Gov't foresees 5-year GM turnaround
DETROIT, May 30 (UPI) -- The White House's plans to recover the $50 billion to be sunk into General Motors depends on a quick rebound by the U.S. automaker, analysts say.
A preliminary Treasury Department estimate foresees the nearly bankrupt company rebounding within five years, a scenario that some industry observers view as unrealistic for a slimmed-down GM, especially given the state of the wider economy, The Washington Post reported Saturday.
Brian Bethune, chief U.S. financial economist for IHS Global Insight, told the newspaper he believed the five-year assumption was "extremely optimistic," adding, "Whenever a company goes through that deep of a restructuring, there are all kinds of risks. This is not a nip-and-tuck exercise. This is major surgery."
The U.S. and Canadian governments will own 72.5 percent of GM after planned bankruptcy, in which the automaker would seek to shed some of its considerable debt burden and eliminate brands, dealerships and factories. The United Auto Workers union Friday ratified contract changes that will help General Motors cut more than $1 billion in labor costs.
"It's not a completely unreasonable estimate -- if the market recovers and if they really invest in GM's capabilities," countered Case Western Reserve University's Susan Helper.
Chrysler judge waits to issue ruling
NEW YORK, May 30 (UPI) -- A U.S. bankruptcy court judge says he will wait to deliver a ruling on Chrysler LLC's proposed sale of most of its assets to Italy's Fiat SpA.
After a three-day hearing in a New York bankruptcy courtroom ended Friday, Judge Arthur Gonzalez said he would wait until Monday to issue his written opinion the proposed sale, which the U.S. automaker says is crucial to its survival, The Wall Street Journal reported Saturday.
Gonzalez's opinion, if released on Monday, would finalize the bankrupt Chrysler's sale to Fiat on the same day that fellow "Big Three" automaker General Motors is expected to file its own bankruptcy petition, observers said.
At the Chrysler hearing, lawyers representing a group of Indiana pension funds owning a small part of Chrysler's senior debt objected to the sale, arguing that the U.S. government set up its restructuring plan to benefit the United Auto Workers union, whom they say are making out too well in the deal.
The funds also said the U.S. government doesn't have the right to finance Chrysler's overhaul under the Troubled Asset Relief Program or the Emergency Economic Stabilization Act, but a government lawyer called that claim "just plain wrong," the Journal reported.
Vauxhall sale to save 5,000 British jobs
LONDON, May 30 (UPI) -- The future of British automaker Vauxhall appeared secure Saturday after owner General Motors agreed to sell it, observers said.
Vauxhall, which employs 5,000 people at two British plants, was set to be sold to Canadian parts maker Magna International along with GM's Opel operations in Europe as the U.S. automaker agreed to a deal Friday. That was good news for Vauxhall, whose workers were anxious about their fate, The Times of London reported.
British Business Secretary Peter Mandelson told reporters it was "pretty likely" Magna and its partner, the Russian state-controlled bank Sberbank, will be the new "shared owners" of Vauxhall.
"I will be seeking from them reinforcement of the commitment they gave to me last week to continued production by Vauxhall here in the U.K.," Mandelson said. "They made clear to me that they are committed to continued production by Vauxhall in the U.K. I take that at face value."
"The government needs to work with whoever buys GM Europe to ensure that the plants and jobs in the U.K. are protected," said a cautious statement from Unite, Vauxhall's worker union.
EU may force other browsers into Windows
BRUSSELS, May 30 (UPI) -- European Union regulators are negotiating with Microsoft Corp. to force it to include Internet browser choices in its Windows operating system, sources say.
The long-running battle between EU Competition Commissioner Neelie Kroes and the U.S. software giant has reached a new stage as efforts to make Microsoft "unbundle" its Internet Explorer Web browser from Windows have been superceded by a push to instead make it include an array of browser choices to be picked by the user on a "ballot screen," Saturday's Wall Street Journal reported unnamed sources saying.
The inclusion of additional browsers is seen as a way of diluting Microsoft's advantage in the field. The newspaper said the EU has yet to make a final ruling on the issue, part of a series of conflicts between Kroes and Microsoft that have ended in more than $2 billion in antitrust fines.
A spokesman for Microsoft told the Journal it is committed to "full compliance" with EU law.
"To be effective, a remedy must present users with a real choice in browsers, and make it easy for them to execute that choice," Julia Holtz, senior competition counsel in Europe for Google Inc., told the newspaper.
