"It could be only a matter of time before hedge funds took majority control of one of the US car manufacturers that had inflicted damage on themselves with ruinous discounts and hugely subsided leasing rates," The Guardian quoted Porsche chief executive Wendelin Wiedeking as saying.
The German chief executive thinks that part of the cause of the lack of funds is the lavish spending of the companies on private jets and burning large sums of money (up to $2bn a month).
If the U.S. Government refuses to aid their auto industry, the famous brands will go belly up by the end of January. Because the banks refuse to lend money, the small-time car suppliers will soon file for bankrupt despite their correct ruing and tax paying strategy.
German manufacturer Porsche is the world's most profitable car manufacturer with pre-tax earnings of €8.6bn in its last fiscal year. It is indicated that sales in the first four months are likely to go down 18%.
With the banks refusing to lend any funds it now seems like the clash of the titans is still underway. “ We need banks to give credit, not just talk about credit ratings, but start real actual lending to companies, “ Wiedeking said.
Earlier in the month, Porsche announced that they intend to take full control of German car-maker Volkswagen by increasing their stake from 42.6 to 75 percent. It would now seem that the eager buyer will have to set aside the plan of turning the brand into the world's leading car manufacturer due to the rapid economy downfall.
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