European shares get boost from Iran nuclear deal

LONDON, November 25, 2009 of Reuters)--European shares led to a five year-high, and Germany's DAX set a new record on Monday with airline stocks and French automakers getting a big boost from nuclear agreement signed between the Iran and world powers.

The deal eased geopolitical tensions and raised risk appetite in markets worldwide, as the West sanctions against the Iran in return for Tehran relaxed curbing its nuclear programme at least temporarily.

Travel and leisure stocks rose 1.6 percent, led top sectoral gainers, airlines.

Energy stocks pressure on oil prices after the deal that included hitting the easing of a ban on European insurance for shipments of Iranian oil, the smooth Iran's crude oil exports can help its major Asian customers.

"The Iran deal helps risk-sensitive stocks in the short term, but the equity risk premium is only slightly lower and shares have only a little bit higher, came," Jeremy Batstone-Carr, analyst at Charles Stanley, said.

"It's a good start, but it is too early to say what will be the long-term effects of the transaction."

IAG, the owner of British Airways and Iberia, rose by 2.4 percent, Air France-KLM advanced 1.8 percent and EasyJet gained 1.3 percent.

French automaker PSA Peugeot Citroen and Renault, which had a considerable threat to the Iranian car market of Western sanctions on Tehran have been tightened, 4.6 per cent and 1 per cent or won. Energy stocks fell but 0.6 percent.

1531 GMT was the Pan European FTSEurofirst 300 0.4 percent at 1.301,72 points, while Germany's DAX Rose 0.8 percent, close set a record high.

The volatility index VSTOXX, widely followed barometer for investor nerves about the market touched its lowest level since 2007.

The eurozone blue chip-Euro STOXX 50 index rose 0.4 percent to 3.068,48 points, with technical analysts positive on the index-Outlook.

"The measured tendency of the Euro STOXX 50 index remains optimistic and positive with the climb of the 200-day moving average," said Murray Gunn, Director of technical analysis at the HSBC Bank.

He saw that the support the index at their recent the 3.016 low and a movement among 2.999, said a deeply on 8 November the first sign would be that the trend changed.

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Ford closing 3 European plants, cutting 6,000 jobs

Dirk Waem / AFP - Getty Images

Ford workers comfort each other on Wednesday in front of the main entrance of Ford's Belgian assembly plant in Genk. Ford announced that it would close the Genk plant by the end of 2014. When sub-contractors are included, some 10,500 people depend on Ford Genk for work.

By Paul A. Eisenstein, The Detroit Bureau
Its European losses likely to be significantly worse than originally forecast, Ford will close or sharply cut back operations at three of its European plants as part of a major restructuring meant to cope with the continent’s economic woes and the collapse of the European automotive market.

Ford now expects to lose $1.5 billion in Europe this year, a 50% increase over the already gloomy forecast it made just three months ago. With sales falling even faster than the overall market, Ford says it will cut capacity in Europe by 18%.

That will include the closure of a truck assembly plant in Southampton, England and a tooling and stamping facility in Dagenham. The maker earlier this week advised union leaders that it would close an assembly plant in Genk, Belgium.

All told, about 1,500 jobs will be lost in the UK – out of the current British total workforce of 11,500. Along with the closure in Belgium the total jobs lost to the restructuring could come to as much as 6,000, though it is possible the automaker might have to add some new employees at a factory in Valencia, Spain that will take over production of the Ford Mondeo and other models currently assembled in Genk.

“We recognize the impact our actions will have on many employees and their families in Europe, and we will work together with all stakeholders during this necessary transformation of our business,” said Ford’s president and CEO, Alan Mulally.

The former Boeing executive also oversaw a number of production cuts in the U.S. after moving to Detroit six years ago – just as the U.S. auto industry began to collapse under the weight of a faltering economy and the U.S. Big Three makers began fighting for their survival.

