Obama trade hypocrisy good politics but bad policy 17 Sep 2012 The U.S. president is accusing China of an unfair $1 bln subsidy for its auto industry. That might resonate with voters. But the Asian giant, a vital trading partner for the U.S., has already hit back. And lauding his own $80 bln bailout of Detroit leaves Obama on shaky footing.
Ford understandably clings to its rock star CEO 13 Sep 2012 The carmaker seems reluctant to let go of Alan Mulally after he saved it from going bust. Naming him co-chairman would make for quirky governance and suggests the board doesn’t yet have full confidence in his successor. But keeping Mulally’s magic touch trumps these downsides.
Idle bankers can ill afford Dollar Thrifty deals 27 Aug 2012 A flurry of transactions from IBM and U.S. bank M&T marks a pleasant August surprise. But Hertz’s $2.3 bln acquisition of rival Dollar Thrifty has been three years in the making and six banks are sharing the spoils. That patient, balanced approach won’t work in this M&A market.
Ford’s dings shouldn’t distract investors 25 Jul 2012 The Detroit automaker made clear in its latest results that it has some kinks to hammer out in Europe and South America. But its U.S. business is cruising along nicely and the balance sheet is well-tuned. Ford isn’t the lemon the market valuation implies.
Gujarat holds key to Suzuki’s Indian labour crisis 20 Jul 2012 The Japanese carmaker’s flagship Indian venture is beset by ongoing labour unrest. Problems at its Haryana plant echo squabbles at Tata in West Bengal. But an enterprising Gujarat may come to Suzuki’s rescue as it did for Tata Motors.
Peugeot cuts will test Hollande’s centrist pledges 12 Jul 2012 The French government says it “cannot accept” the carmaker’s plans to slash 8,000 jobs. It can create road blocks for the group, making a turnaround more costly. This could be the first serious clash between François Hollande’s stated economic realism and the anti-market left.
Agnellis give thumbs down to Italy 30 May 2012 Fiat Industrial is merging with CNH, its U.S. subsidiary, and is set to become a Dutch-domiciled group listed in New York. This may herald a full takeover of Chrysler by Fiat Auto, with its listing moving across the Atlantic too. Italy may complain but it is largely to blame.
Ford shakes off last vestige of deadbeat status 23 May 2012 Moody’s has given the Detroit automaker its second high-grade rating in a month. Among other things, Ford can now reclaim the blue oval trademark it pawned in 2006. The firm isn’t in perfect shape, but it is leaving a painful period behind. Now it just needs to stay focused.
Formula One drives hard bargain with Singapore IPO 22 May 2012 Investors have pumped $1.6 bln into Bernie Ecclestone’s motor-racing circus. Now it’s seeking wider support for a pricey $9 bln-plus flotation. Juicy contracts and a famous brand help. But cracking new markets and media - not to mention succession planning - are big obstacles.
UK workers overtake Germans – in cheap cars 17 May 2012 More manufacturing is what the UK government wants. And General Motors’ decision to add car-making capacity near Liverpool is a victory, beating Germany at its own game. British workers have had to become cheaper, just like the pound. That has its downside. But it’s a way from A to B.
Spare a thought for GM boss Dan Akerson 3 May 2012 The U.S. automaker delivered another decent quarter under his leadership. But on the same day, Akerson’s former employer Carlyle went public. The IPO wasn’t great, but he still surrendered some $100 mln to work for GM. It’s a 1 pct problem, but his loss has been taxpayers’ gain.
Review: Distilling Mulally’s managerial mojo 27 Apr 2012 Ford’s bickering execs quickly learned in 2006 not to underestimate their new CEO. Behind Mulally’s affable exterior lay a bright, mercurial mind. As Bryce Hoffman’s “American Icon” shows, it wasn’t Mulally alone who saved Ford. But without him, bankruptcy was far more likely.
Detroit needs a bail-in, not a bailout 26 Apr 2012 Motown’s carmakers have roared back to life - Chrysler just posted a $473 mln Q1 profit. But there’s no such joy for Motor City itself. It’s plagued by debt, decay and despondency. Emergency cash can help. But Detroit really needs to attract new businesses. That’s a long road.
Formula One has much to lose in Bahrain race 20 Apr 2012 Holding the car race on the tiny island still reeling in its Arab uprising isn’t worth the controversy. The Grand Prix already has another foot firmly in the lucrative Gulf market. Sponsors are resilient to a point but the Bahrain race could yet test those limits.
Ducati could rip it up with VW 16 Apr 2012 The premium motorbike maker would add a little extra machismo to VW’s growing convoy of brands. A mooted $875 mln price tag is appropriately red-blooded, at nearly twice revenue. Cost savings would be limited. But perhaps VW could turbo-charge sales in newer markets.
Jaguar far from becoming China’s next top model 22 Mar 2012 The luxury carmaker owned by India’s Tata will join Mercedes and BMW in producing in China. It’s smart to get a local badge, since things are likely to get tougher for foreign auto firms. But the regulatory road is long, and low-end carmaker Chery is a curious choice of partner.
Fiat CEO’s call for EU auto fix is barmy 7 Mar 2012 Sergio Marchionne says Brussels must take a lead in eliminating the industry’s excess capacity, by spreading needed cuts in production across the continent. But that’s not the EU’s job. Its remit is to ensure sound competition – which should help the sector take care of itself.
Peugeot’s $1.3 bln cash call inspires confidence 6 Mar 2012 Underwriters sought a 32 pct discount to the theoretical ex-rights price for the carmarker’s fundraising in its alliance with GM. That seems steep, but reflects a challenged industry. Indeed, for a company raising a third of its market value, the 6 pct share price drop is muted.
U.S. natural gas looks irresistibly cheap vs oil 5 Mar 2012 With crude prices rising and gas sliding further, oil is now eight times dearer than gas based on energy content - the biggest gap since the 1950s. Global shifts dictate the price of the black stuff but, as news from Detroit shows, local market forces should work on American gas.
GM needs better ideas for Opel than Peugeot deal 28 Feb 2012 Europe suffers from overcapacity in cars. It’s not at all clear how spending $325 mln for a minority stake in its struggling French rival changes that dynamic, particularly given GM’s history. The deal only makes sense as a precursor to gut-wrenching consolidation.