Peugeot in Talks with GM on Possible Alliance

PARIS — Shares in French car maker PSA Peugeot Citroën soared Wednesday after it emerged the company is in talks with U.S. auto giant General Motors Co. about a possible alliance, as it grapples with weak sales and a raging price war in Europe in the small-vehicles segment, on which it relies for most of its business.

French labor minister Xavier Bertrand confirmed the talks on French radio. “The chairman of the group (Peugeot Citroën) informed me last night of these discussions over a strategic partnership,” he said.Peugeot issued a statement Wednesday morning after the news was first reported in French newspaper La Tribune, confirming it was in discussions on a potential alliance or cooperation agreement with another company, but didn’t identify the other party. It said there was “no certainty at this stage that these discussions will result in any agreement.”

Peugeot shares skyrocketed 16 percent to €16.64 ($22.02) by midmorning. By contrast, the blue chip Paris CAC 40 index was down 0.4 percent.

“The talks are not aimed at a takeover,” said a person familiar with the matter. “Both companies would remain independent entities and responsible for their respective operations. They’re mainly looking at possibly sharing technology and developing certain components together.”

Another person familiar with the matter said “everything is on the table, up to and including some sort of cross-minority shareholding.”

A GM spokesman said his company won’t comment on “speculation.”

As they struggle to deal with chronic overcapacity in their core market, European car makers are increasingly tempted to link up with competitors to share the development, engineering and manufacturing costs of new vehicles and technology.

Peugeot Citroën, Europe’s second-largest automotive group by volume after Germany’s Volkswagen AG, is in the midst of a major austerity plan. Last week, France’s biggest auto maker said its automotive division had operating losses in 2011 and had burned through €1.65 billion of cash. To stop the hemorrhaging it stepped up its cost-savings plan for 2012, while freezing or downscaling some capital-expenditure programs, including a planned assembly plant in India.

By contrast, General Motors, which was moribund three years ago before it was bailed out by the Obama administration, last week reported a 62 percent jump in net income to $7.6 billion for 2011.

But GM’s Opel and Vauxhall brands in Europe are also struggling. GM’s European businesses is still in the red, though it has clawed back from the type of steep red ink seen in 2010. However, GM had originally targeted breaking even in 2011. GM has acknowledged that much more restructuring is necessary, but hasn’t been more explicit as talks continue with unions over reducing costs.

Last week, the head of GM Europe’s Opel and Vauxhall brands said the auto maker isn’t cutting back investments on new cars as talks continue with unions over reducing costs, but he shed little light on what concrete measures could be taken to make the business profitable again. Talks with labor unions might take “a couple of months,” said Karl-Friedrich Stracke, GM vice president and president of General Motors Europe, during a conference call. He declined to elaborate on a specific time frame or measures GM is looking into to make Opel and Vauxhall financially viable.

Peugeot already has industrial alliances with other car makers. They include Toyota Motor Co., Ford Motor Co., BMW AG, Mitsubishi Motors Co. and Fiat Automobile.

A linkup between GM’s European operations and those of Peugeot Citroën would help give both companies the scale they need so badly. Peugeot Citroën chief executive Philippe Varin reaffirmed last week that his company is open to alliances with other auto makers, provided they respect three criteria: they must fit in with Peugeot Citroën’s strategy; create significant synergies; and respect the French company’s independence.

Bernstein Research analysts said in a note that consolidation in the European industry is desirable and that a linkup between Peugeot and GM “might work in the end.” But it said “a loose alliance could only be a temporary solution, while a full deal may need more capital,” assuming that Peugeot would be the lead partner in a deal, and not GM.

Unlike in North America, car makers avoided large-scale cutbacks in Europe during the industry slump in 2008 and 2009 when massive job cuts at high-profile manufacturing sites like car factories proved too politically sensitive.

Did the Big Game live up to its hype?

Well, What did you think? I personally thought it was a pretty good game. No big blow out or huge surprises. I would say it was more like a battle of the quarterbacks and Eli won. Watching the game on my Brother-in-laws new 60 inch TV in HD made my experience much more fun. The details and color were amazing. Ok… Back to the game! Brady was struggling in the forth quarter and it showed by his passes. Tight ends were having to become twisted pretzels as the ball was being thrown behind them. But that wasn’t the only thing that brought New England to fall… What about the Safety in the beginning? For me that was the game changer… but that is all done, the victor and well deserved, NY Giants Superbowl Champions!

