Wednesday, October 8, 2008

Land prices soar near Gujarat Nano site
Maulik Pathak & Ila Parikh / Ahmedabad October 09, 2008, 0:54 IST

Real estate prices in and around Chharodi in Ahmedabad district have almost doubled overnight after Tata Motors decided to relocate its prestigious Nano project from Singur in West Bengal to Gujarat even as experts feel that the gain was only 'notional' as no deals have been struck so far.

"In Chharodi, where the Tatas' mother plant will come up, farmers are demanding Rs 8-10 lakh per bigah, almost double from Rs 3-4 lakh per bigah before news of the Nano relocation,'' said Maharaja Jayshivsinh, the erstwhile prince of Sanand and one of the largest landowners in the area.

''However, these prices are unrealistic and investors are ready to offer only Rs 5-6 lakh per bigah. In nearby Sanand area, the prices today are Rs 3,000 per sq yard, up from Rs 2,500 per sq yard earlier. The realistic price rise would be about 40 per cent," he said.

In interior areas like Sachana and Virochandnagar, the price of agri land has crossed Rs 10 lakh per bigha from about Rs 3-5 lakh per bigha, said an investor who wished to remain anonymous.

Many realtors are optimistic that the Tatas entry into Ahmedabad is likely to put a break on the current recession in the realty market here.

Giving the example of Gurgaon near New Delhi, Shrenik Shah, CEO of real estate consultancy Space Management, said prices in the suburban area of the national capital had shot up as it housed mainly IT units, which offers hefty pay packages to employees.

"Tata's entry may also attract those investors again, who earlier stayed away from making new investments in the wake bearish sentiment in the realty market. This will rejuvanate stagnant real estate market in Ahmedabad," said Jaxay Shah, former president of Gujarat Institute of Housing and Estate Developers (GIHED), an Ahmedabad-based body of developers.

Still, prices in these areas have already surged by 50 per cent in two years and 100 per cent in four years, leaving little room for further appreciation.

"Considering the rise over the past four years, land prices are unlikely to witness a substantial rise," Sanjay Dutt, managing director of Cushman & Wakefield, told Business Standard. However, for investors it is a good place to put in their money for a long term view of 4-5 years, he added.

"The bullish sentiments are misplaced as the market is in correction mode and will remain so. The impact of Nano will be marginal,'' said Shah.

However, in about five to ten years of time this project could open lot of opportunities for other industries and in that case the investors would stand to gain, he added.

Friday, September 26, 2008

Hydrogen cars lack fueling stations

Automakers say zero-emissions vehicles can't advance without solid infrastructure.

Christine Tierney and Bryce G. Hoffman / The Detroit News

PORTLAND, Ore. -- After investing money, time and effort to develop ultra-clean hydrogen prototypes, automakers are frustrated that they're not seeing more fueling stations for these vehicles.

Honda Motor Co., Toyota Motor Corp., General Motors Corp. and Daimler AG have developed road-ready hydrogen models but there's hardly any infrastructure to support them, Bill Reinert, national manager for advanced technology at Toyota Motor Sales, said at a conference here organized by Toyota. "They're all tethered to areas with these pathetically few stations," he said. "We haven't learned how to establish a hydrogen infrastructure anywhere in the world."

The U.S. government and California pressed automakers hard in recent years to develop zero-emission vehicles, he said, "and then everybody walked away."

His remarks were echoed by other auto executives in the United States and in Germany, where BMW and Daimler have tested hydrogen-powered vehicles in fleets and want to start marketing them to individual customers.

"We certainly would like to see hydrogen infrastructure development move faster," GM spokesman Pete Barkey said. "We have been very public that we need energy companies and governments to accelerate their efforts."

GM has one of the most advanced fuel-cell vehicle programs and has put around 100 Chevy Equinox fuel-cell SUVs in the hands of average consumers to see how they perform.

But with hydrogen vehicles numbering only in the hundreds, it's hard to persuade energy companies to make big investments.

"It's sort of a chicken-and-egg situation, where some energy companies may be hesitant until more hydrogen vehicles are on the market," said David Iida, a spokesman for American Honda Motor.

That's why Honda moved forward with its program to lease hydrogen-powered Honda FCX Clarity cars to 200 people over three years. Honda dealers began leasing the cars in July, but only in the Los Angeles area. "They're the only region that has a bit of infrastructure in place," Iida said.

