Auto workers adapt to life as Motown shareholders 28 Sep 2011 The new UAW contract with GM eschews the overly generous benefits of the past for more measured terms. Deals with Chrysler and Ford may be tougher. But Detroit’s near-death experience and the UAW’s stakes in two of the big three have taught the union the benefits of restraint.
Carmakers indulge in sales pipe dreams again 7 Jul 2011 Nissan reckons it'll almost double global sales by 2016. Ford is targeting a 50 pct bump, VW a tad less. If rivals match that growth, in five years' time makers will be producing 20 pct more cars annually than market forecasters currently expect to be sold. Disappointment awaits.
Carlyle’s RAC buy points to racier use of debt 23 Jun 2011 The U.S.based investor bagged Britain's numbertwo roadside recovery firm despite using a slimmer debt package than rival bidders. But the auction highlights how leverage for European buyouts is shifting up a gear encouraging private equity firms to pay everricher prices.
Ford’s punchy ambition not as worrying as it looks 7 Jun 2011 The carmaker reckons it can sell 50 pct more vehicles by 2015 mostly in fastgrowing Asia. Such optimism from Detroit usually falls flat. But this time profitability doesn't depend on it. The bigger problem with failure would be if it spurs Ford into a reckless buying spree.
Hedge fund financial mechanics show up Uncle Sam 26 May 2011 As Treasury struggles to break even with GM, Delphi's hedge fund owners may double their money with an IPO. The auto parts maker looks worth about $10 bln after emerging from bankruptcy in 2009. The investment objectives were different, but the results still contrast starkly.
Poetic justice as Chrysler tries to refinance 16 May 2011 Two years ago, the U.S. government bullied loan investors into accepting the steep losses involved in Chrysler's bankruptcy plan. Now, they have the upper hand as the automaker seeks fresh borrowing of $6 bln to pay back the Treasury. The creditors are pressing their advantage.
VW in driving seat for Europe truck consolidation 9 May 2011 The German carmaker's $20 bln offer for truckmaker MAN lacks a premium, but it will expand VW's strategic options even if it fails. True, antitrust issues may bar VW from merging MAN with its Scania unit. But Germany's odd takeover rules help explain the lowrisk assault.
GM struggles to fire on all cylinders 5 May 2011 The U.S. carmaker's firstquarter profit trebled. But strip out oneoffs and its U.S. margin was less than 6 pct, way below Ford's, even though factories were near full capacity. Despite a bankruptcy doover, GM hasn't proved it can lead the field or cut taxpayers' losses.
Fiat’s Marchionne gets auto deal of the century 3 May 2011 Chrysler is finally profitable, but still struggling. So the $1.3 bln Fiat will soon pay to own another 16 pct may not look like a steal. The juice lies in synergies. The present value of cutting just 3 pct of combined costs is some $17 billion, double Chrysler's implied worth.
HK’s first yuan IPO sets poor precedent 29 Apr 2011 Li KaShing s real estate trust Hui Xian dropped 11 pct on its debut. Jittery markets and currency volatility didn t help, but aggressive pricing looks a bigger factor. It is bad news for underwriters HSBC and Bank of China, whose hot new investment idea now looks like a flop.
Ford’s $2.6 bln profit puts doubters to shame 26 Apr 2011 The automaker steered to its best first quarter in 13 years despite the Japan disaster and rising oil prices. It even chopped off more debt. That should convince worrywarts that Ford's weak, and wellflagged, fourth quarter was a temporary blip in its strong recovery.
White House in a pickle over its GM exit plan 19 Apr 2011 The Obama administration must relish selling Uncle Sam's remaining stake in the automaker before election season heats up. But with GM's shares wallowing below their IPO price, waiting would be fairer to taxpayers. As it stands, either option is a gift to Republicans.
Letter to the Editor: Zipcar’s IPO 5 Apr 2011 Our colleague down the hall at Reuters.com is a fan of the car rental service but less impressed with it as an investment opportunity. He disagrees with the bullish case presented by Breakingviews, seeing the high price of gas as a major roadblock to Zipcar's bottom line.
Zipcar’s better mousetrap may give IPO a snap 4 Apr 2011 The carsharing company, popular with city dwellers and college students, is pricing its IPO far above the multiples of traditional car renters Hertz and Avis. But Zipcar's growth, and market disrupting business model, make the targeted $600 million valuation look reasonable.
Japan quake reveals flaw in global supply chain 23 Mar 2011 Delays among carmakers expose a troubling defect in global manufacturing. Japan's auto giants perfected the distribution of production across a web of suppliers. Global sourcing and realtime delivery have made industry leaner, but more vulnerable to the loss of a single link.
Ghosn draws wrong lessons from Renault’s spygate 15 Mar 2011 The French carmaker has apologised after wrongly firing three executives for trumpedup espionage charges. But CEO Carlos Ghosn isn't resigning, and has turned down his number two's offer to quit. Renault doesn't seem to understand the seriousness of the scandal.
CFO departure throws spanner in GM’s gears 10 Mar 2011 The automaker benefited from Chris Liddell's levelheaded approach, and his ambition to be the boss was well known. Losing the exMicrosoft executive barely a year after he joined and so soon after the IPO rekindles fears that GM's top management is struggling to gel.
Daimler and Rolls pioneer the friendly hostile 9 Mar 2011 The carmaker and engineer have unveiled a planned 3.2 billion euro offer for German engine maker Tognum in the middle of talks. That sounds hostile, and Tognum doesn't like the price. But the two sides agree on the logic of a deal. As contested M&A goes, it's oddly civilised.
Renault should stick to carmaking – not sleuthing 4 Mar 2011 The spectacular spying case brought by the French carmaker against three top executives in its electric car programme looks empty. CEO Carlos Ghosn's deputy is talking about resigning. The snafu shows the dangers of excessive corporate paranoia. Renault's business could suffer.
Oil supply can’t contend yet with car demand 2 Mar 2011 Middle East tensions won't have factored much into February's strong auto sales. And in America especially, improving credit and a need to replace aging cars are powerful forces. High gas prices will hit SUVs. But it may take a worse spike to dent pentup desire for smaller cars.