Paying the price for gas-guzzlers

INTERNATIONAL
Alan Fisher on the crisis facing the world's
car industry

No one wants to buy these any more

Friday 29 May
There have been months of worry and weeks of discussion but now it looks as if there's a buyer for the European division of troubled American car maker, General Motors.
     Canadian car parts firm Magna has an outline of a deal which will give it control of the Opel brand across Europe and the Vauxhall name in the UK. Fifty thousand jobs in around eight countries are riding on some sort of deal being done.
     The German government has been leading most of the discussions for two reasons. Firstly, almost half the jobs are based there. Secondly, there's an election due there later this year and no politician wants to go to the polls where unemployed car workers could make things very difficult.
     Fiat, the Italian car maker, was thought to be in prime position to seal a deal, but during the negotiations, GM had to withdraw a $400 million dollar sweetener it had tabled. The Italians were asked to make up the cash from their own pockets and when the negotiations got to the crucial stage, they stayed home, refusing to pay any more than they had originally offered.
     GM was a huge success story of the American car industry in the 1950s and 60s – it made the cars that everyone wanted to drive. But now they're better known for the giant, gas-guzzling Humvees which very few people want to buy. The company is desperately trying to restructure and there's a danger that it'll declare itself bankrupt on Monday in New York. That's why it's trying to shift its European division.
     Europe's trade ministers have called an emergency meeting – even though they're refusing to use the word emergency – in Brussels to discuss the whole affair. They want to know what the Germans have promised the prospective new owners, and what they'll get in return. What they're most worried about is how that will affect other plants that are not in Germany.
     The European car industry has been making too many cars for too many years. Now, to deal with over-capacity, many firms are going to have to make tough decisions.
 
Saturday 30 May
Pakistan has retaken control of the main town in the Swat Valley – Mingora. The Taliban fighters who had taken over most of the area decided to leave without much of a fight. There is the added caveat that journalists have been banned from the area, so it's hard to confirm what we're being told by the authorities in Islamabad.
     Pakistan wanted – it would be too strong to say needed – a quick victory. Despite what you may think from reading some of the British newspapers, Pakistan is not a country filled with 'extremists'. At the last election, radical Islamist parties got a very small percentage of the vote and while millions moved out of the Swat valley at the start of the fighting about a month ago, many were unhappy at living under the regime that the Pakistan Taliban promised to bring. Yet if the fighting had dragged on and the number of casualties on either side had started to get out of control, there was a danger that support would simply leak away.
     But while the immediate problem in Swat has been removed, the Pakistanis know it creates difficulties in other areas. Just two days ago, the Pakistani intelligence service, the ISI, who were viewed as sympathetic to the Taliban, had its Lahore headquarters blown to bits. There was a bomb attack in Peshawar the following day.
     The Americans were keen to stop the deals the Pakistanis were making with the Taliban, ceding control of certain parts of their territory in exchange for an end to attacks on police and army position. That policy is at an end. The fighting and violence isn't.

Sunday 31 May
A controversial plan to have all Israeli citizens take an oath of loyalty has been rejected by the country's cabinet. The proposal was put forward by one of the coalition partners – the ultra nationalist Yisrael Beitenu party – which came third in recent elections. They wanted to ensure citizenship was given only to those who swore allegiance. But 20% of Israel's population is Arab, and they were angered by the idea. Parliament can still debate the idea, but without cabinet support, it's unlikely to succeed.
     The party also wanted to make it illegal to demonstrate against the establishment of the state of Israel in 1948. It's a time the Palestinians call 'nakba', or catastrophe, when about 700,000 Palestinians fled or were forced from their homes in the war which followed Israel's declaration of independence. Every year they mark the occasion – which angers many Israelis. The party, which is led by Israel's new foreign minister, Avigdor Lieberman, wanted up to three years in prison for anyone involved in organising or celebrating such an event. In the end that too was watered down by the cabinet. The revised draft law now stops any government funds from being used for nakba events. One cabinet member thought the original bill was seen as a serious infringement on the freedom of expression. 

Monday 1 June
Despite Pakistan's military claiming it is close to ending its offensive in the Swat valley, thousands of people are still leaving their homes, looking for safety. The country's army chief has said that people could return to Mingora, the area's main town, but this morning thousands of people are grabbing what they can and heading away from the fighting. More than two million people have already fled their homes during the month-long offensive. The military say that the offensive will end in about two weeks. It's thought a million more people might try to flee before that happens.