AUTO HEADLINES

VW in driving seat over Porsche merger

Volkswagen chairman Ferdinand Piech has signalled that the volume carmaker is in the driving seat of its proposed merger with Porsche.

The move came as Germany’s financial watchdog launched another market manipulation probe against Porsche.

Mr Piech said it had been decided that the headquarters of the combined company – which he proposed to be named Auto Union after the carmaker created through the merger of several brands during the Great Depression – would be in Wolfsburg, where Volkswagen is based.

He has also indicated that he favoured Martin Winterkorn, chief executive of Volkswagen, as head of the new group, spurring fresh doubts about the future of Porsche’s management team.

Mr Piech said it was unlikely that Wendelin Wiedeking, Porsche’s chief executive, would be happy to stay on in a more ‘lowly’ role.

Porsche declined to comment.

Meanwhile, Bafin, the regulator, launched its second investigation in seven months after a German press report alleged that Porsche had informed Lower Saxony, Volkswagen’s second largest stakeholder, in February 2008 about its intentions to lift its stake in the volume manufacturer to 75 per cent. (Financial Times: May 13).

GM shares sink to new low

Shares in struggling vehicle manufacturer General Motors sunk to their lowest level in more than 70 years amid increasingly loud signals that the company is heading for bankruptcy protection within the next three weeks.

Shares fell by 20 per cent after senior GM executives sold stock worth $315,000 to leave shares trading at $1.15.

The White House has given GM until June 1 to restructure and win more financial aid. If the company fails to cut its debts and costs by the deadline, it will be forced to file for Chapter 11 bankruptcy.

GM’s shareholders are in a lose-lose situation, according to analysts, because their investments would be all but wiped out regardless of whether the company goes bust. (The Times/Financial Times: May 13).

Ford shares tumble on new issue move

Shares in Ford have fallen almost 18 per cent after the carmaker announced plans to issue 300 million common shares to fund healthcare for retired workers.

The new shares will be sold at a price of $4.75 each. The existing shares closed down $1.07 at $5.01.

The share issue is set to raise $1.4 billion (£914m). Ford must make a $1.2bn cash payment to its Voluntary Employee Beneficiary Association by December 31.

It will be the first public share offering at Ford since the carmaker became a publicly traded company in 1956.

Chief executive Alan Mulally said selling the stock was ‘another key step in our plan to transform Ford into an exciting, viable enterprise poised to return to profitability’. (BBC.co.uk: May 13).

Three bidders line-up for Saab

Fiat, Chinese manufacturer Geely and an unnamed German bank are reportedly the three bidders most likely to buy Saab, according to a General Motors’ source.

A Swedish newspaper also suggested that GM boss Fritz Henderson had already dismissed Geely’s bid for Saab for fear of Chinese-market competition for the luxury Buick brand, which is owned by GM.

Neither Saab nor GM would officially confirm the list of bidders.

Geely has officially denied any plans to bid for Saab, although representatives of Geely have reportedly visited Saab’s Trollhattan headquarters. (AM-Online: May 13).