The situation is not much different in Europe right now. With southern nations including Spain, Greece and Italy crushed by sovereign debt problems the entire continent is in retrenchment, car sales plunging even in relatively prosperous Germany.

That has forced PSA Peugeot Citroen to seek a bailout from the French government and lay out plans to close an under-utilized assembly plant. Opel is restructuring, as well, and also plans to close one or more factories.

European automotive analysts generally agree that there are about eight more assembly plants than necessary to meet the continent’s needs – even accounting for exports. Until recently, however, makers seemed to be locked in a stalemate, no one wanting to make the first cut.

Ford expects the latest moves to reduce capacity in Europe – excluding Russia – by 18%, or about 355,000 units. The maker saw its sales tumble nearly 15% last month, even more than the overall market’s 10% decline.

Despite the worsening European losses, Mulally forecast Ford will remain in the black worldwide for 2012 – and should actually see third-quarter earnings rise a bit over the previous quarter.

The maker expects to shift production of the Transit currently produced in Southampton to a factory in Turkey also building the truck. It will add production of the Transit in the U.S. next year, as well, to replace the aging American Ford E-Van.

The planned closure of the British operations drew a sharp union rebuke, Len McCluskey, head of the Unite union said the move was handled “disgracefully,” considering that Ford had recently indicated the plant would get new work. He warned Unite would attempt to block the closures.

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Despite woes, Volt wins European car award

By Paul A. Eisenstein, The Detroit Bureau

It’s been a tough year for the Chevrolet Volt, General Motors’ once-celebrated plug-in hybrid.  But perhaps it’s about to see its fortunes turn as a jury of Continental motoring journalists declare Volt and its Opel Ampera sibling the European Car of the year.

That victory comes 14 months after the Volt took North American Car of the Year honors – but, oh, how much has happened in-between.  Just last week, GM announced it will shut down production of Volt and Ampera for five weeks due to excess inventory, a problem exacerbated by reports that several Volt battery packs caught fire after U.S. crash tests.

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But while that – and a controversial hearing by a U.S. House subcommittee — might have briefly short-circuited Volt sales, it didn’t seem to unplug enthusiasm among European journalists.  The 59 members of the European Car of the Year jury awarded Volt 330 points, nearly 20 percent more than its nearest competitor, the Volkswagen Up!, with 281 points  Ford’s newly-updated Focus came in third, with 256 points.

“The Ampera and Volt won in a field of strong competitors, particularly on account of the outstanding technical progress they reflect,” explained Hakan Matson, president of the EUCOTY panel and an auto critic for Dagens Industri. “With its range extender, the Ampera presents a very sound new concept on our way to e-mobility. By solving the problem of range anxiety, it is a remarkable step into the future of electrification.”

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If anything, the EUCOTY award comes as double vindication for the Chevrolet Volt, which saw its chief rival, the Nissan Leaf, take the annual award – which is handed out just prior to the yearly Geneva Motor Show – in 2011.

The launch of the European version of the Volt, the Opel Ampera, was delayed several times and only began last month.  GM claims it has so far received 7,000 advance orders for the extended-range electric vehicle, with a target of selling 10,000 in Europe this year.

But all bets are off on where sales will actually come in now that GM has plans to shut down the Detroit assembly plant producing Volt and Ampera for five weeks starting on March 19th.  The problem is primarily due to excess inventory in North America.

GM Shutting Down Volt Production for Five Weeks

Sales fell about 20 percent short of a 10,000 unit target last year, though momentum was building in the final months of 2011.  But that was before word leaked out that two Volt battery packs had caught fire weeks after being crash-tested by the National Highway Traffic Safety Administration. It now appears NHTSA was at least partially to blame for failing to discharge the batteries after the test, much as the agency drains gas tanks on wrecked vehicles, post-testing.

GM announced minor changes to the Volt design to further reduce the risk of problems and federal regulators then ended an investigation into the problem.  But hearings on Capitol Hill went ahead – in part serving as a medium for GOP lawmakers to again raise questions about the 2009 bailout of General Motors.