Hydrogen technology holds tremendous appeal because it has the potential to be entirely clean, from the production of the hydrogen to the tailpipe emissions.

But any transition to hydrogen will be long and costly. Energy experts estimate it could cost hundreds of billions of dollars to establish fueling networks, and automakers need to further reduce the high cost of the cars.

John Merson, senior manager at Sandia National Laboratories, said he doesn't expect hydrogen to become a major source of energy in the United States before 2030.

Customers pay $600 a month to lease an FCX Clarity, but the car's true cost is probably more than half a million dollars. Honda will only say that the new car costs less to produce than its $1 million predecessor. Automakers say they could reduce the cost per vehicle if they produced more vehicles.

The auto and energy industries are grappling with a major technological hurdle: the challenge of storing or containing hydrogen. Jan Kreider of the University of Colorado, one of the speakers at the conference, said little progress had been achieved in recent years in hydrogen storage.At Ford Motor Co., some executives say hydrogen no longer seems to be the best alternative. Derrick Kuzak, Ford's head of global product development, said recently that there appears to be no will on the part of government or the private sector to make the immense investments in infrastructure needed to transition to a hydrogen economy.

He discounted hybrids as a long-term solution, saying that putting two powertrains in every car and truck -- one electric and one gas -- will never be economical. Kuzak now thinks electric vehicles are more promising because they rely on existing infrastructure: the electricity grid. That is also Nissan Motor Co.'s view.

But Toyota, Honda and others still see hydrogen as perhaps the best long-term solution. After testing hydrogen models in fleets, which operate vehicles under controlled circumstances, they are reaching out to consumers.Daimler plans to put a hydrogen-powered Mercedes-Benz B-Class fuel-cell car on the market in 2010, even though there are only a handful of hydrogen stations in Germany.

"Everyone's waiting for the other side to move, so nothing happens," said Daimler spokeswoman Eva Wiese. "This isn't helpful."

Meanwhile automakers are reporting impressive gains in the driving range and performance of their hydrogen vehicles, as well as cost reductions.

Last fall, Toyota's fuel-cell Highlander SUVs ran more than 400 miles without refueling during a 2,300-mile trek from Fairbanks, Alaska, to Vancouver, British Columbia. They were fueled by hydrogen compressed at 10,000 psi. "There's not one 10,000 psi hydrogen station in the United States after all the work we've done," Reinert said. "Eventually, hydrogen will happen because it is a renewable resource that we have in this country that has zero carbon emissions," said Jim Hall, managing director of the consulting firm 2953 Analytics LLP in Birmingham. "Electrical vehicles charged off the grid do not solve the CO2 (carbon dioxide) problem. They just shift it somewhere else."

Hall said Honda was trying to find a way around the infrastructure dilemma by developing charging stations in people's homes. Honda's Home Energy Station technology, which uses a steam reformer system to produce hydrogen from natural gas, is now in its fourth generation. If Honda succeeds, that would change everything, Hall said.

He said he thinks the chief reason why Ford was backing away from hydrogen is because it does not have the money now.

News Staff Writer Robert Snell contributed to this report. You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com.

GM may mortgage Detroit headquarters to raise cash

General Motors Corp. says it is looking to take out a mortgage on its towering headquarters complex as it continues efforts to raise cash to operate in an era of tight credit.

The automaker's top real estate executive said Tuesday that GM will make a presentation on Thursday to the Detroit police and fire pension board to see if it might be interested in investing in the Renaissance Center. The company also will talk with the general employees' pension board.

John Blanchard, executive director of GM worldwide real estate, said in an interview that it is common for companies to borrow on large assets, and it's something GM did in 1996 when it bought the seven-tower complex on the Detroit River.

While conceding that GM is in need of cash, Blanchard said it's just coincidence that it is pursuing a mortgage now.

"We have equity that's built up in our global headquarters. We're just looking to tap into that," he said. "This is pretty normal financial management for an asset the size of a building like this."

GM moved to the complex, built by Ford Motor Co.'s real estate arm in the 1970s, from Midtown Detroit in 1996. It took out a $626 million mortgage to buy the buildings and pay for millions worth of improvements, including a huge atrium overlooking the Detroit River and the Windsor, Ontario, skyline.

The automaker paid off the initial mortgage when it expired in May, and since then has been looking to raise cash with another financing deal, Blanchard said.

Last month, GM said it was drawing down the last $3.5 billion of a $4.5 billion secured revolving credit facility to add liquidity during "uncertain times in the capital markets."

