Britannia Radio

This is a pot-pourri posting about economic conditions in Britain.   The picture is not a pretty one , 

Firstly there is the report that “UK manufacturing failures to soar  More pain is in store for Britain's beleaguered manufacturing sector in 2009, with 2,460 companies expected to fail this year, despite signs that the economic outlook is improving”

Then the round-up of redundancies reported in the wake of Fujitsu’s shock decimation of jobs. Despite hopes that the economy is stabilising there has been no let up in large-scale corporate redundancy announcements with retailer Allied Carpets, engineering group GKN and Lloyds Banking Group - which had already shed 7,300 jobs this year - announcing a total of 2,250 job cuts this month.

Then we have the tale (see second below)  of the inexorable rise in our population due to falling death rate (despite the NHS best efforts to kill-off the elderly it seems!) and rising birth-rate (in corridors, and lifts and toilets in local hospitals) .  After this (third below) is the stark fact that all this rising population will not warrant greater investment to provide for them for the rate of such investment is the lowest since 1967 - 42 years ago.  

And finally - main story below - is the continuing unresolved saga of  General Motors Europe’ s future.   

As I said. 'Not a pretty picture' 

Christina

THE TIMES 27.8.09

GM Europe braced for risk of insolvency

Suzy Jagger and Alexandra Frean

GM Europe, the owner of Vauxhall and Opel, has sought professional insolvency advice to prepare for the possibility that it may not attract a firm buyer in time to rescue the carmaker, The Times has learnt.

Vauxhall executives believe that if a firm offer for GM Europe is not made within days, the carmaker faces three scenarios, one of them bankruptcy.

There are also doubts over whether the White House would sanction General Motors (GM) keeping its European business, because such a move could flout the spirit of a US taxpayer bailout agreement in February.

The jobs of Vauxhall’s 5,500 UK workers have been in doubt since its American parent went into Chapter 11 bankruptcy protection this year.

Time is running out for GM Europe. Although the carmaker has indicated that it has funds to last until the end of this year, its €1.5 billion (£1.3 billion) emergency loan from Germany and Magna International, the Canadian car parts manufacturer bidding for GM Europe, expires in November.

GM Europe needs to have secured its future well before that deadline so that it can comfortably maintain trading relationships with suppliers and meet operating costs. Without the reassurance of new long-term capital arrangements, suppliers are likely to withdraw credit facilities.

Magna and RHJ Holdings, a Belgian industrial group, have made rival bids for GM Europe. They are waiting for GM’s board in Detroit to pick one and proceed with a sale of GM Europe.

However, it emerged this week that the board of the US parent was divided over whether to sell the European business or to keep it. Some directors who pre-date GM’s near-collapse fear that a demerged European business could compete with GM and erode profits.

Executives in GM Europe believe that if neither offer is pursued, one of three outcomes will follow: Magna and RHJ will alter their offers, extending the negotiation period; the American parent will keep the business; or GM Europe will become insolvent.

Neither GM Europe nor Vauxhall would comment yesterday on advice taken about potential administration.

It is not known whether the White House would block a move by GM to keep GM Europe. Although GM did not specifically vow to sell GM Europe in return for a bailout in its original restructuring plan submitted to Washington on February 17, it was understood by both sides that it would do so.

GM gave a clear commitment that any bailout money would be used only for US operations. It also specified that it would seek to resolve GM Europe’s liquidity problems “through partnerships with the Germany government and other European governments”.

The German Government yesterday signalled that talks with GM over Opel could drag on. GM’s board is also not expected to meet again until early September, but resolution of Opel may be postponed again until after German elections in late September

GOOGLE NEWS 27.8.09

UK population rises to 61 million

(UKPA) 

The UK population increased by a record amount last year to top 61 million for the first time, figures revealed.

There were 408,000 more people living here in 2008, the Office for National Statistics said.

That takes the total population to 61.4 million - an increase of more than two million over 2001.

The increase was driven by a baby boom as fertility rates shot up to their highest rates in a generation

REUTERS 27.8.09

Business investment falls steeply in Q2

LONDON (Reuters) - Business investment in Britain fell 10.4 percent in the second quarter of this year compared with the first, the steepest drop since 1985, preliminary official data showed on Thursday.

Compared with a year ago, investment fell 18.4 percent, the biggest drop since records began in 1967, the Office for National Statistics said, taking total business investment to 29.894 billion pounds.