SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE
TERCENTENARY CELEBRATIONS
B U S I N E S S

General Motors goes bankrupt
New York, June 1
Flags fly in front of General Motors world headquarters at the Renaissance Center on Monday in Detroit, Michigan. US carmaker General Motors filed for bankruptcy protection today, marking one of the biggest collapses in the corporate history as the iconic entity grapples with global recession and plunging sales.

 
Shares plunge 32 pc; NYSE to delist 
Flags fly in front of General Motors world headquarters at the Renaissance Center on Monday in Detroit, Michigan. In the biggest failure of an industrial company in US history car-making giant General Motors has filed for bankruptcy protection; backed by the US Government which is now expected to take a 60 per cent stake in the firm. — AFP

Fiat’s Grande Punto coming on June 17
New Delhi, June 1
Car maker Fiat India today said it will position its hatchback Grande Punto, which will be launched in both petrol and diesel variants on June 17, in the upper side of the small car segment.




EARLIER STORIES



Auto sales in top gear
New Delhi, June 1
After facing the recessionary effect a few months ago, country’s largest car manufacturer Maruti Suzuki India Ltd (MSIL) is continuing with its perky performance leading to a over 10 per cent rise in domestic sales and an overall 15.75 per cent rise in sales, including the exports.

Oil prices not to be deregulated
New Delhi, June 1
A relief for the oil consumers is coming, but not for the oil marketeers. Oil Ministry sources have said that there is no proposal to deregulate oil prices as is being made out from Oil Minister Murli Deora’s statement on Friday. The media reports stated on Friday that oil marketing companies will once again be given the freedom to fix prices in line with market prices within 4-6 weeks and matter will be taken to the Cabinet.

Exports down 33.2 pc in April
New Delhi, June 1
The global downturn has taken the wind out of the sails of India's exports, which fell the most in 14 years in April, by 33.2 per cent, over the same month last year, while domestic slowdown led to imports dropping by 36.6 per cent in the same period.

Re breaches 47 level 
Mumbai, June 1
The Indian rupee breached the 47 level for the first time in five and a half months to end at 46.96/97, stronger by 15 paise against the dollar, on sustained fund inflows into firm equity markets, apart from the political stability factor.

Wireless user base crosses 400-m mark
New Delhi, June 1
India’s wireless subscriber base crossed the staggering 400-million mark in April this year with an addition of 11.9 million new users.

3G auction by year-end: Raja
New Delhi, June 1
India will auction third-generation wireless radio (3G) spectrum by the end of this year, Telecom Minister Andimuthu Raja said on Monday.

Mittal rules out revising MTN offer
New Delhi, June 1
Bharti group chief Sunil Mittal today ruled out any revision in its proposed deal to buy 49 per cent stake in South African MTN in a stock and cash deal amid reports that he may revise the offer.





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General Motors goes bankrupt

New York, June 1
US carmaker General Motors filed for bankruptcy protection today, marking one of the biggest collapses in the corporate history as the iconic entity grapples with global recession and plunging sales.

The century-old automaker, which is surviving on American taxpayers’ money has filed for Chapter 11 protection with the US Bankruptcy Court, Southern District of New York.

General Motors' move is backed by the Obama administration which is expected to be the major stakeholders, once the restructuring is completed. While the government is anticipated to retain as much as 60 per cent in General Motors, the remaining would be held by the union and creditors, among others.

According to the court filing today, General Motors has sought bankruptcy protection under Chapter 11.

The carmaker has already received nearly $20 billion from the US government and is expected to get more funds to tide over the bankruptcy process.

Chapter 11 bankruptcy protection allows the company to continue with its operations and would be protected from the creditors.

The bankruptcy of General Motors is the fourth largest in American history. The carmaker is estimated to have assets worth $91 billion.

Two of the largest bankruptcies happened last year when the financial crisis turned acute - Lehman Brothers and Washington Mutual.

When Lehman Brothers and Washington Mutual filed for bankruptcy in September 2008, they had assets worth nearly $691 billion and $327 billion, respectively.

