A BBC News article reports that Volkswagon (VOW:XETRA) is backing away from merger talks with Porsche (PAH3:XETRA).

I first told you about this merger, which would consolidate company operations, back on May 8, here on the Emerging Markets Blog.

The BBC reports that VW is suspending talks with Porsche saying that, “constructive negotiations were not possible at the moment.” Porsche has a significant amount of debt, and VW wants the luxury car company to reduce that debt.

Ironically, Porsche took on about $12.2 billion in debt so that it could increase its stake in VW…

The history between these two companies is long and complicated, and while VW says its backing away from the table, the two own stakes in each other and were founded by the same family. Porsche says the talks are still ongoing.

Tags: German Car Companies, Merger, Porsche, Volkswagon

News broke today that the American-Iranian journalist jailed for spying has been released from prison, her sentence adjusted to a two years suspended term.

Roxana Saberi had been working as a freelance journalist for the BBC and NPR, and had moved to the country in 2003. In January, she was arrested for buying a bottle of wine, and the International Herald Tribune says the charges grew from there.

She was next charged with working without a press card (which had expired in 2006), and finally with spying for the United States. Last month, she was convicted but Iran’s president Mahmoud Ahmadinejad asked the prosecutor to take a second look at the case.

The International Herald Tribune article on the release quotes Saeed Leylaz, a political analyst in Tehran:

Maybe Iran wants to send a message to Washington with her release that we are powerful. Secondly, that we are flexible, and thirdly, that if we receive the right incentives, we will hold talks as well.

It might win Iran some chips at the table for the ongoing wrestling match over the country’s nuclear program.

Tags: Iran, Journalist Freed, Nuclear Program, Roxana Saberi

The news made my jaw drop a bit:

“Toyota Motor Corp. lost 765.8 billion yen ($7.74 billion) in its fiscal fourth quarter, leading the world’s largest auto maker by car sales to its first full-year loss in 59 years and setting the stage for even worse results in the current fiscal year.” (from the Wall Street Journal)

The first full-year loss in 59 years! That’s astounding…

It seems like the auto industry doesn’t quite know which end is up… General Motors (GM:NYSE) just posted a $6 billion loss in its first quarter, but is seeing some interest in the potential sale of its Opel division from some European buyers - including Fiat SpA (F:Milan), who has already entered a deal with Chrysler, and has said it would be interested in GM’s Latin America, Russia and China operations.

Porsche (PAH3:XETRA) and Volkwagon (VOW:XETRA) are going to merge… Russia’s OAO GAZ Group (GAZA:Russia) is selling its LDV brand (a U.K. van maker) to Malaysian-based Weststar - and also showed interest in GM’s Opel division.

And Ford (F:NYSE) wants to convert one of its SUV manufacturing plants to an electric vehicle production line.

It’s like a giant game of 52-card pick up, where the cards raining down magically turn into cash… GM gets leaner, losses debt and gains potential government investments… European car makers find synergy and savings in merged operations… And everyone goes home happy, right?

Only when people start buying cars again.

Tags: Ford, General Motors, Global Auto Manufacturing Companies

I’ve just finished my newest article for Taipan Insider, our exclusive newsletter to Taipan Publishing Group subscribers.

I was musing on a BBC News article talking about how some Europeans feel about the European Union, and its latest expansions. To be sure, there has been a lot of grumbling about propping up economically distressed Eastern European members, like Hungary and Poland.

And there has also been some upset about jobs and factories moving east to take advantage of lower wages and costs, and about immigrants to Western countries taking jobs from locals.

Quite reminiscent of what’s happening here in the States with Mexican workers, yes?

Well, this got me thinking why the European Union would want to include Eastern European countries in its membership in the first place… It had to be something other than spreading “inclusive democracy,” right?

Of course… In fact, on Thursday, the Czech Republic will hold an “Eastern Partnership” summit with six former Soviet states to discuss energy and trade ties. The Czech Republic currenty holds the presidency of the European Union, and the former Communist country may just be the right fit to entice closer ties with ex-Soviet states.

My Taipan Insider article goes into more depth about just what’s at stake here. Be sure to read it.

Tags: Czech Republic, Energy Agreements, European Union, Immigration