The Detroit automaker has been profitable overseas but has lost $57.5 billion in the past year and a half as high gas prices and the weakened economy have sent domestic sales into a dive. GM burned through $3.6 billion in cash during the second quarter, although it said that rate should slow for the rest of the year.

GM had $21 billion in cash and $5 billion available through credit lines at the end of June for total liquidity of $26 billion. The company announced a liquidity plan in July that calls for cutting $10 billion in costs and raising another $5 billion through asset sales and borrowing over the next 15 months.

Fitch ratings analyst Mark Oline, however, has projected that GM could reach the minimum amount of cash required to run the business, $11 billion to $14 billion, within the next year.

The Detroit News reported Tuesday that GM would try to borrow about $500 million with the Renaissance Center as collateral, but Blanchard said the company has not discussed terms yet with the pension boards.

ndia's Tata Motors Moves Nano Plant to Western India

07 October 2008


India's Tata Motors has decided to move production of its low-cost car to western India.

A first look at the world's cheapest car, Tata's Nano, 10 Jan 2008
A first look at the world's cheapest car, Tata's Nano, 10 Jan 2008
Tata's chairman Ratan Tata Tuesday signed an agreement with state government officials to begin manufacturing the Nano in Gujarat state.

Last week, the automaker announced it would pull its $350-million plant out of Singhur in West Bengal state because of continued opposition to its presence there.

The factory was set to manufacture what is being called the world's cheapest car - the Nano - priced at around $2,000.
Today, Tata's chair said the company would do its best to adhere to a previously set timeline of launching the Nano by the end of this year.  

The new plant will be located in the town of Sanand, outside of Gujarat's main city, Ahmedabad. Tata officials say the factory will initially manufacture some 250,000 cars.

Tata pulled out of West Bengal after several weeks of deadly protests by the state's main opposition Trinamool Congress party. Opposition leaders have said local villagers were unfairly compensated for their land, which was used to build the Tata factory. 

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Tuesday, October 7, 2008

Hundreds of layoffs could come for GM

Monday, October 06, 2008 | 7:13 PM

Automaker plans to lay off just under 700 truck workers

(10/06/08)--The effects of the economy are being felt in the auto industry. Hundreds of job layoffs could be coming to a General Motors Corp. truck plant.

Workers at the Pontiac Truck Assembly were notified last week that the automaker planned to lay off just under 700 workers.

The facility builds two of GM's full-size pickup trucks.

A letter went out to members of UAW Local 594 late last week. The layoff not only affects people in the Metro Detroit area, but also GM workers in Mid-Michigan who travel to the plant.

The letter says the union got notification in September that GM will lay off up to 645 employees. The automaker says that number could also go up.

A GM spokesperson says the layoffs will take effect by Feb. 2. In addition, the plant will reduce its production.

Instead of producing 50 trucks a day, that number will be cut in half.

According to the letter that went out, layoffs could affect employees who started with the automaker after 1997.

So far, workers have been given the warning letter, but GM says workers who will be laid off have not been notified just yet.

GM says this move is a direct result of consumers moving away from large pickup trucks and SUVs.

The Pontiac plant is home to the GMC Sierra and Chevy Silverado.

The president of UAW Local 594 says he is working to try and keep those job in Pontiac.

Click here for more Mid-Michigan and Flint news

(Copyright ©2008 WJRT-TV/DT. All Rights Reserved.)

Monday, October 6, 2008

Ford takes second look at bringing tiny Ka to U.S.

By TOM KRISHER
ASSOCIATED PRESS

DETROIT — Rising demand for small cars has pushed Ford Motor Co. to revisit its decision not to bring the tiny European Ka model to the United States, Ford's chief executive said today.

"We're assessing that right now," CEO Alan Mulally told a Detroit radio station, adding that many people share the opinion that Ford should sell the Ka in the United States.

A new version of the Ka was unveiled last week at the Paris Motor Show. It will be launched in major European markets by late this year or early 2009.

The Ka is far smaller than the Focus, which is Dearborn-based Ford's only U.S. compact car. Focus sales are up 24% through September, even though the U.S. auto market is down nearly 13% for the year.

Mulally said on WJR-AM's "Paul W. Smith Show" that Ford decided to give the Ka another look because of high fuel prices pushing up demand for small cars and the response to introduction of the Fiesta subcompact. Ford had said previously it wouldn't bring the Ka, sold mostly in Europe, to the United States because the markets are different, with European cities having more congestion and narrower roads than U.S. cities.