Telecom entity WorldCom, which went bankrupt in 2002, had assets of nearly $104 billion then. Severely hit by the economic turmoil, General Motors, more familiar as 'GM' has incurred substantial losses in recent quarters, even forcing it to slash thousands of jobs.

Founded on September 16, 1908, GM manufactures cars and trucks in 34 countries. Going by its website, the once mighty automaker employs 2,44,500 people worldwide and sells and services vehicles in some 140 countries.

In 2008, GM sold 8.35 million cars and trucks globally under many prestigious brands, including Buick, Cadillac, and Chevrolet. General Motors incurred losses to the tune of $30 billion in 2008.

A fall after surviving 9/11, World Wars

It vowed to "Keep America Rolling" after 9/11 terror attacks and also solved a puzzle about one of its Pontiac cars not liking vanilla ice cream, but it could not avoid bankruptcy, even with the help of the US government.

Besides, the iconic carmaker weathered two World Wars and the Great Depression of 1930s, but the current financial turmoil happened to be too much for GM to keep running in safer alleys and it was finally steered into the bankruptcy today as it had reached a point of no-return.

The dominating icon of American capitalism, 1908-founded General Motors reigned as the world's largest carmaker for over 75 years.

In the process, it also launched a 'Keep America Rolling' campaign after the September 11, 2001 attacks, that had left dumbfound the entire US, including its economy. But the GM campaign boosted its sales and was followed by other car makers too.

‘GM India not affected’

New Delhi: General Motors India, the Indian subsidiary of the bankrupt US car major, on Monday said its operations in the country will remain unaffected and will go ahead with its planned launch of two more cars in 2009.

"GM India operations are not included in the US filing for Chapter 11. Consequently, all GM India dealers, warranty and customer support services will remain unaffected and continue to function as normal," General Motors India said in a statement. The company said it would go ahead with the launch of its luxury sedan Chevrolet Cruze, besides introducing a "mini car" in the Indian market by the end of this year. — PTI

Shares plunge 32 pc; NYSE to delist 

Shares of General Motors plunged 32 per cent in the first half-an-hour of trading on Monday after the company filed for bankruptcy.

The New York Stock Exchange has said that stocks of the automaker would be delisted from the bourse before trading opens on June 2.

The scrip of General Motors, which has already slipped below the $1-mark, was trading at just 51 cents on Monday after reaching an intra-day low of 27 cents.

At the current share price, the carmaker has a market capitalisation of little over $344 million dollars.

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Fiat’s Grande Punto coming on June 17

New Delhi, June 1
Car maker Fiat India today said it will position its hatchback Grande Punto, which will be launched in both petrol and diesel variants on June 17, in the upper side of the small car segment.

Fiat India Automobiles Ltd (FIAL), a 50:50 joint venture between Italy-based Fiat SpA and domestic auto major Tata Motors, plans to position the car in the premium hatchback segment along with Maruti Suzuki's Ritz, Hyundai's i20, Skoda's Fabia and to be launched Honda Siel's Jazz, the company said in a statement.

The company, however, did not disclose the price of Grande Punto, which was first launched in Europe in 2005.

"Grande Punto will roll out from the company’s state-of-the-art plant at Ranjangaon (in Maharashtra) which also manufactures Fiat’s Linea and Palio," it added.

The localisation content of components of the car would be increased up to 85 per cent by the end of this year, it added.

"The company is also working to ensure that the car is supported through a robust Tata-Fiat dealer network comprising of 100 sales and service outlets by time of launch," it said.

FIAL was originally incorporated in 1997 and the definitive agreement was signed in 2007.

Currently, Fiat India Automobiles Ltd has its manufacturing facility in Ranjangaon with a production capacity of two lakh cars and three engines per annum. It produces Palio Stile and Linea from the plant. — PTI 

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Auto sales in top gear
Tribune News Service

New Delhi, June 1
After facing the recessionary effect a few months ago, country’s largest car manufacturer Maruti Suzuki India Ltd (MSIL) is continuing with its perky performance leading to a over 10 per cent rise in domestic sales and an overall 15.75 per cent rise in sales, including the exports.

