Monday, 22 June 2009

IN THE NEWS

GM plans comeback ahead of schedule

General Motors is preparing to relaunch itself as a leaner company by mid-July, a month earlier than envisaged when the Detroit carmaker filed for bankruptcy protection on June 1.

The judge overseeing GM’s chapter 11 case has set today (June 19) as the deadline for objections to its restructuring plan for most parties.

Barring a surprise, GM and its advisers are confident that none of the roughly 500 objections submitted so far will derail the timetable.

Most of the objections raised so far relate to suppliers’ concerns about the amount and timing of payments by the ‘new’ GM under contracts taken on by the existing company.

Assets of the ‘old’ GM will remain in chapter 11 to be sold or wound down for the benefit of creditors. (Financial Times: June 19).

Fiat calls for restructuring of global motor industry

Fiat has called for a ‘serious restructuring’ of the global automotive industry if it is to be economically viable.

The manufacturer, which is restructuring itself in the wake of its takeover of Chrysler, said the move was ‘absolutely necessary’ to address production overcapacity.

Fiat has predicted that utilisation of carmaking capacity in Europe will fall 65% this year.

PricewaterhouseCoopers has estimated that the industry has near-record capacity to make 86 million units this year, compared with the 55m vehicles that carmakers will actually build. (Financial Times/The Times: June 19).