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Audi CEO arrested over diesel probe; GM may float autonomous car unit IPO


Essential IR Insights Newsletter Fall - 2023

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Audi CEO arrested over diesel probe; GM may float autonomous car unit IPO


* Audi AG CEO Rupert Stadler was arrested as prosecutors probe parent Volkswagen AG over the "dieselgate" emissions-rigging scandal. Shares in Audi fell 1.5% and its parent company Volkswagen slid 3% by 12:13 p.m. in Frankfurt after the highest profile arrest in the ongoing investigation into the scandal, which began when VW admitted in 2015 to fitting millions of diesel cars with software designed to fool pollution tests. VW and Munich II Public Prosecutor's Office both confirmed Stadler's arrest.

* General Motors Co. is exploring strategic options for its self-driving car unit GM Cruise Holdings LLC that could include an IPO, a separate tracking stock or a spinoff, Bloomberg News reported, citing people familiar with the matter. The recent $2.25 billion SoftBank investment into Cruise reportedly comes with a clause that if a public offering, spinoff, sale or dissolution of Cruise does not occur within seven years of closing the investment, it may convert its stake into GM common stock.


* Renault SA CEO Carlos Ghosn said the French carmaker will not leave Iran "even if we have to downsize very strongly" because if the country's sanctions are lifted sometime in future, "the fact of having stayed will certainly give [Renault] an advantage," France 24 reported.

* A total of 87.9% of Renault's shareholders voted in favor of a new pay arrangement for CEO Ghosn, which will cut his base salary by 20% to €1 million, the Financial Times reported. The company also rolled out an employee stockholding program that will allow Renault employees from across 10 countries to buy up to 1.4 million existing shares previously off-loaded by the French government.

* Ford Motor Co. said it acquired Michigan Central Station, a former intercity passenger rail depot in Detroit, Mich., for an undisclosed amount. The automaker will host an event June 19 at the Michigan Central Station, where it will present early visual renderings proposed for the site.

* Bayerische Motoren Werke AG, or BMW Group, has set up a companywide Brexit task force, chiefly to ensure timely supplies to its factories in the U.K. as it expects impediments at the border even with zero customs tariffs in the event the country exits completely, Automotive News Europe reported, citing an Automobilwoche interview with BMW's purchasing chief Markus Duesmann. He reportedly added that the U.K. supplier market "is not as highly developed as in continental Europe," and the impending Brexit is saddling BMW with a "huge expense."


* The Chinese government issued a retaliatory tariff of 25% on 545 U.S. products, including electric vehicles and a range of hybrid vehicles, set to go into effect July 6, CNBC reported. The tariffs on $34 billion worth of U.S. goods were imposed in response to U.S. President Donald Trump's announcement to impose 25% tariffs on $50 billion of Chinese goods and threatened more in case of retaliation.

* Nissan Motor Co. Ltd. and Renault SA suspended a 2013 initiative to develop a low-cost, fuel cell-driven car in collaboration with Ford Motor Co. and Daimler AG to prioritize electric vehicle development, the Nikkei Asian Review reported. The companies, however, reportedly will continue to cooperate on fuel cell vehicle research. The move closely follows Ford and Daimler abandoning their joint fuel cell venture.


* A regional court in Braunschweig, Germany, ruled that Porsche Automobil Holding SE, which owns 52% of Volkswagen AG, also will stand as a defendant in the lawsuits brought about by investors, seeking about €9 billion in damages, alleging that Volkswagen did not notify its shareholders in time before it admitted to manipulating diesel emissions on vehicles, Reuters reported, citing a court release. Public hearings of the lawsuits, reportedly representing investors from across the world, are scheduled to begin early September.


* Swedish carmaker Volvo Cars forecasts using at least 25% of recycled plastics in every new car from 2025. The Geely Automobile Holdings Ltd. unit expects to become climate-neutral in its manufacturing operations by 2025.

* General Motors Co. entered into an agreement with German aircraft equipment maker Liebherr-Aerospace Lindenberg GmbH to develop a hydrogen fuel cell-powered auxiliary power unit for aircraft, its first major foray into aerospace since it sold its Hughes Aircraft operation two decades ago, Automotive News reported. Charlie Freese, executive director of GM global fuel cell business, said GM "has started some discussions" with aircraft manufacturers but refused to give further details about it, citing a nondisclosure agreement, Automotive News reported.

* German auto parts maker Continental AG added nine new production lines at its existing Trutnov plant in Czech Republic to cater to an increasing demand for nitrogen oxide sensors, which can detect NOx in the exhaust fumes of a vehicle. The expansion into a new hall, covering 8,000 square meters of floor space, created 200 jobs, the company said.

* Swedish auto safety systems maker Autoliv Inc. priced a five-year, €500 million bond in the Eurobond market that will be issued June 26. The company expects to use the proceeds for general corporate purposes, possibly transferring a part of it to the proposed about $1 billion cash liquidity for its electronics spinoff Veoneer.

* French auto parts maker Valeo SA issued €600 million worth of bonds due June 18, 2025, proceeds of which will be used for financing general corporate purposes. BNP Paribas, Citi, Crédit Agricole CIB, HSBC and Natixis acted as joint leader managers for the placement.


* Canadian automotive retailer AutoCanada Inc. said its board appointed a special committee of independent directors to look at strategic alternatives for the company as well as assess any potential changes to its board.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng was down 0.43% to 30,309.49. The Nikkei 225 fell 0.75% to 22,680.33.

In Europe, as of midday, the FTSE 100 was down 0.32% to 7,609.25, and the Euronext 100 was down 0.99% to 1,058.92.

On the macro front

The housing market index report is due out today.

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