February sales of the Volt rebounded by 60 percent — but they are still well short of what would be needed to meet GM’s initial 2012 target. The maker had hoped to produce 60,000 Volts and Amperas this year, 75 percent of them bound for the U.S.

At the current rate, even with a strong showing in Europe, demand would likely miss that by at least half.

It remains to be seen whether the latest award for the Chevy Volt will help revive its momentum while also boosting demand for the new Opel Ampera.

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European car show upbeat, despite economy

FRANKFURT — Stock markets around the globe are plunging, consumers are retrenching and the threat of another recession seems to be on everyone’s mind these days.

Well, almost everyone. Optimism is the mood of the moment as the biennial Frankfurt Motor Show gets under way this week in Germany.

Never mind that Ford warned recently about sales missing estimates. No matter that automotive executives are watching the economic problems that are threatening to tear the European Union apart. Ford “comes to Europe with optimism,” insisted Stephen Odell, CEO of Ford of Europe, in a speech previewing the carmaker’s new line-up at the German car show.

In fact, Ford may have more reason for optimism than other automakers. The automaker has regained significant sales momentum this year after years of sales and market share declines that only complicated the problems it had in its home market. It has been sitting in the number two spot in Europe, this year, just behind Volkswagen AG — which is itself likely to be the second-largest automaker in the world when the numbers are added up for 2011, thanks to Toyota’s crushing production problems following the March earthquake and tsunami in Japan.

It’s not surprising, of course, to hear manufacturers speak of their hopes and aspirations — it’s what economists suggest consumers want to hear. And nothing spurs optimism more in the auto industry than new sheet metal. This year, there’s plenty of it on show in Frankfurt.

After delaying the introduction of many new models during the worst of the global economic downturn, manufacturers have opened the spigot on their product pipelines. Some 100 new vehicles were launched during the two media that came ahead of the show’s official opening to the public, according to estimates.

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Perhaps the only ones visibly worried about the increase in car introductions were the 10,000-odd reporters gathered in the German financial capital to try to cover the event. Organizers have this year had to double up many of the news conference slots. Most of them were also cut short to just 15 minutes. That was complicated by the fact that it’s nearly a kilometer from one end of the sprawling Frankfurt Messe exhibition center to the other.

In hopes of standing out from the crowd, carmakers have been forced to stage advance “backgrounders,” hoping to get journalists to write more about their products than those of their competitors. The Internet is filled with more than a few “leaked” images that appeared to be stage-managed by the manufacturers themselves.

On the night before the first official media day, there were long lines of limousines and buses outside most of Frankfurt’s major hotels escorting reporters to parties where they could take a look at products they might not get to see during the frenzied media previews.

Volkswagen, for example, provided a look at all its dozen brands’ offerings, including the new production version of the VW Up! microcar, as well as a pair of battery-powered vehicles from its upscale Audi brand.

There are no formal plans to put the A2 show car and Audi Urban Concept vehicles into production — yet. But it’s clear that the various Volkswagen subsidiaries, from pedestrian Seat to luxurious Audi, are convinced that European buyers will continue to look for smaller and greener products that can help them navigate crowded urban roads and survive record fuel prices that, in some national markets, have topped $10 a gallon.

Small and fuel-efficient models are everywhere to be found at the various Frankfurt halls, and even luxury automakers are acknowledging the trend. Lexus has a new version of its GS450h hybrid. And Jaguar’s concept offering, the C-X16, would be, if it went into production, the smallest model the British marque has turned out in over half a century.

Mercedes-Benz, meanwhile, has a striking liquid silver-painted concept dubbed the F125! (exclamation points are in high demand this year). The F125! can run on clean, light hydrogen gas, while BMW stages the formal launch of its new “i” brand with the debut of the i8 and i3 battery-powered cars.

