opel and Vauxhall to Magna, a Canadian car parts supplier backed by Russian money, was a transaction born out of desperation when GM was in the financial emergency room and global trade was shrinking.
As with Rio Tinto's back-against-the-wall acceptance of a $20bn injection from Chinalco of China, the logic collapsed as soon as stability in the global economy returned and a whiff of growth could be detected.GM, thanks to an enormous infusion of US taxpayers' money, has emerged from bankruptcy protection in no time at all and can afford to think like a semi-normal company again.
Its executives may or may not be successful in their attempt to restore their European division to profitability but you can't blame them for giving it a go.
If you are a global car manufacturer, giving up on Europe is an almighty step backwards.It is also easier to believe that GM, rather than an inexperienced Canadian/Russian combination in thrall to the German government, might succeed in removing capacity from the European market in a sensible manner.That, of course, is the reason why German politicians are upset.
A purchase by Magna would have protected German jobs; a straightforward commercial assessment by GM is likely to conclude that Germany has at least one Opel plant too many.The German government's ugly attempt to dump the inevitable job losses on its European neighbours was the truly unacceptable part of this tale.Shop shocksThere were lots of surprises from the high street .
The first was Marks & Spencer's headline-grabbing introduction of branded goods.
KitKats, Marmite and PG Tips are on their way.Regard this revolution as an outbreak of common sense.
If M&S's own-label ranges can't compete with these products there's no point in pursuing an unequal struggle.
And if Waitrose is serious about targeting M&S shoppers, it is sensible to try new tricks (or rather old tricks, since this is a return to M&S's policy in the 1950s).M&S should have done it years ago.
In fact, Sir Stuart Rose said he received advice to that effect on his first day at the helm of M&S five years ago.
Maybe it required a mini-crisis at Simply Food to concentrate minds.The second surprise was the strength of trading in retail land.
M&S's half-year pre-tax profits were flat at £298m but the group should make at least £600m in the financial year to next March.
That's still a plunge from £1bn two years ago but the fear of a dive below £500m has gone.Over at Next, the numbers are spectacular (so is the share price: it has more than doubled in a year).
For the second time in six weeks, Next has raised profit expectations for the year - it now expects a 10% uplift on last year to £472m.The lesson is: never underestimate the willingness of Britons to go shopping.
Middle class shoppers with cheaper mortgages underwritten by the Bank of England have come out to play.
Meanwhile, the squeeze on gross margins from a weaker pound - which was retailers' main fear at the start of the year - has not materialised.
Suppliers have been squeezed.Can it last? Next's Simon Wolfson is the in-form retail guru and it may pay to listen to his cautionary tone.
"No one knows what the effect of increased taxation is going to be next year," he says.
"I think that is a huge macroeconomic spectre hanging over the economy." In other words, don't get carried away.
That sounds right.The third surprise was one for retail addicts.
It turns out that Next excludes internet trade from its like-for-like sales comparisons but M&S does not.
You can understand why Next chose to publicise this fact - it suffers from a bald like-for-like comparison.
But Next also makes a fair point: if you want to measure trends in same-store sales, it is illogical to include sales conducted via a website.M&S says its method is the one it has always operated and it sees no reason to change now.We shall see how long it can sustain that stance.
City investors always demand more and more information and usually get their way in the end.Choc dropsEven on the eve of battle, the big mystery remains: why did Kraft chose this moment to pursue Cadbury?Kraft's third-quarter results were, depending on your point of view, underwhelming or solid.
Either way, Kraft's share price fell and is stuck where it was when the phoney war began.
When you're planning to bid in a mix of cash and shares, that lack of momentum in the stock price is a real problem.
It suggests Irene Rosenfeld, chief executive, has little choice but to bid low (less than 800p).
At that price, though, an offer is highly likely to fail, barring a stockmarket plunge.
We await the actual terms, but Cadbury's chances of survival are improving.nils.pratley@guardian.co.uk
|
|
|
| Recent related news |
| |
guardian.co.uk
5 days ago - Technology | Now you can hear electric cars coming
HALOsonic technology makes electric vehicles sound more like spaceships or sports cars - which should... »related headlines & tweets» |
Car and Driver
1 week ago - Automotive | Blazing Buicks! 335-hp Regal GS, Regal Sport Wagon Being Discussed
GM vice chairman Bob Lutz visited Hollywood for the unveiling of the 2011 Buick Regal, providing me... »related headlines & tweets» |
Car and Driver
1 week ago - Automotive | Ford Developing New Police Interceptor for 2011
Ford's P71-package Crown Victorias have held somewhat of a stranglehold on the American police car... »related headlines & tweets» |
teletext
1 week ago - UK | Motorway drink-drive judge banned
A former judge caught on the motorway nearly three times the drink-drive limit has been banned from... »related headlines & tweets» |
Car and Driver
1 week ago - Automotive | Cadillac Converj Gets Green Light: Proof That All Bets at GM Are On Again
General Motors has decided to produce the Cadillac Converj, the stunning sports coupe based off the... »related headlines & tweets» |
| |
Huffington Post
2 weeks ago - Business | Ford Seat Belt: Inflatable Belts Bring Air Bags To Back Seat
DETROIT — Air bags have long been mounted in the steering wheel, dashboard and sides of... »related headlines & tweets» |
Independent
2 weeks ago - Lifestyle | New Astra wins German Golden Steering Wheel award
The new Opel/Vauxhall Astra has won a German Golden Steering Wheel award. “Das Goldene Lenkrad”... »related headlines & tweets» |
Independent
2 weeks ago - Business | Stephen Foley: Detroit looks to hit the gas again as confidence rises
The General Motors board performed what amounts to a handbrake turn over the sale of Vauxhall and... »related headlines & tweets» |
Independent
2 weeks ago - Business | Detroit looks to hit the gas again as confidence rises
The General Motors board performed what amounts to a handbrake turn over the sale of Vauxhall and... »related headlines & tweets» |
guardian.co.uk
2 weeks ago - UK | Asian man cleared of racially abusing Nick Griffin
Tauriq Khalid found not guilty of threatening BNP leader during far-right demonstration in BurnleyAn... »related headlines & tweets» |
| |
|
Tweet the News!
Facebook
E-mail
Twitter
Mixx
StumbleUpon
FriendFeed
Top News RSS Feed | News for my Website | Archive | Advertise | Help | Contact us | Bookmark
