Government set to force RBS to sell Green Flag

Roadside breakdown recovery firm Green Flag could have to be sold by parent company Royal Bank of Scotland.

The Bank is under significant pressure from the European Union to cut back the scale of its operations as the EU and governments around the world, including the UK, look to ‘clean up the sector’ in the wake of the help the financial sector has received following the bank-led recession.

The UK Government is the major shareholder in RBS and wants to act before the EU makes a statement on state support for the sector later this year.

RBS is likely to be forced to sell Green Flag alongside a number of other brands including insurers Churchill and Direct Line. The Government is likely to use its influence to stop Green Flag being sold to other banks with major UK operations. (National newspapers: November 1).

EU wants aircraft-style black boxes in all cars

The European Union is drawing up plans for £500 aircraft-style black box recorders to be fitted into all cars to help the police identify who is responsible for crashes.

A £2.4 million three-year study by the EU has recommended the mandatory installation of the boxes in all cars. The boxes are fitted behind the dashboard or under the floor and are connected to sensors that monitor a vehicle’s movements.

The boxes would record 20 types of vehicle data, including speed, the car’s most recent movements and whether the driver braked or indicated.

The information would be used by police and insurance firms to reconstruct crashes and determine who was at fault. It could then be used in court cases.

Researchers also believe the technology will improve safety. The study, called Project Veronica, found drivers with black boxes in their cars were 10% less likely to be involved in a fatal accident, and their repair bills fell by as much as 25%.

The EU says that any decision on whether and how to adopt the technology would be left to individual member states.

However, a spokesman for the Department for Transport said: “The technology raises serious privacy and legal issues and we have no plans to introduce these devices.” (Sunday Times: November 1/Daily Telegraph: November 2).

Postal strike helps speeding motorists escape fines

Thousands of speeding motorists may be able to escape fines and penalty points on their licences thanks to the postal strike.

In what is being seen as a test case, a High Court judge has quashed the conviction of a driver because the statutory police letter failed to arrive within the 14-day legal deadline. It had been delayed by Royal Mail industrial action.

The ruling by Lord Justice Elias could lead to a flood of refusals to pay fines by thousands of drivers whose letters were caught in the backlog caused by the strike. It could also force police forces to abandon the Royal Mail to deliver these notices.

The case opens up the prospect of motorists who have received a police letter claiming that they did not do so within the 14-day limit and thereby escaping prosecution. The letters are sent by normal post. (Sunday Times: November 1).

Repair and go saves fleets £5m in dough, claims RAC

RAC claims it will save fleets more than £5 million in garage repair bills this year as patrols repair a record number of vehicles at the roadside.

The motoring organisation says it will repair an extra 26,630 fleet vehicles this year compared with 2008, thus avoiding the need for them to be taken to a garage. In addition, RAC anticipates repairing 41,500 fleet vehicles at the roadside by the end of 2009.

Without breakdown cover, the average cost for towing a broken down vehicle off the motorway is now approximately £150 and the costs can escalate further once the tow to a garage is complete. The average price of skilled labour is currently £90.61 per hour, which is pushing up the cost of common repairs. Fully comprehensive breakdown cover for businesses costs from £72.77 a year and includes roadside repairs with no labour costs.

Steve Whitmarsh, senior fleet partnership manager for RAC, said: ‘Not having breakdown cover could have significant impact on a fleet’s bottom line. In addition, financially pressured fleets opting to extend their leases should ensure they have adequate breakdown cover to avoid hefty repair bills.

‘The benefits of breakdown cover are clear, as our patrols’ expertise is keeping more company car drivers on the road. In fact, in addition to more repairs, RAC is reducing the number of repeat attendances to fleet vehicles by as many as 1,200 per month.

‘RAC is driving down the need for repeat callouts by working more closely with local garages and parts suppliers. In addition, constant innovations in the way our patrols operate mean we can save fleets time and money and get them on their way quickly again.’ (RAC: November 2).

Cost-cutting boosts Ford’s profits

Ford has announced profits of almost $1 billion (£611 million) for the July to September quarter thanks to increased market share and a successful cost-cutting programme.

Pre-tax profit for the quarter came in at $997m, compared with a loss of $161m a year earlier. Revenue was $30.9bn, down $800m on a year ago.

The US carmaker said it was making ‘tremendous progress despite the slump in the global economy’ and predicted that it would be ‘solidly profitable’ during 2011.

Ford cut costs by $1bn during the quarter, bringing the total reduction for the year-to-date to $4.6bn. This exceeds the target of $4bn that the carmaker set itself for the whole of 2009.

The company said the reductions came from lower manufacturing costs due to improved productivity and staff cuts. The carmaker also reported increased market share in the US and in Europe, and a 63% jump in sales in China.

Ford Europe boosted pre-tax operating profit to $193m from $69m, helped by structural cost reductions, and up-for-sale Volvo reported a pre-tax operating loss of $135m, compared with a loss of $458m a year ago, helped by cost reductions, favourable exchange, and higher volume and mix.

Ford boss Alan Mulally said: “Our solid product line-up is leading the way in all markets. While we still face a challenging road ahead, our ‘One Ford’ transformation plan is working and our underlying business plan continues to grow stronger.”

Unlike its rivals, General Motors and Chrysler, Ford has managed to transform itself and drive through the recession without a US government bail-out. (BBC.co.uk/Just-auto.com: November 2).

Suzuki triples profits forecast

Japanese carmaker Suzuki Motor has tripled its forecast for full-year operating profits, after reporting better-than-expected six-month figures.

Its strength in the Indian market has meant it has performed better than its rivals, which rely more on US sales.

It reported six-month net profits of 12.5 billion yen (£85 million) which was 63% down on the same period last year.

Suzuki is now predicting full year net profit of 15bn yen, up from the 5bn yen it forecast in May.

Meanwhile Toyota subsidiary Daihatsu said its net profit fell by 60% in the six months to September, to 6.8bn yen. However it also boosted its net profit forecast for the full year to 13bn yen, up from the previous 8bn yen figure. (BBC.co.uk: November 2).

Smith drops plan for small electric van

Smith Electric Vehicles, which makes a range of electric vans based on the Ford Transit, has abandoned plans to develop a smaller van based on the Transit Connect.

The move means it will not be making an electric van smaller than the Transit, which is marketed as the Smith Edison

Several UK and European fleets had already placed early stage orders for the new small van. These fleets will now by offered larger alternatives already in production.

Smith said the decision not to develop the small van was based on several reasons.

“The level of investment was too much,” said a spokesman. “The figures just didn’t stack up.”

In addition, he said support for developing larger electric vans in the US meant it was unwise to plough funds into a small van.

The news has come just days before Smith signs an agreement to supply 50 Edison electric vans – its biggest order to date – to a major UK fleet. (Fleetnews.co.uk: November 2).