In typical form, the German marques dominate Frankfurt, much as the French brands show off every even year when the event moves to Paris. But with 50 different brands on display in Frankfurt, Teutonic carmakers are getting plenty of competition this year.

The Koreans are proving particularly aggressive, with Kia revealing a coupe-like sport sedan dubbed the GT and Hyundai revealing the i30, which will also be sold in the U.S. as a wagon version of the wildly popular Elantra.

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The move by Hyundai underscores one of the significant changes that has reshaped both the auto show circuit and the industry as a whole in recent years: In decades past, a sizable majority of the products shown in Europe would never cross the Atlantic. But these days carmakers are pushing for ever-improved economies of scale, and that means more global products.

The smallest offerings, such as the Mercedes A- and B-Class models, still aren’t coming to the U.S., although that might change if fuel prices at home keep rising, company officials suggest.

Ford’s pre-show preview brought the unveiling of the Evos, a stunning coupe-like sedan with four gullwing-style doors.

“This is the new face of Ford,” said the carmaker’s global design chief J Mays. Although the car’s gullwing doors are “just showbiz,” according to Mays, Ford sources confirmed that many of the Evos’ design details will reappear on the stage at the Detroit Auto Show next January in the form of replacement versions of the U.S. Fusion sedan and European Mondeo.

Once completely separate vehicles, the two cars are now distinct only in their nameplates. By developing common vehicles that can be sold around the world Ford can afford to develop more niche vehicles to target selective groups of consumers.

That’s a strategy that most makers are now adopting, which is why there are 100 or more products all vying for attention in Frankfurt.

The Frankfurt Motor Show, the world’s biggest auto show, runs until Sept. 25.

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European car show upbeat, despite economy

AppId is over the quota AppId is over the quota FRANKFURT — Stock markets around the globe are plunging, consumers are retrenching and the threat of another recession seems to be on everyone’s mind these days.

Well, almost everyone. Optimism is the mood of the moment as the biennial Frankfurt Motor Show gets under way this week in Germany.

Never mind that Ford warned recently about sales missing estimates. No matter that automotive executives are watching the economic problems that are threatening to tear the European Union apart. Ford “comes to Europe with optimism,” insisted Stephen Odell, CEO of Ford of Europe, in a speech previewing the carmaker’s new line-up at the German car show.

In fact, Ford may have more reason for optimism than other automakers. The automaker has regained significant sales momentum this year after years of sales and market share declines that only complicated the problems it had in its home market. It has been sitting in the number two spot in Europe, this year, just behind Volkswagen AG — which is itself likely to be the second-largest automaker in the world when the numbers are added up for 2011, thanks to Toyota’s crushing production problems following the March earthquake and tsunami in Japan.

It’s not surprising, of course, to hear manufacturers speak of their hopes and aspirations — it’s what economists suggest consumers want to hear. And nothing spurs optimism more in the auto industry than new sheet metal. This year, there’s plenty of it on show in Frankfurt.

After delaying the introduction of many new models during the worst of the global economic downturn, manufacturers have opened the spigot on their product pipelines. Some 100 new vehicles were launched during the two media that came ahead of the show’s official opening to the public, according to estimates.

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Perhaps the only ones visibly worried about the increase in car introductions were the 10,000-odd reporters gathered in the German financial capital to try to cover the event. Organizers have this year had to double up many of the news conference slots. Most of them were also cut short to just 15 minutes. That was complicated by the fact that it’s nearly a kilometer from one end of the sprawling Frankfurt Messe exhibition center to the other.

In hopes of standing out from the crowd, carmakers have been forced to stage advance “backgrounders,” hoping to get journalists to write more about their products than those of their competitors. The Internet is filled with more than a few “leaked” images that appeared to be stage-managed by the manufacturers themselves.

On the night before the first official media day, there were long lines of limousines and buses outside most of Frankfurt’s major hotels escorting reporters to parties where they could take a look at products they might not get to see during the frenzied media previews.