In comparision, country’s second largest car manufacturer Hyundai Motor India Ltd (HMIL), reported a drop of four per cent in domestic sales in May.

There was however, good news in the two-wheeler segment with both Hero Honda and TVS motors reporting an increase in its sales through the month.

According to officials at MSIL, the company reported a 15.75 per cent jump in the total sales in May at 79,872 units as against 69,001 units in the same month last year.

In the domestic market, the sales grew by 10.35 per cent to 70,785 units from 64,143 units in May last year, while exports rose 87.05 per cent at 9,087 units from 4,858 units in the year-ago period, MSIL said here.

The company's sales crossed the 70,000-units mark for the fifth consecutive month, it added.

According to Maruti officials, exports have jumped more than 50 per cent this May, driven by improved European demand.

In comparision, HMIL, posted a drop of four per cent in domestic sales in May at 23,503 units. The India subsidiary of the Korean giant had reported sales of 24,510 units during the same month a year ago.

Exports of the company, however regained momentum after the European Union introduced incentives like the 'scrappage incentive' to induce sales.

As a result, exports grew by almost 28 per cent for the reporting month to touch 20,125 units as compared to 15,751 units exported during the same month in the previous year. In all, the company witnessed a growth of 8 per cent in May with sales at 43,628 units as against 40,261 units reported in May last year.

In two-wheeler segment TVS Motor Co Ltd reported a five per cent rise in two wheeler May sales and forecast a double-digit growth in sales for FY10.

India's third largest two-wheeler maker said total vehicle sales for the month stood at 118,574 units compared with 112,770 units last year, helped by higher domestic motorcycle and moped sales.

The country's largest two-wheeler maker, Hero Honda Motors Ltd (HHML), has reported a 22.52 per cent jump in its total sales in May at 3,82,678 units, over 3,12,317 units in the same month last year.

"The strategic building-blocks that we put in place in the past couple of years have been key to our consistent growth month after month," Hero Honda Motors senior vice-president (marketing and sales) Anil Dua said.

Suzuki Motorcycle India Pvt. Ltd., a subsidiary of one of the world’s leading two-wheeler manufacturer Suzuki Motor Corporation, registered 17 per cent sales growth in the month of May. It sold 12,734 units in May as compare to 10,845 units sold last year in the same month.

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Oil prices not to be deregulated
Bhagyashree Pande

Tribune News Service

New Delhi, June 1
A relief for the oil consumers is coming, but not for the oil marketeers. Oil Ministry sources have said that there is no proposal to deregulate oil prices as is being made out from Oil Minister Murli Deora’s statement on Friday. The media reports stated on Friday that oil marketing companies will once again be given the freedom to fix prices in line with market prices within 4-6 weeks and matter will be taken to the Cabinet.

Government sources said the minister had stated that the matter was under consideration. However, not even a note has been prepared in the matter. “The question of deregulating the prices does not arise as it will immediately lead to a rise in prices.” The government sources reason that the new UPA government does not want to be viewed harshly by the electorate by raising the prices soon after resuming office.

The time line of 4-6 weeks also does not apply because the matter has not even been drafted as yet.

Sources say that as yet the government is mulling what action is to be taken if the prices are freed to market forces. One of the thinking is to allow implementation of B K Chaturvedi recommendations, which gives oil marketeer freedom to price oil up to $75 a barrel, and above that, the government intervenes to shield the consumers and allows subsidy.

Another proposal being mulled is to increase petrol prices, by Rs 1-2 per litre, maybe after a few months, as the government work will set into action. However, the government will also keep in mind the forthcoming Maharashtra elections in October later this year, add sources.

Sources in the Indian Oil Corporation also clarified that the Oil Ministry has not had any consultations with them on how the prices are to be deregulated. IOC, the state refiner and marketeer is consulted by the government in taking any decision in the matter of prices.

The government sources further say that something has to be done to minimise the losses of oil companies that are reeling under high crude oil prices and fixed selling price. This burden of oil company losses has resulted in government issuing oil bonds, which is leading to high fiscal deficit.

By ending a policy of administered price mechanism, the government will achieve two objectives: one, lifting the burden from state refiners, who are reeling under losses due to profits, two, it will bring down the subsidy burden on the government.