Ford plans to start selling the Fiesta global subcompact and the European version of the Focus in the United States in 2010, boosting its array of small cars as the U.S. market continues to shift away from trucks and sport-utility vehicles.

U.S. small car sales overall are up 6% for the first nine months of the year, while truck sales are off 21%, according to Autodata Corp.

Ford spokesman Said Deep said the company is exploring whether or not Americans will accept a car that's even smaller than the new Fiesta, which the industry calls a "B'' segment car. B cars are the size of a Toyota Yaris or Honda Fit, which now are selling well in the United States. Fit sales are up 54% through September, while Yaris sales have risen 29%.

"Are people willing to go smaller than that?" Deep asked. "That's a big unknown, and I think that's what's got to be determined."

A diesel version of the Ka gets 42 miles per gallon of fuel in combined city-highway driving under U.S. testing standards, Deep said, not much more than a gasoline-powered Fiesta will get in the United States.

"There's not a dramatic difference in them to kind of give up the comfort package," he said.

The only vehicle the size of a Ka in the United States is Daimler AG's Smart Fortwo, a super-small car that has proved popular in the face of gasoline rising to around $4 per gallon. Smart has sold 18,156 of the models through September.

Ford is looking to sell well-equipped, high-quality small cars in an effort to make up revenue lost when high-profit truck and SUV sales tanked.

Mulally also said Ford will continue to adjust its factory capacity to match market demand. Overall, its sales are off 17% through September.

"None of us have seen a slowdown like we're going through right now," he said. (Said like a true veteran. How long have you been in the automotive industry Mulally?)

But he told Detroit station WWJ-AM that the $700-billion bailout of the financial industry is the right move to help stabilize home prices and deal with bad mortgages. The recent freeze in the credit markets has prevented some buyers from being able to get car financing as well.

Despite the deteriorating economy worldwide, Mulally said he's still confident Ford will survive the downturn.

"We knew this was going to get worse before it got better," he said. "And we went to the markets to borrow the appropriate amount of cash to fund our transformation."

Ford has burned through nearly $11 billion of its cash stockpile in the past year and reported a second-quarter loss of $8.7 billion. The loss included $8 billion worth of write-offs because tumbling truck and SUV sales decreased the value of Ford's North American truck plants and Ford Motor Credit Co.'s lease portfolio. The company has $25 billion in long-term debt.

Ford shares were down 28 cents, or 6.9%, to $3.77 in trading this morning.

Monday, October 6, 2008

GM, Ford stocks hit new lows

David Shepardson / Detroit News Washington Bureau

WASHINGTON -- Traders pounded auto stocks Monday, part of a massive stock selloff in the face of continuing worries about the global economy.

The Dow Jones Industrial Average was off more than 400 points, falling below 10,000, down 4 percent, after it had been off by nearly 600 points earlier today. Broader indexes were hit harder. The S&P 500 was off 4.5 percent in morning trading.

Ford Motor Co., which hit its lowest level since at least February 1986 on Friday, was down sharply today in early trading, falling 9.7 percent to $3.66, or $0.39 cents a share. At one point, Ford fell to $3.32 a share.

Ford's market capitalization fell to $8.2 billion, down $3.5 billion since Tuesday. Also since Tuesday, Ford's shares have lost about 30 percent of their value.

General Motors Corp. fell 6.4 percent to $8.42, losing $0.58 a share in early trading today. GM fell to its lowest close Monday since June 1954, when it closed at $8.51, according to the University of Chicago's Center for Research in Security Prices.

Toyota Motor Corp. was off $5.38 a share to $72.72, down 6.8 percent. Daimler AG is off 14 percent today, down $6 a share to $36.47.

Auto suppliers also continue to get slammed.

Visteon Corp. was off 5 percent to $1.51 today, down $0.08 a share, falling to another all-time low since it was spun off from Ford in July 2000. The Van Buren Township supplier has fallen 60 percent since Sept. 19.

Southfield-based Lear Corp. is down 43 percent since Sept. 19. Lear fell to $8.25, or $0.64 a share, in early trading today, down 7.2 percent. The automotive interior and seat manufacturer is trading at its lowest level since at least 1994.

You can reach David Shepardson at (202) 662 - 8735 or dshepardson@detnews.com.