World financial crisis

Carmakers ask for state help amid grim job news

Article published on the 2008-12-03 Latest update 2008-12-03 11:12 TU

Cars parked in a lot in Causse-Wallon automobile transport company in Hordain, northern France.
(Credit: Reuters)

Europe's stockmarkets fell in early trading Wednesday, despite slight recoveries in the US and Asia. In the US, the big three Detroit car manufacturers General Motors, Ford and Chrysler all submitted detailed business plans to US Congress on Tuesday as they struggle to turnaround massive losses.

Europe’s stock markets do not seem to have been encouraged by Wall Street's recovery, apparently inspired by the hope that a US government rescue package for the car industry would be negotiated.

In Asia, shares bounced back after heavy losses on Tuesday with Tokyo closing up almost two per cent and Hong Kong climbing just over one per cent.

Wall Street was still being influenced by the ongoing car industry bailout saga and in a surprising admission the well paid Chief Executives of the big three agreed to work for a salary of just one dollar.

Detroit’s car manufacturers are asking for almost 27 billion euros and their business plans all outline restructuring and ultimately the development of energy efficient vehicles.

Bleak financial news from Europe has failed to reassure European stock markets despite the the announcement by finance ministers of a stimulus package totalling 200 billion euros.

In Germany new-car registrations have dropped by 18 per cent according to figures released today.

In Sweden the government has ruled out a takeover of Volvo which is owned by Ford, while Saab which is owned by General Motors have also appealed for state aid, but the government says it, “will not jeopardise taxpayers’ money,” said Enterprise and Energy Minister Maud Olofsson.

Failing Spanish airline Iberia has announced it could cut up to 1,000 jobs as part of a three year deal with British Airways. Meanwhile, in Italy, telecommunications group Telecom Italia said it would cut 4,000 jobs as part of restructuring.