Sources in the Oil Ministry say that it is an important step in reform agenda, though policy agenda still has not been clearly defined. The UPA government had re-imposed administered price mechanism in the wake of rising crude oil prices on the plea of protecting consumers.

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Exports down 33.2 pc in April

New Delhi, June 1
The global downturn has taken the wind out of the sails of India's exports, which fell the most in 14 years in April, by 33.2 per cent, over the same month last year, while domestic slowdown led to imports dropping by 36.6 per cent in the same period.

Exports dropped for the seventh month in a row, this time to $10.74 billion, in April 2009-10, from $16.08 billion a year ago. An over 58 per cent decline in oil import led to a sharp fall in overall imports, resulting in a narrow trade deficit of $5 billion in April, against $8.7 billion a year ago, according to official figures released here today.

"Our target is to make sure that at least we have flat growth in exports," Minister of State for Commerce and Industry Jyotiraditya Scindia said after taking charge.

After an impressive growth rate of over 30 per cent in the first six months of the fiscal 2008-09, exports started declining since October.

In 2008-09, exports grew by a meagre 3.4 per cent to $168.7 billion. "...this decline would continue till September and we hope that thereafter, we would be able to see a consolidation and improvement in exports," Commerce Secretary G K Pillai said.

Oil imports in April contracted by 58.5 per cent to $3.6 billion, while the non-oil inbound shipments too dropped by 24.6 per cent to $12.1 billion.

Pillai also said that exports in 2009-10 would remain in the range of $170 billion.

"(With) the rising oil product prices, the trade deficit for the current fiscal would remain at $100 billion compared to last year's $120 billion," the Commerce Secretary said.

Meanwhile, the Federation of Indian Export Organisations (FIEO) said inventories with foreign buyers are getting exhausted and exporters have started getting orders. "...inventories are getting over and orders are increasing. Demand for low-price articles is increasing but there are still constraints in the middle and high class segments," FIEO Director General Ajay Sahai said. — PTI

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Re breaches 47 level 

Mumbai, June 1
The Indian rupee breached the 47 level for the first time in five and a half months to end at 46.96/97, stronger by 15 paise against the dollar, on sustained fund inflows into firm equity markets, apart from the political stability factor.

The rupee had last closed below 47 on December 18, 2008, at 46.95/96.

Political stability brightened prospects of increased capital inflows into Indian equity as the new government hinted at faster economic reforms.

Extending its gains to the fourth day in a row, the domestic currency resumed firm at 47.00/02 a dollar against its last close of 47.11/12 a dollar and later moved in a range of 46.80 and 47.07 during the day. Dealers at the Interbank Foreign Exchange (forex) market said the continued weakness in the dollar against major world currencies helped the rupee gain further ground in the light of sustained FII purchases in the equity market.

Foreign institutional investors pumped in more than $4 billion into equity in May.

The Indian benchmark Sensex jumped by another 215 points or 1.47 per cent after rising by a whopping 1,036 points in the last three days.

Rupee sentiment was also aided by the absence of dollar demand from importers even as global oil prices surged past $67 a barrel in Asian trade today. — PTI 

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Wireless user base crosses 400-m mark
Tribune News Service

New Delhi, June 1
India’s wireless subscriber base crossed the staggering 400-million mark in April this year with an addition of 11.9 million new users.

Telecom regulatory authority, TRAI said today about 11.90 million wireless (GSM, CDMA and WLL(F)) subscribers were added in the month of April.

Although the number of subscribers dipped sharply when compared to an addition of 15.64 million during the previous month, however, the number was enough to take the total subscriber base to 403.66 million.

The total telecom (wireless and wireline) subscriber base stood at 441.47 million at the end of April 2009 as against 429.72 million in March 2009, it added.

Reports suggested that the target of 500 million subscribers by 2010 (set by Department of Telecom) could be achieved much before the target period.

Total additions (wireless and wireline) in April stood at 11.75 million as compared to 15.87 million new connections in the previous month.