Volkswagen, for example, provided a look at all its dozen brands’ offerings, including the new production version of the VW Up! microcar, as well as a pair of battery-powered vehicles from its upscale Audi brand.

There are no formal plans to put the A2 show car and Audi Urban Concept vehicles into production — yet. But it’s clear that the various Volkswagen subsidiaries, from pedestrian Seat to luxurious Audi, are convinced that European buyers will continue to look for smaller and greener products that can help them navigate crowded urban roads and survive record fuel prices that, in some national markets, have topped $10 a gallon.

Small and fuel-efficient models are everywhere to be found at the various Frankfurt halls, and even luxury automakers are acknowledging the trend. Lexus has a new version of its GS450h hybrid. And Jaguar’s concept offering, the C-X16, would be, if it went into production, the smallest model the British marque has turned out in over half a century.

Mercedes-Benz, meanwhile, has a striking liquid silver-painted concept dubbed the F125! (exclamation points are in high demand this year). The F125! can run on clean, light hydrogen gas, while BMW stages the formal launch of its new “i” brand with the debut of the i8 and i3 battery-powered cars.

In typical form, the German marques dominate Frankfurt, much as the French brands show off every even year when the event moves to Paris. But with 50 different brands on display in Frankfurt, Teutonic carmakers are getting plenty of competition this year.

The Koreans are proving particularly aggressive, with Kia revealing a coupe-like sport sedan dubbed the GT and Hyundai revealing the i30, which will also be sold in the U.S. as a wagon version of the wildly popular Elantra.

The move by Hyundai underscores one of the significant changes that has reshaped both the auto show circuit and the industry as a whole in recent years: In decades past, a sizable majority of the products shown in Europe would never cross the Atlantic. But these days carmakers are pushing for ever-improved economies of scale, and that means more global products.

The smallest offerings, such as the Mercedes A- and B-Class models, still aren’t coming to the U.S., although that might change if fuel prices at home keep rising, company officials suggest.

Ford’s pre-show preview brought the unveiling of the Evos, a stunning coupe-like sedan with four gullwing-style doors.

“This is the new face of Ford,” said the carmaker’s global design chief J Mays. Although the car’s gullwing doors are “just showbiz,” according to Mays, Ford sources confirmed that many of the Evos’ design details will reappear on the stage at the Detroit Auto Show next January in the form of replacement versions of the U.S. Fusion sedan and European Mondeo.

Once completely separate vehicles, the two cars are now distinct only in their nameplates. By developing common vehicles that can be sold around the world Ford can afford to develop more niche vehicles to target selective groups of consumers.

That’s a strategy that most makers are now adopting, which is why there are 100 or more products all vying for attention in Frankfurt.

The Frankfurt Motor Show, the world’s biggest auto show, runs until Sept. 25.

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GM CEO says that the European car business is not for sale

DETROIT - General Motors CEO says that European car companies is not for sale.

Media have reported that GM wanted to sell the struggling operations that include the brands Opel and Vauxhall.

Opel not to "sell", said CEO Daniel Akerson reporter Wednesday in Detroit, Michigan on GM Europe's largest brand.

GM Europe has been a money loser for GM, but it is an important center of engineering and design. As former CEO Fritz Henderson tried to sell the business shortly after GM 2009 bankruptcy he was overruled by the Board, because some of the GM based designed by Opel on basics, small and medium-sized cars.

However, European sales caused a loss of $1.8 billion for GM Europe in the past year high labour costs, restructuring costs and sagging. GM, however has cost-cutting progress recently.

Reports in Germany mirrors and auto picture, publications have said that GM Europe could be sold to a Chinese company or Volkswagen AG. GM has been called the reports speculation, but has not been told that the business as a sale off block.

The company touted annual meeting in June shareholders, Akerson progress in Europe repeatedly in the last two years.

"It is not only an abyss, the we looked in 18 to 24 months,", he said.

The European business employs 40,000 people.

Copyright 2011 associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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