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CARS

GM chief proposes Volvo-Saab merger

Senior General Motors executive Bob Lutz has suggested that a solution to the problems faced by Swedish car firms Volvo and Saab would be to merge them.

GM chief proposes Volvo-Saab merger

“That way both we and Ford get rid of a problem,” Lutz told news agency TT in Geneva.

The 77-year-old US car industry legend is in Geneva for an industry exhibition. Swedish news agency TT caught up with him in the airport and he was candid over GM’s attitude to the troubled Swedish car-maker.

In its application to the US government for billion dollar loans earmarked to secure GM’s own future the firm has confirmed that its financial lifeline to Saab will be cut at the end of the year, at the latest, TT writes.

Lutz confirms that the main objective remains to find a buyer for Saab.

“But I think it will be hard. Buyers also look at the figures. Just like the Swedish government has done. Who wants to buy a firm that has reported losses, year after year,” he queries.

Saab is planning to display its new model 9-3 X – basically a tougher variant of the 9-3 – at the Geneva fair.

While Lutz gave a further sign of no confidence in the Saab by confirming to TT that he has no intention of attending the launch, Saab CEO Jan Åke Jonsson is more upbeat about the firm’s prospects.

Jonsson claims that there are seven or eight parties which have expressed an interest in buying the firm.

Meanwhile also in Geneva Volvo Cars CEO Stephen Odell has predicted that the car industry will rebound in the autumn and is not interested in rumours of a sale to a Chinese firm.

“I have my hands full running a company,” Odell said to TT, dismissing speculation that the firm’s leadership were in the Swiss city to canvass for potential suitors.

Odell confirms that the Swedish government has promised to issue 100 percent state guarantees for a loan of five billion kronor ($546 million) from the European Investment Bank (EIB).

Volvo Cars is the first firm to apply for emergency loans from the EIB’s 220 billion kronor fund for the crisis hit European car industry.

Swedish enterprise minister Maud Olofsson has said that the Swedish government is not prepared to issue guarantees to support Saab’s own loan application from the EIB unless it can be shown that there is a party willing to commit to running the company.

Jan Åke Jonsson confirmed to TT in Geneva however that Saab has been given encouragement by the government to pursue its loan application even before such state guarantees can be made.

CARS

From lizards to water, eco-bumps snag Tesla’s giant Berlin car factory

In the green forest outside Berlin, a David and Goliath-style battle is playing out between electric carmaker Tesla and environmental campaigners who want to stop its planned "gigafactory".

From lizards to water, eco-bumps snag Tesla's giant Berlin car factory
Tesla's gigafactory outside the doors of Berlin. dpa-Zentralbild | Patrick Pleul

“When I saw on TV that the Tesla factory was going to be built here, I couldn’t believe it,” said Steffen Schorch, driving his trusty German-made car.

The 60-year-old from Erkner village in the Berlin commuter belt has become one of the faces of the fight against the US auto giant’s first European factory, due to open in the Brandenburg region near Berlin in July.

“Tesla needs far too much water, and the region does not have this water,” said the environmental activist, a local representative of the Nabu ecologist campaign group.

Announced in November 2019, Tesla’s gigafactory project was warmly welcomed as an endorsement of the “Made in Germany” quality mark – but was immediately met with opposition from local residents.

Demonstrations, legal action, open letters – residents have done everything in their power to delay the project, supported by powerful
environmental campaign groups Nabu and Gruene Liga.

Tesla was forced to temporarily suspend forest clearing last year after campaigners won an injunction over threats to the habitats of resident lizards and snakes during their winter slumber.

READ MORE: Is Germany’s Volkswagen becoming ‘the new Tesla’ as it ramps up e-vehicle production?

And now they have focused their attention on water consumption – which could reach up to 3.6 million cubic metres a year, or around 30 percent of the region’s available supply, according to the ZDF public broadcaster.

The extra demand could place a huge burden on a region already affected by water shortages and hit by summer droughts for the past three years.

Local residents and environmentalists are also concerned about the impact on the wetlands, an important source of biodiversity in the region.

Tesla Street

“The water situation is bad, and will get worse,” Heiko Baschin, a spokesman for the neighbourhood association IG Freienbrink, told AFP.

Brandenburg’s environment minister Axel Vogel sought to play down the issue, saying in March that “capacity has not been exceeded for now”.

But the authorities admit that “the impact of droughts is significant” and have set up a working group to examine the issue in the long term.

The gigafactory is set to sprawl over 300 hectares – equivalent to approximately 560 football fields – southwest of the German capital.

Tesla is aiming to produce 500,000 electric vehicles a year at the plant, which will also be home to “the largest battery factory in the world”,
according to group boss Elon Musk.

In a little over a year and a half, swathes of coniferous forest have already been cleared to make way for vast concrete rectangles on a red earth base, accessed via the already iconic Tesla Strasse (Tesla Street).

German bureaucracy

The new site still has only provisional construction permits, but Tesla has been authorised by local officials to begin work at its own risk.

Final approval depends on an assessment of the project’s environmental impact – including the issue of water.

In theory, if approval is not granted, Tesla will have to dismantle the entire complex at its own expense.

But “pressure is being exerted (on the regulatory authorities), linked to Tesla’s significant investment”, Gruene Liga’s Michael Greschow told AFP.

In early April, Tesla said it was “irritated” by the slow pace of German bureaucracy, calling for exceptions to the rules for projects that help the environment.

Economy Minister Peter Altmaier agreed in April that his government “had not done enough” to reduce bureaucracy, lauding the gigafactory as a “very important project”.

Despite Germany’s reputation for efficiency, major infrastructure projects are often held up by bureaucracy criticised as excessive by the business community.

Among the most embarrassing examples are Berlin’s new airport which opened last October after an eight-year delay and Stuttgart’s new train station, which has been under construction since 2010.

Brandenburg’s economy minister, Joerg Steinbach, raised the possibility in February that the Tesla factory could be delayed beyond its July planned opening for the same reason.

SEE ALSO: Tesla advertises over 300 jobs for new Gigafactory near Berlin

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