EoW March 2007

Transat lant ic Cable

US duties on imports of two types of steel from 14 countries were lifted on 1 st January after an independent US trade panel ruled that ending them would not harm American producers. The US International Trade Commission on 14 th December voted 6-0 to lift duties on steel plate from 11 countries: the United Kingdom, Belgium, Finland, Germany, Poland, Romania, Spain, Sweden, Mexico, Brazil, and Taiwan. It voted 4-2 to lift 13-year-old duties on corrosion-resistant steel from four countries: France, Canada, Australia, and Japan. Duties will remain on corrosion-resistant steel imports from Germany and South Korea, the commission ruled. With much of the steel going for auto production, Ford Motor Co, General Motors Corp, Toyota Motor Corp, and other US-based automakers had petitioned to have the tariffs lifted. But steelmakers such as US Steel Corp, the world’s seventh-largest producer, argued that removing the tariffs would undermine laws meant to protect US manufacturers from unfair imports and lead to layoffs and plant closings. They also said an expected surge in excess Chinese steel might lead to a flood of new imports into the US. ❈

Turnaround in GM Europe

General Motors receives some good news at last – from across the Atlantic

As it strives to recoup its losses at home, General Motors Corp is seeing higher European sales and profits, thanks to a long-awaited turnaround at GM Europe. The division, which in 2005 lost $375 million in its sixth year of steady losses totaling $3.9 billion, posted an after tax profit of $196 million for the first nine months of 2006. GM Europe operates 11 production and assembly facilities in eight countries and employs approximately 64,500 people. But its star performer by far is the Adam Opel unit, in Germany, which accounts for 80% of GM’s European sales and has benefited hugely from the successful launch of new models, notably the Opel Corsa: a sub-compact selling for $14,300. When the Corsa was introduced on 7 th October, Opel management hoped to sell 75,000 by the end of 2006. But on 30 th November a senior European correspondent for Business Week , Gail Edmondson, was able to write that orders had already topped 150,000 and sales were expected to far overshoot the initial target. As to 2007, ‘Opel is aiming to sell 375,000 of the sporty Corsa, challenging Volkswagen’s Polo for European leadership’ in the sub-compact segment. (‘GM’s Turnaround in Europe’). Of even greater importance, according to Ms Edmondson, Opel’s entire brand image has acquired ‘new sheen’ for European buyers as GM Europe President and former Opel boss Carl-Peter Forster has invested heavily in better engineering and ‘vastly improved’ handling, quality, and design. European warranty claims for Opel and the sister Vauxhall brand have declined 70% since 2000, while warranty costs per vehicle are down 36% over the same period. To stretch Opel’s research and development investment, Mr Forster and General Motors vice-chairman Robert Lutz, another BMW veteran, instituted a transatlantic collaboration between Opel and the US-based Saturn brand that has met with early success. “It leverages our engineering costs and will allow us to introduce models that otherwise might not have been viable alone,” Mr Forster told Business Week .

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EuroWire – March 2007 Euro ire – January 2 06