Rattner case flaunts lawmen’s timing again 18 Nov 2010 The former car czar is being sued by New York's sheriff in a kickback scandal on the very day that GM has gone public. It evokes the SEC's pursuit of Goldman as financial reform hung in the balance. Watchdogs may not always have the strongest bite but give them credit for bark.
Renault’s Russian gamble could pay off 11 Nov 2010 The French car company is in talks to gain control of Russia's AvtoVAZ, upping its stake from 25 to 50 percent. The indebted maker of the Lada may not look that appetising. But if Renault is right about the Russian market's growth potential, there may be method to the madness.
Market rightly takes no chances with Rolls-Royce 11 Nov 2010 The UK engineer's market value has lost 1.3 bln stg since the Qantas engine accident. The shares are pricing in very bearish assumptions for order cancellations, lost service contracts and airline compensation, plus a hit to the wider business. The pessimism is deep but rational.
Investors shouldn’t get too sweet on dolled-up GM 10 Nov 2010 The automaker s Q3 profit beat Ford s and is more evidence of a successful turnaround. But a portion of the $2 bln comes from stuffing dealers with inventory, especially highermargin trucks. That flatters earnings ahead of the upcoming IPO, but can t be repeated every quarter.
Pirelli’s premium push is ambitious but plausible 8 Nov 2010 The Italian manufacturer has slimmed into a pure tyre play and hit targets ahead of schedule. Boss Marco Tronchetti Provera is now pushing into emerging markets and has set new goals for revenue and margin expansion. The targets are punchy, but Pirelli may just get there.
Rolls-Royce’s reputation is most of its value 8 Nov 2010 That's why it is vital the aerospace engineer acts quickly to calm concerns about malfunctions on Qantas A380 superjumbos. CEO John Rose, soon to leave Rolls after an impressive set of career achievements, still has a job to do.
U.S. still faces big breakeven hurdle on GM stock 4 Nov 2010 The Detroit automaker may be running more smoothly after last year s bankruptcy, earning as much as $2.1 bln last quarter. But current owners shouldn t expect to be in the black any time soon. GM s stock may have to as much as double from its IPO price to repay Uncle Sam.
GM sprinkles IPO with deftly timed debt sweeteners 28 Oct 2010 Weeks before its share sale the carmaker is using cash and stock to erase $11 bln of liabilities. That bolsters the balance sheet and frees up $500 mln in interest payments. It also allows investors to focus less on GM's financial issues and more on its core business.
Ford gives only a little fuel to GM’s IPO 26 Oct 2010 Another strong showing from the Michigan automaker offers more proof the industry is back on track. That s good news for GM s upcoming stock offer. But Ford is powering ahead on performance its rival has yet to match. Without it, GM s valuation warrants a commensurate discount.
Prospective GM investors have U.S. over a barrel 12 Oct 2010 Breaking even on the U.S. taxpayers GM investment was already a tough call. Now the automaker has halved the size of its IPO yet virtually trapped itself into a Q4 launch, leaving Treasury looking like a distressed seller. That hands the advantage to the new shareholders.
GM should bag some core shareholders pronto 5 Oct 2010 Persuading strategic partners and sovereign funds to buy a stake in the carmaker ahead of its IPO may bolster confidence ahead of its stock market return especially after it halved the deal. But regular investors will need more encouragement to follow suit.
Rolls-Royce finds clever succession solution 30 Sep 2010 After his 14 years as CEO, succession to John Rose was coming to dominate analysis of the UK aeroengine maker. Now he is finally stepping down, an outsider from food retailing has been appointed in his place. The move makes more sense than it might seem.
GM sensibly eases off the gas on IPO 23 Sep 2010 The offering may now wind up at only $10 bln. There s even a chance Uncle Sam will remain the majority shareholder. Tempering earlier ambitions might mean eating humble pie. But with GM still recovering and markets choppy, a smaller IPO stands more chance of success.
Daimler interest shows sense of Fiat demerger 22 Sep 2010 A mooted approach by the German carmaker for its Italian rival's trucks and engines makes sense. Fiat's plan to reveal value by splitting its cars and industrial business appears to have worked. Consolidation is overdue, although Daimler may face some antitrust issues here.
Is Marchionne Italy’s Thatcher? 16 Sep 2010 The Fiat CEO's threat to move the carmaker's production abroad if unions don't accept productivity gains is real. There are echoes of Thatcher's clash with British unions in the 1980s. If he triumphs, it could be the start of a new era for industrial relations in Italy.
GM needs to double earnings to repay taxpayers 18 Aug 2010 That s if the carmaker, which filed for its IPO on Wednesday, is valued at the same earnings multiple as Ford. GM has advantages, such as far less debt. But operationally it still lags its rival. Until that changes, GM doesn t merit a valuation that would make Uncle Sam whole.
GM CEO shift looks like more management on the fly 12 Aug 2010 Carlyle executive Dan Akerson is probably a better longterm solution than Ed Whitacre. But the surprising and clumsy announcement, on the eve of an IPO filing, furthers the impression that this company isn t quite ready for prime time. That could hurt returns for Uncle Sam.
GM IPO should borrow from European privatizations 4 Aug 2010 These used incentives and guarantees to persuade the public to buy firms denationalized in the 1980s and '90s. Adopting such tactics would allow the U.S. to sell a big chunk of its stake in GM to taxpayers and avoid potential charges of favoring Wall Street at their expense.
As ex-bankrupt, GM deserves cautious IPO interest 3 Aug 2010 Companies that exit bankruptcy and trade publicly can significantly outperform the market. Yet around a third fall back into Chapter 11, mainly because they still have too much debt. GM will have a clean balance sheet but Uncle Sam's involvement may be the key swing factor.
Control freak bosses finally get buyout benchmark 30 Jul 2010 Car parts maker Magna is paying its chairman, Frank Stronach, $1 bln to relinquish voting control, setting a bar for the likes of the Redstones, Fords and Murdochs. Breakingviews imagines an advisor counseling supervoting shareholders on how much their votes could be worth.