GM’s dividend hits right spot on multiple levels 15 Jan 2014 At 30 pct of expected 2013 net income, it’s a punchy return to shareholder payouts. GM’s profit is rising, it has plenty of cash to handle its challenges and the timing implies shareholder returns rank ahead of executive pay. Mary Barra is set for a good first day as CEO.
Great Wall Motor cracks but unlikely to crumble 14 Jan 2014 Shares in the Chinese carmaker fell sharply as it said it would delay launching its premium H8 model to fix quality problems. The ambitious company’s stock had been priced for great things. But the correction may have gone too far, considering China’s newfound penchant for SUVs.
Accelerating carmakers face dangerous potholes 13 Jan 2014 Once-resurgent sales growth is now slowing as the industry’s annual confab kicks off in Detroit. Competition is rampant with VW, Hyundai and others making a renewed U.S. push. The weak yen could lead to a price war. Most companies are equipped to cope, but profit may take a hit.
China still means the world to car makers 10 Jan 2014 Chinese car dealers had a bumper year in 2013: 85 percent of the rise in global sales came from the mainland. China’s growth may down-shift to 10 percent this year as large cities impose car-buying caps. But even then, it remains by far the world’s most important car market.
Stock surge stretches Fiat acceleration hopes 2 Jan 2014 Shares of the Italian carmaker leapt 15 percent after it secured an affordable way to take full ownership of Chrysler. The deal is good news and underpins an expected recovery in earnings. But investors are in danger of overpaying for the stock.
Chrysler deal gives Fiat a new year’s turbo boost 2 Jan 2014 Boss Sergio Marchionne comes out on top in the $4.3 bln pact with the union trust fund for the rest of the carmaker’s shares. It ends a messy dispute, avoids an IPO, doesn’t overtax the Italian firm’s finances and gives Marchionne more resources to get Fiat driving forward.
U.S. employers will bring more jobs back home 26 Dec 2013 The nation’s energy costs and wage growth are lower than in many other countries. Productivity’s higher, too. Not only does it make outsourcing to the likes of China less appealing. It may also herald a renaissance for American manufacturing.
Ford slows down into the middle lane 18 Dec 2013 The Detroit automaker’s profit warning sent the stock down 7 pct. The reasons make sense – expensive new U.S. product launches and economic weakness in Europe and Latin America. But the timing is odd. Ford is still looking strong, but it takes a bit of shine off CEO Alan Mulally.
Peugeot keen on showing how much it needs help 12 Dec 2013 A 1.1 bln euro write-down and the foundering alliance with GM show how badly Europe’s second largest carmaker needs saviours. But a 3.5 bln euro lifeline from China’s Dongfeng and the French state will be painful for existing shareholders, first of all the controlling family.
GM navigates smart route to CEO succession 10 Dec 2013 New boss Mary Barra has a reputation for both good design and keeping a firm handle on costs. That’s what the automaker, freshly liberated from the U.S. government, needs as it chases more profitable rivals. GM also appointed an independent chairman for good governance measure.
Investors plug Tesla back into stock supercharger 3 Dec 2013 The electric car maker’s shares revved up 15 pct after a positive Wall Street report. Fears over recent Model S fires had taken the high-flying stock down to an almost defensible 27 times 2016 profit. Now shareholders are again showing too much faith, too soon, in CEO Elon Musk.
Fair exec payoffs require flexibility 28 Nov 2013 Peugeot’s outgoing CEO is waiving a 21 mln euro pension pot; Siemens’ ousted boss is getting 17 mln euros. One is penance for doing a restructuring, the other a reward for profit warnings. Both show that fairness in executive exits is a matter of judgment, not contracts.
Peugeot picks right time to switch CEOs 25 Nov 2013 The ailing French carmaker is about to hire Renault’s former No. 2, Carlos Tavares, as its next CEO. A fresh face was needed to drive the company’s strategy forward, and to liaise with new shareholders. Tavares’ experience of the Nissan alliance will be useful.
Chrysler IPO delay edges Fiat into driver’s seat 25 Nov 2013 The union fund that owns 42 pct of the Detroit automaker needs an $18 bln total valuation to make a public listing worthwhile. Recent price talk has been considerably lower. Pushing the stock sale into next year suggests majority owner Fiat is in a better negotiating position.
Apollo-Cooper fight puts bankers in the spotlight 22 Nov 2013 Emails shown in court reveal that lenders pressured the Indian tyre maker to renegotiate the $2.3 bln takeover of its U.S. rival. Labour woes make the leveraged deal more risky. While banks want to avoid the blame for pulling the plug, they appear keen to limit their exposure.
Apollo and Cooper can still do a deal 12 Nov 2013 Despite a court battle over an agreed $35 per share takeover, the tyre makers insist they still want a deal. Adjusting Apollo’s offer to reflect the cost of resolving disputes at Cooper operations in China and the U.S. suggests a revised bid should be no less than $27 per share.
Tesla’s Elon Musk shows he’s only human 6 Nov 2013 The electric carmaker’s CEO presided over a decent Q3 but pulled the plug on rosy hopes for next quarter. It’s no disaster, but it is a necessary reminder that Musk’s no miracle worker. Even after the latest stock dip, though, shareholders still place too much faith in him.
BMW profit miss just a bump on safe road 5 Nov 2013 Shares of the German carmaker dropped 4 percent after its quarterly earnings disappointed. Investors should be more relaxed. BMW’s profit is dented by heavy investments in new cars and technologies. And the company’s future prospects still look better than its competitors’.
Chrysler needs $18 bln valuation to justify IPO 30 Oct 2013 That’s the point where the union trust fund that owns 41.5 percent of the Detroit automaker would reap more than it could ever get from Fiat. Hitting that figure is doable but would require margins to double by 2015 and investors to forgo a minority discount. It’s a big gamble.
Porsche performance disguises VW’s weak spots 30 Oct 2013 Europe’s largest carmaker is far from firing on all cylinders. Volkswagen lifted operating profit by a fifth in the third quarter with Porsche doing especially well. But its mass-market brands are slowing and there are nagging doubts about a large-scale revamp of production.