IF REPORTS are to be believed, there is strong interest in acquiring General Motors’ European operations, including its Vauxhall plant, at Ellesmere Port.
Fiat is showing interest, as are a range of other car industry players and even some financial investors.
This is a good thing. Yet concerns were expressed this week by union leaders that an Italian deal would be bad news for the industry in this country. While it is true that Fiat would be biting off a large mouthful with GM Europe, it should be remembered that the Turin car-maker is in better shape today than it was a few years ago.
The thing is, there aren’t many other decent options from the list of potential buyers. The union objections raise the question “if not Fiat, then who would be best for Vauxhall?” A car components manufacturer in Canada? I think not.
As for the private equity investors supposedly in the frame, you would wonder were they would get the money from. Banks are still not lending money to industry, so why do this crop of financial investors think they’ll find the funds to complete the deal?
Another party that is certainly not coming to Vauxhall’s rescue is the British Government. Lord Mandelson gives the impression of being dogmatically opposed to government intervention in the car industry, while Alistair Darling wouldn’t be able to find the necessary investment cash from his coffers and would in any case be wary of accepting the potential liabilities that could come with it.
The experience of Chrysler last week makes it all the more urgent that somebody rides to the rescue of the plant. Chrysler bosses may sound optimistic that the firm will be up and running again in two months’ time, but that sounds a bit too hopeful to me.
So all that’s left is the Italian offer. It’s a classic case of beggars can’t be choosers. A Fiat deal would give real hope to GM’s European factories and the suppliers whose livelihoods depend on them.
Vauxhall workers and everybody else in the UK car industry may have to learn to be grateful for Fiat’s act of faith in the future and learn to say grazie.
PEEL Holdings’ decision to put a stake in Liverpool John Lennon and two other airports up for sale is puzzling.
Why have they done it?
The firm has done an admirable job during the past decade developing its three regional airports that it owns, without the support of anybody else. So why start looking for outside help now?
As with many other property firms, it’s not impossible the group is finding current economic conditions tough and needs to reshuffle its finances to keep its bankers from fretting too much.
Maybe that’s too dark an analysis, as Peel is also investing £15m in the redevelopment of Liverpool’s airport. And if it takes outside investment to achieve that, then so be it.
However, I can’t help thinking that the task of finding an outside investor would be all the easier if Liverpool JLA had succeeded in breaking into profit at some point in the last 10 years, but that looks a distant prospect as passenger figures slip back in the recession.
It is, of course, a difficult time to attract any investment. It will be interesting to see if NM Rothschild, the merchant bank appointed to raise the money, will succeed and what cost to Peel and its ultimate shareholder, John Whittaker.
