Honda Swindon closing for 50 days

Honda has announced plans to cut production at its plant in Swindon, which will close for 50 days next year.

Honda said it plans to make 61,000 fewer vehicles in Japan and Europe as it struggles to cope with slowing global demand.

It will make 21,000 fewer vehicles at the Wiltshire plant, home to the popular Civic model.

The 50-day shutdown will mean the Swindon plant will close for the whole of February and March 2009.

The company said that there are "no plans for redundancies" at the Swindon plant.

"This is unexpected bad news," said Jim D'Avilia, labour union Unite's regional officer.

"The union, staff and the company need to work together to minimise any financial hardship and to find ways to protect pay and long-term job security," he added.

The car maker had already announced plans to stop production at the plant for 13 days during the two months. The extension of this period means that no vehicles will be produced in Swindon during February and March.

Dramatic cuts

Earlier this year, Honda announced that it would cut output at Swindon by 32,000 units. With Friday's announcement of further production cuts, the Swindon plant will now produce 175,000 vehicles this financial year, down 23% from an original forecast of 225,000 vehicles.

Friday's announcement also means that Honda will have reduced its overall global annual vehicle production by 150,000 vehicles.

Rival Japanese carmaker Toyota is also suffering from the economic slowdown. It announced on Friday plans to cut its domestic temporary workforce in half.

"We will not be renewing contracts for 3,000 of our temporary workers at the end of March 2009," the company said.

Mazda, another of Japan's largest car markers, announced on Thursday that it would cut 1,300 jobs and cut production for the current year by 48,000 units.

Isuzu, one of Japan's biggest truck makers, also announced on Thursday that it would cut 1,400 domestic jobs and cut production for the year by 10%.

Tough economic conditions and banks' unwillingness to lend money mean global demand for cars is slowing dramatically.

In the US, General Motors, Ford and Chrysler are seeking a cash injection from the government after a collapse in sales.

Russian oil giant circles Repsol

Spanish savings bank La Caixa may sell its 14% stake in struggling Spanish-Argentine energy firm Repsol to Russian firm Lukoil, it said.

The sale is tied to the acquisition by Lukoil of a 20% stake held in Repsol by construction group Sacyr Vallehermoso.

If Lukoil strikes deals with La Caixa and Sacyr Vallehermoso, it would become Repsol's largest shareholder.

Spain's industry minister Miguel Sebastien has said Repsol should remain "Spanish and independent".

He said the government should do "everything possible" to achieve this.

Spain's Prime Minister Jose Rodriguez Zapatero said it respected Repsol's right to bring partners in the firm, stressing that Lukoil was a private company with more than one shareholder.

US oil firm Conoco Philips holds a 20% stake in Lukoil.

Controversy

Builder Sacyr Vallehermoso, struggling with large debts and a falling property market, said in September it was ready to sell its 20% stake in Repsol.

Spanish media has speculated that Lukoil wants, at most, a stake of 29.9% in Repsol as, under Spanish law, a shareholder must launch an offer for the whole company if it passes the 30% threshold.

Repsol, which operates in 30 countries in Latin America, the Middle East, and North Africa, has been facing increasing competition lately. It saw a 5.8% drop in third-quarter profits.

EU warns against car subsidy race

EU Competition Commissioner Neelie Kroes has told France and Germany not to start a "subsidy race" with the US to save the car industry.

She said the European Union's existing mechanisms could help automakers, hard hit by falling demand.

General Motors has been seeking support from the German government for its local subsidiary, Adam Opel GmbH.

On Thursday the Congress told US carmakers to present a recovery plan if they want a $25bn (£17bn) rescue.

Poorly-handled subsidies would not solve the car industry's problems, Neelie Kroes said.

However, she added that auto makers could benefit from the European Union's funds for research and environment.

European car makers have been reportedly seeking loans of up to 40bn euro (£33.6bn) , at preferential interest rates, to support production.

GM is demanding state aid from the five German states where it manufactures its European brand, Opel, which sells under the Vauxhall badge in the UK.

New car sales in Europe fell by 14.5% in October, the sixth monthly fall in a row, according to Acea, the European carmakers' association

US shares up on 'Treasury choice'

US shares have risen sharply, following a report that US President-elect Barack Obama has chosen his treasury secretary, reassuring investors.

The Dow Jones Industrial Average added 494 points or 6.5% to end at 8,046.66. The Standard & Poor's 500 climbed 6.3%.

The NBC television network reported the president of the Federal Reserve Bank of New York, Timothy Geithner, would be nominated as treasury secretary.

Mr Obama is expected to announce his economic team on Monday.

The NBC report was welcomed by investors in what has been yet another volatile week of trading amid ongoing fears over the scale of the economic contraction.
It is a bit of good news in that it takes the uncertainty out," said Joe Saluzzi, co-manager of trading at Themis Trading.

Mr Geithner has worked closely with outgoing Treasury Secretary Henry Paulson in addressing the credit crisis and finding ways to boost the economy.

The 47-year-old played a crucial role in talks with Lehman Brothers before the investment bank went bankrupt.

He was also instrumental in the deals involving insurer AIG and JP Morgan, another bank.

The NBC report was enough to counter concerns over the finance sector and in particular the future over banking giant Citigroup, which saw its shares plummet 20% as board members met.

Rising commodity prices helped boost mining and energy firms.

Aluminium company Alcoa added 23% while Exxon climbed 10%, after the price of oil recovered from its lowest level in more than three years.