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Equipment Manufacturers Urge Committee Support for H.R. 7

The American Energy & Infrastructure Jobs Act will be an economic engine for job growth and global competitiveness

AEM is urging support for the highway bill scheduled for consideration by the House Transportation and Infrastructure Committee on Thursday, February 2, 2012. AEM believes the long-awaited legislation would point the way to job creation, desperately needed infrastructure improvements, and greater national and international competitiveness for all domestic businesses.

“Our manufacturers believe H.R. 7 is one of the most important pieces of legislation before Congress this session for job growth and for our economic well-being.  AEM urges the House to quickly consider and approve H.R. 7 and to move quickly to conference with the Senate prior to the March 31 deadline of the current stop-gap funding,” Dennis Slater, AEM president, said.

“Roads, highways and bridges require long-term project planning. The American Energy & Infrastructure Jobs Act (H.R. 7) provides the construction industry with the market certainty it needs to make capital investments in employees and in equipment with new technologies for improved air quality and operating efficiencies. And in a still tenuous economy, it provides a much-needed growth engine,” Slater said.

The bill maintains federal funding for infrastructure in one of the most difficult budget environments in recent years.  The bill reforms and consolidates existing highway programs, accelerates project approval times, and eliminates earmarks.

Source: AEM Advisor

GM to Build $200 Million Stamping Plant in Texas

General Motors said today that it will start construction next week on a $200 million stamping plant in Arlington, Texas, creating about 180 jobs.

The plant will be part of the company’s Arlington manufacturing complex and is scheduled to start production in 2013. It will produce large stamping components for the next generation of Chevrolet Tahoes, Suburbans, GMC Yukons and Cadillac Escalades.

Arlington currently receives stamped components from several GM plants. The new plant will save GM about $40 million a year in logistics cost, the company said in a statement. Last May, GM said it would invest $331 million in the Texas assembly plant for expansion and to purchase tooling and equipment.

Joe Ashton, vice president of the UAW representing the GM department, said in a statement that today’s announcement was further evidence that the U.S. auto industry is recovering.

“An important goal for the UAW is to increase the number of manufacturing jobs in the United States, and we are pleased that General Motors has decided to make this investment in Arlington,” he said in the statement. GM says it has committed more than $6.9 billion of investments to upgrade or expand operation in 12 states since June 2009, creating or retaining more than 17,600 jobs.

Ford Reveals 2013 Fusion NASCAR Sprint Cup Car, Looks More Like Production Model than Old One

Ford revealed the 2013 Fusion sedan at the Detroit auto show a few weeks ago, and now we’re getting a look at how the new design works as a race car. The big news is that the new 2013 NASCAR Sprint Cup Fusion looks a lot more like its production counterpart than did the car it replaces. Currently, thanks to NASCAR’s “Car of Tomorrow” uniform design, every stock car wears a body shell that’s nearly identical, with brand identification essentially consisting of a handful of headlight and grille decals. Beginning next season, NASCAR wants manufacturers to race Sprint Cup cars that wear more brand-differentiated bodywork.

To that end, the 2013 Fusion stock car borrows several cues from the car that will be available to consumers, including the Fusion’s sharp beltline crease, its daylight opening shape, and general surface treatment. The same wide-mouth grille and squinty headlights and taillights also are present, at least in sticker form.

We don’t imagine too many people will mistake the stock car for the production model, but at least it no longer looks like the same generic bar of soap as the rest of the manufacturers’ entries. Of course, the Fusion stock car also rides on a rear-wheel-drive tube-frame chassis and packs a naturally aspirated V-8 engine (despite the hilariously inaccurate EcoBoost stickers on the debut model). So it’s still a ways off from the old “Race on Sunday, sell on Monday” dynamic from NASCAR’s halcyon days, but it’s closer than we’ve seen in years. Given that, we dig.

Diesel-Powered Mazda to Arrive in the U.S. in Early 2013