Ford must navigate tricky global terrain 24 Jul 2014 The automaker aims to lift pre-tax income by up to 75 pct over the next few years. With U.S. sales now close to a historic peak, it puts a bigger onus on the overseas operations, which aren’t yet fully up to speed. That may leave Ford’s hopes resting squarely on its F-150 truck.
GM keeps driving through recall roadblocks 24 Jul 2014 The automaker is still feeling the financial pain of its faulty ignition fiasco, adding another $1.3 bln of charges in the second quarter. But car sales are holding up well, with incentives low. That’s good news for CEO Mary Barra and gives her breathing room to fix GM’s culture.
German $13.5 bln auto-parts bid may lack gas 11 Jul 2014 ZF Friedrichshafen is mulling an offer for U.S. peer TRW. It’d be the sector’s biggest tie-up since 2007. In the race to build connected, automated vehicles, the deal makes sense. But the privately owned German group may struggle to match counteroffers from larger, public rivals.
Beijing Motor IPO lifts bonnet on China carmakers 7 Jul 2014 The automaker hopes a Hong Kong listing will help it cash in on China’s yearning for luxury vehicles. But its own marques lose money. Earnings depend on joint ventures with foreign groups like Hyundai and part-owner Daimler. It’s a reminder that China’s car market has two speeds.
Volkswagen can’t afford another truck stop yet 3 Jul 2014 It wants to buy U.S. rival Paccar next year, reckons Daimler exec Wolfgang Bernhard. VW says this is “complete rubbish”. Good. It’s already pursuing a complex European truck merger. Paying $30 bln or so to add a transatlantic partner would be crazily ambitious even for VW.
General Motors recall goes beyond 8 mln more cars 30 Jun 2014 The U.S. automaker has now called back 29 mln vehicles, almost as many as it has made in America over 10 years. The latest batch includes ignition faults from 1997. That’s four years earlier than previously thought and suggests a recent high-profile autopsy needs a rework, too.
"GM salute" should snap Mary Barra to attention 5 Jun 2014 Employees passed the buck at the U.S. automaker by folding their arms and pointing at each other, according to the new report on faulty ignition switches. It’s one of many embarrassing revelations. Such chronic dysfunction will take a long time for the new boss to exorcise.
GM chief gives bank bosses a lesson on apologies 5 Jun 2014 Mary Barra got the contrition right about how faulty ignition switches led to at least 13 deaths. The Valukas report on the problems may have left her little choice, but finance CEOs are often more grudging about failure. Changing GM’s culture, though, will take more than words.
Rob Cox: ITT’s ghost hangs over Silicon Valley 20 May 2014 As Amazon, Facebook, Alibaba and Google have become the new conglomerates, it’s instructive to consider the experience of Harold Geneen, who turned ITT into the original M&A machine. The internet approach may be different, but the driver is the same: a fear of obsolescence.
Delays breach Great Wall’s premium auto ambitions 12 May 2014 Investors wiped $2.3 billion from the Chinese automaker’s market value after it indefinitely postponed the launch of its H8 model. Given modest sales estimates, that seems excessive. What’s really at stake is whether Great Wall has what it takes to be a global brand after all.
Fiat Chrysler boss pumps magic gas into tank 6 May 2014 Sergio Marchionne wants to turbo-boost sales 59 percent by 2018. That would mean doubling demand for Jeep and other U.S. brands while outgrowing the market and bigger and better-funded rivals. Saving Chrysler in the face of widespread doubt looks almost easy by comparison.
Ford schools U.S. firms on turnarounds, succession 1 May 2014 Alan Mulally’s almost eight years at the wheel offer a textbook case of how a company can drive itself out of the scrap yard. The automaker has also done an enviable job of paving the road for the next chief executive. It’s a story corporate America should learn from.
"Ford tough" takes on whole new meaning 25 Apr 2014 The U.S. automaker’s earnings dropped more than was expected in large part because of vehicle repairs. It’s the latest sign of how the industry is struggling to keep cars reliable as models get fancier and product cycles shorten. A complexity discount may be appropriate.
GM avoids recall crash but road is still rough 24 Apr 2014 The carmaker had a decent Q1 aside from a $1.3 bln hit from its ignition switch-related fiasco. CEO Mary Barra even managed to keep earnings in the black – just. GM can afford more recall costs. The challenge is they’ll come with other drags, perhaps including slower U.S. sales.
Scania holdouts risk overplaying their hand 24 Apr 2014 Some minority investors oppose Volkswagen’s $9 bln bid for the rest of the Swedish truckmaker. But saying “nej” is risky. VW has effectively tied its hands, making a sweetener unlikely. The premium is already generous. If the buyout fails, Scania’s shares could fall steeply.
Car mega-recalls put economies of scale to test 22 Apr 2014 GM, Toyota and VW recently found problems in 16 mln cars between them. Industry recalls are rising thanks to shorter development times and more sharing of parts and production across models. The financial benefits outweigh the risks – as long as carmakers pounce on errors early.
Peugeot can beat its muted profit target 14 Apr 2014 Timid goals sent the French carmaker’s shares down 7 pct. While woes in Brazil and Russia will dent earnings, the new CEO seems to be trying to under-promise and over-deliver. The group is well placed for a recovery in Europe and has a plausible new strategy.
China’s car joint ventures aren’t built to last 14 Apr 2014 A boom in mainland sales has mostly boosted foreign brands and their local joint venture partners. But the alliances look increasingly unstable. Foreign groups would like a bigger say, while Beijing wants more competitive local brands. The tension could lead to future break-ups.
GM could use a tip from BP on contrition’s risks 2 Apr 2014 The automaker hinted it might compensate victims of faulty cars, despite the legal shield of its bankruptcy. The energy giant made similar concessions after the Gulf oil spill, with disastrous financial results. The cases differ, but both are reminders of conciliation’s perils.
GM can find small comfort in Toyota’s ride 1 Apr 2014 The U.S. automaker recalled more cars and doubled the estimated cost for the first quarter ahead of boss Mary Barra’s Capitol Hill grilling. Even so, Toyota’s recent fiasco suggests the financial fallout should be manageable. GM’s culture will be harder to repair.