Daily News Briefs: April 24, 2012
Here's what we have our eye on today:
- Volkswagen, the Detroit Three and other automakers drafted a plan to speed the implementation of alternatives to nylon resin, which the industry uses for brake and fuel lines, Bloomberg News reports. An explosion March 31 at Evonik Industry's Germany plant cut global production of a chemical in the resin by 50 percent, raising the specter of production shutdowns until other companies stepped up alternative supplies. Car shoppers, join the industry in a collective sigh of relief.
- GM CEO Dan Akerson called the automaker's European Opel division a "four-alarm fire" today. GM's European units, which include Opel, have lost $747 million in 2011 and more than $14 billion since 1999. Akerson spoke at a conference in Beijing, saying it will be "a while" before the automaker can fix Opel, according to Automotive News. Falling consumer confidence amid an ongoing debt crisis has stymied auto sales in Europe, leaving the continent's auto industry with at least 20% too much capacity, by some estimates. We have a handful of GM-badged Opels here, including the Buick Regal and the erstwhile Saturn Astra, so keep an eye on this.
- Nissan CEO Carlos Ghosn told Bloomberg News Monday that the strength of the Japanese yen represents a "1,000-pound gorilla" for the automaker's profitability. With the fiscal year ending in March, analysts expect Nissan's revenue to break 10 trillion yen for the first time since 2008. The yen, which traded around 81 to the dollar today, spent most of the 2000s trading in the hundreds; it has prompted Nissan to shift production out of Japan, like moving Infiniti manufacturing to China and the U.S.
- Fitch Ratings bumped Ford's credit to investment grade, taking the automaker's debt out of junk status for the first time since 2005, The Detroit News reports. Fitch cited improved products and financial performance — no doubt highlighted by 10 consecutive quarters of profits, and potentially 11 after Ford reports first-quarter profits this Friday. The new rating should allow Ford to issue debt at lower rates, which will ultimately help the Blue Oval stay in the black.