Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: VW Will Do A Sign-And-Drive With Its Own Assets
Volkswagen is in need of cash to cover the growing costs of the diesel cheating scandal, one that spans nearly every market it sells cars in. So it’s in the process of securing a $21 billion line of credit from several banks.
If the automaker is unable to repay that loan in a year, some of its assets or even brands could be up for grabs. Reuters speculates on which ones:
Listings of divisions such as Audi, Porsche or its truck business - which is being carved out now - seem unlikely, but the non-truck parts of VW’s MAN (MANG.DE) subsidiary are expected to be at the top of the list of potential divestments, the people said.
The MAN power engineering operations, whose products include ship engines, mini power plants, special gear units, propulsion components and testing systems may be valued at 4-5 billion euros in a potential deal, the people said.
The division accounted for all of MAN’s 101 million euro nine-month operating group profit and for more than a quarter of its 9.98 billion in sales.
“Volkswagen may also consider divesting luxury car brands Bentley and Lamborghini or motor bike brand Ducati, although these units don’t really move the needle,” one of the sources said.
Interesting that those luxury halo brands don’t really “move the needle.”
2nd Gear: No Mini, Jaguar Or Tesla In Detroit
The Detroit Auto Show this year will be without a few luxury brands that normally attend these things: Jaguar, Mini and Tesla Motors. Here’s Automotive News to explain why:
NAIAS spokesman Max Muncey told Automotive News that the brands decided to drop out because the timing of their vehicle introductions did not sync with the show’s timing, which opens for two days of press previews on Jan. 11.
[...] “It’s just one of those unfortunate things that can happen when automakers’ product cycles don’t align” with the timing of the show, Muncey said.
Despite this, the Detroit show—America’s biggest auto show and the home game for the Big Three—is expected to be “jam packed” with other automakers.
At the same time I think it shows the diminishing importance of auto shows and their set calendars. We’re in an era when automakers can unveil cars online (and they always leak out anyway) or at dedicated special events, so why revolve around auto shows?
3rd Gear: Fed Likely To Raise Interest Rates
Thinking of financing a new car? Do it before this happens, according to the New York Times:
The American economy created 211,000 jobs in November, the government reported Friday, a robust showing that all but guarantees policy makers at the Federal Reserve will raise interest rates for the first time in nearly a decade when they meet this month.
The unemployment rate held steady at 5 percent, unchanged from October.
Credit’s cheap right now. If you have to finance, now’s the time to do it.
4th Gear: The Takata Cases March On
Here’s Reuters on where the courts are at with the many lawsuits against explodey airbag maker Takata:
A U.S. judge has rejected a bid by air bag manufacturer Takata Corp (7312.T) and automaker Honda Motor Co(7267.T) to toss out a class-action lawsuit on behalf of millions of owners with potentially faulty airbag inflators, even as the firms are moving to quickly settle death claims.
The Japanese companies have agreed to undisclosed settlements for six of eight deaths linked to ruptured inflators as U.S. prosecutors ramp up a probe of the ruptures and whether regulators were misled. Four settlements have been reached in recent months.
5th Gear: Ferrari Spinoff Approved
Ferrari has been approved by Fiat Chrysler shareholders to become an independent company, reports the AP:
Fiat Chrysler CEO Sergio Marchionne, who is also Ferrari’s chairman, confirmed Thursday that Fiat Chrysler’s remaining 80 percent stake in Ferrari will be distributed to its shareholders. The Italian-American carmaker sold a 10 percent stake in Ferrari last month on Wall Street, raising $893 million. It will distribute the rest of its shares for Milan trading on Jan. 4.
All of Ferrari’s employees are getting a 5000 euro bonus as a result. Happy Holidays, indeed.
Reverse: His Murder Remains Unsolved