COMPANY NEWS IN BRIEF

14 September 2021 | Business

Toyota, Honda oppose US tax plan

Toyota Motor Corp and Honda Motor Co on Saturday sharply criticized a proposal by Democrats in the U.S. House of Representatives to give union-made electric vehicles in the United States an additional US$4 500 tax incentive.

Toyota said in a statement that the plan unveiled late Friday discriminates "against American autoworkers based on their choice not to unionize."

The bill, set to be voted on Tuesday by the Democratic-led House Ways and Means Committee as part of a proposed US$3.5 trillion spending bill, would benefit Detroit's Big Three automakers, which have union-represented auto plants.

In a statement, Honda called the bill "unfair" and said it "discriminates among EVs made by hard-working American auto workers based simply on whether they belong to a union. The Honda production associates in Alabama, Indiana and Ohio who will build our EVs deserve fair and equal treatment by Congress."

The proposal, estimated to cost US$33 billion to US$34 billion over 10 years, would boost to up to US$12 500 the maximum tax credit for electric vehicles, up from the current US$7 500. The US$12 500 figure includes a US$500 credit for using US-produced batteries. -Nampa/Reuters

GM digs in with LG Corp

General Motors Co is taking a more direct role with South Korea's LG Corp, its long-time electric vehicle partner, in tracking down and fixing problems linked to battery fires in Chevrolet Bolts that threaten the strategic plans of both companies.

At an investor conference on Friday, GM Chief Financial Officer Paul Jacobson said LG is working with GM engineers to "clean up the manufacturing process" at LG battery plants and implement some "GM quality metrics."

Battery plants in South Korea and Michigan operated by LG Energy Solution (LGES) have been identified by GM as the source of defects behind a rash of battery-related fires in the Bolt that have triggered three recalls and $1.8 billion in warranty set-asides by GM since last November - recalls for which GM still has not implemented a hardware fix.

LGES and sister company LG Electronics on Friday reiterated their "close relationship" with GM and said the three companies are "actively cooperating to come up with a final recall plan" to "wisely resolve" battery issues in more than 140 000 Bolts the entire production run since late 2016.

GM has said early Bolt models will have their entire battery pack replaced, while newer models will have only defective modules within the pack replaced. Those new parts may not be available until after November. -Nampa/Reuters

China plans to break up Ant's Alipay

Beijing wants to break up Alipay, the hugely popular payments app owned by Jack Ma's Ant Group, and create a separate app for the company's highly profitable loans business, the Financial Times reported on Sunday.

The plan will also see Ant turn over the user data that underpins its lending decisions to a new credit scoring joint-venture, which will be partly state-owned, the newspaper reported, citing two people familiar with the process.

State-backed firms are set to take a sizeable stake in Ant's credit-scoring joint venture for the first time, three people told Reuters last week.

The partners plan to establish a personal credit-scoring firm wherein Ant and Zhejiang Tourism Investment Group Co Ltd will each own 35% of the venture, while other state-backed partners, Hangzhou Finance and Investment Group and Zhejiang Electronic Port, will each hold slightly more than 5%, said one of the people.

According to the FT report, Ant will not be China's only online lender affected by the new rules. The company did not immediately respond to a Reuters' request for a comment. - Nampa/Reuters

Carlyle considers US$6 billion sale

Carlyle Group Inc is considering either a US$6 billion sale or initial public offering (IPO) for packaging company Novolex Holdings, which it bought more than four years ago, Bloomberg said on Sunday, citing people familiar with the matter.

The private equity firm has been interviewing banks for a strategic review of the Hartsville, South Carolina-based company in the first half of 2022, the report added.

Novolex could be valued at about US$6 billion should Carlyle choose to sell the company or opt for an initial public offering, although no final decision has been made and the firm could elect to keep the business, Bloomberg reported.

Novolex operates dozens of plants globally with brands including Hilex Poly, Duro Bag and Burrows Packaging, according to the company's website. Carlyle and Novolex did not immediately respond to a request for comment. -Nampa/Reuters

Kansas to accept Pacific's bid

Kansas City Southern said on Sunday it planned to accept Canadian Pacific Railway Ltd's US$27.2 billion cash-and-stock acquisition offer as superior to its US$29.6 billion deal to sell itself to Canadian National Railway Ltd.

Canadian National now has until the end of Friday to submit a better offer or lose its deal with Kansas City Southern. At stake is the creation of the first direct railway linking Canada, the United States and Mexico.

Kansas City Southern's change of heart came after the US Surface Transportation Board (STB) rejected a temporary "voting trust" structure last month that would have allowed Kansas City Southern shareholders to receive the US$325-per-share cash-and-stock consideration under the deal with Canadian National without having to wait for full regulatory approval.

Canadian Pacific has had its proposed voting trust cleared by the STB. The regulatory certainty this provided convinced Kansas City Southern's board to switch to a deal with Canadian Pacific, even though its offer was lower than Canadian National's, according to people familiar with the deliberations. - Nampa/Reuters

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