As has been the case over the past year, the wireline segment again saw a decrease of 0.15 million in subscriber base to 37.81 million in April against 37.96 million wireline subscribers in March 2009.

TRAI added that the overall tele-density has reached 37.94 at the end of April as against 36.98 in March 2009.

The total broadband subscriber base has reached 6.28 million by the end of April 2009 as compared to 6.22 million by the end of March 2009.

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3G auction by year-end: Raja

New Delhi, June 1
India will auction third-generation wireless radio (3G) spectrum by the end of this year, Telecom Minister Andimuthu Raja said on Monday.

"Definitely... in 2009 itself," Raja said when asked about the time-frame for the long-awaited 3G auctions.

Raja declined to say how much the government expected to raise through the sale. India was to auction the 3G telecommunications spectrum in January, but the sale was delayed.

The Telecom Ministry had earlier expected the auction to raise 300 to 400 billion rupees ($6.4 to $8.5 billion), but the Finance Ministry in February estimated the sale could bring just half of that.

Third-generation services allow voice, data and video to be transmitted at high speeds to wireless devices, and are seen as the next growth driver for telecoms firms in India, the world's fastest growing mobile market. — Reuters

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Mittal rules out revising MTN offer

New Delhi, June 1
Bharti group chief Sunil Mittal today ruled out any revision in its proposed deal to buy 49 per cent stake in South African MTN in a stock and cash deal amid reports that he may revise the offer.

"There is no occasion for that (to revise the offer) ...there is enough headroom for FDI ... at the moment we will remain in talks with them (MTN)," Mittal told reporters after pre-Budget consultation with Finance Minister Pranab Mukherjee.

Mittal was replying to queries if he was going to revise the offer to MTN for the stock and cash deal.

Indian telecom giant Bharti on last Monday announced that it has opened talks for acquiring 49 per cent stake with South African MTN in an estimated $23-billion deal.

The two companies signed an agreement to hold exclusive talks for a deal that could include $10 billion in cash and $13 billion in shares and see emergence of a combined entity of $20 billion in terms of revenue and 200 billion subscribers globally. — PTI 

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BRIEFLY

PepsiCo India to invest Rs 1,000 cr
Gurgaon:
Pepsico India on Monday announced a Rs 1,000-crore investment blueprint for this calendar year that will see the food and beverage major expanding manufacturing capacity and supply chain, among others, in the country. Nearly Rs 765 crore of the proposed Rs 1,000 crore investment, the highest by the company for any calendar year since it set up shop here in 1989, would come from internal accruals and the remaining from its bottling partners. — PTI

Dena Bank revises interest rates
Mumbai:
State-run Dena Bank on Monday revised interest rates on foreign currency non-resident (bank) account deposits and non-resident external term deposits with immediate effect. FCNR(B) deposits in US Dollar having a maturity of 1-2 years will now carry a rate of 2.6 per cent as against 2.89 per cent earlier, a press release said here. — PTI

'Mobizone' outlet
Chandigarh:
Noida-based Pacetel Communications on Monday opened its first multi-brand mobile phone outlet 'Mobizone' here and announced that it would open 30 more such stores within this fiscal across the country. Taking to mediapersons here, Jyoti Raman, CFO of the company, said they were aiming at having a stronghold in mobile phone repairs market, which is predominantly held by unorganised sector. He said Mobizone has already tied up with leading mobile handset companies such as Idea, LG, Fly and Reliance for providing within warranty repairs service to their handsets. — TNS

SBI interviews rescheduled
Chandigarh:
The interviews for clerical posts in the State Bank of India and its associate banks have been rescheduled for June 5 and 6. These interviews had to be cancelled earlier following disturbances in and around Punjab. An official press release said the interviews at Jalandhar will now be held on June 5 and 6, and at Ludhiana on June 6.— TNS

Max New York Life
Chandigarh:
Max New York Life Insurance on Monday launched ‘Lifeline Healthy Family’, a comprehensive long-term insurance plan for hospitalisation, surgeries and critical illness for the entire family under one single policy. With the launch of ‘Health Family’ Max New York Life also became the first and the only company to offer benefits for congenital disorder. — TNS

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