Is Zipcar the next Netflix or is it TiVo? 3 Jun 2010 The bythehour urban car rental firm is losing money but still growing as it prepares an IPO. Like the movie renting and TV recording pioneers before it, Zipcar has shaken up its industry and built a great brand. But as their divergent fates show, that doesn t guarantee success.
Toyota, Tesla alliance helps present and future 21 May 2010 Combining the electric vehicle nous of the makers of the earnest Prius and the supercar Roadster is mainly about the future. But with both Toyota s battered U.S. reputation and Tesla s forthcoming IPO in need of a boost, the partnership also helps with today s concerns.
GM still leaves U.S. taxpayers wanting 17 May 2010 The Detroit automaker posted its first quarterly profit in years. And the U.S. Treasury is hunting for IPO advisors. Both are welcome signs of recovery. But based on these results, GM is worth around $27 billion, barely more than a third of what s needed to pay back bailout cash.
Ford shareholders may be too harsh on the family 13 May 2010 Almost half the carmaker s owners voted to scrap the system that gifts Henry Ford s heirs 40 pct of the vote. But the family s role may have helped during the crisis. While dualshare structures are generally undesirable, Ford may now deserve a pass from the governance police.
Uncle Sam should firmly nix GM empire-building 12 May 2010 Even before the carmaker has achieved sustainable profitability much less paid back the government it may be mulling a return to financial services. GM s biggest shareholder would be wise to nip such recidivist inclinations in the bud.
Did Goldman, JPM drop the ball on rental car deal? 4 May 2010 The two leading Wall Street firms are advising Dollar Thrifty on its $1.3 bln sale to Hertz, which based on all public information looks like a stitchup. A rival willing to pay more says it was never given a chance. The deal looks fishy. Its bankers have some explaining to do.
Ford’s profit backfire reignites dilution fears 27 Apr 2010 Good news, like Q1 s $2.1 bln of earnings, sends the carmaker s shares down these days. A small cash use surprise and gentle caution on headwinds didn t help. But shareholders are still nervous about a coming flood of new stock to reduce debt. Ford should get it done already.
Hertz puts the thrifty in Dollar Thrifty purchase 26 Apr 2010 The $1.3 bln acquisition of its smaller U.S. car rental rival comes with just a 6 pct premium. Moreover, Hertz is using $200 mln of Dollar Thrifty s own cash to finance the deal, which nearly pays for itself with cost savings. Small wonder Hertz holders like what they see.
Volvo’s earnings surprise looks like a one-off 23 Apr 2010 The Swedish truck maker blew through expectations with its firstquarter results. Improved earnings should put paid to worries about a cash call. But although demand in the battered truck market is improving, it's from a low base. And cost cutting will only get harder.
GM’s CEO is getting ahead of himself 22 Apr 2010 Ed Whitacre reckons the firm will be able to pay back U.S. taxpayers all their bailout money and maybe even turn a profit for them. That d be fantastic, but would require the automaker consistently earning $5 bln or more a year. Things at GM are improving, but not that much.
Fiat spinoff plan keeps bondholders in limbo 22 Apr 2010 The Italian auto group's plan to split trucks and tractors from hatchbacks and sports cars could unlock shareholder value. But Fiat is keeping its arcane share structure, and is dodging how to split its debt. Without further precision, it may be hard for debtholders to swallow.
Fiat demerger scheme sounds sensible 20 Apr 2010 The Italian industrial group plans to split itself into a pureplay car group and a capital goods maker. There are two benefits. It would be easier for the car group to cut deals with other auto makers; and the conglomerate discount now weighing on the share would shrink.
Tarnish on ex-car czar could rub off on Obama 15 Apr 2010 The big financier the Wall Streetbashing president brought in to rescue Detroit is in hot water. Exbuyout boss Steve Rattner is still exposed to a kickbacks scandal his firm just settled. It's an awkward scenario given how much the $60 bln auto bailout may cost taxpayers.
General Motors’ new start not as fresh as it looks 7 Apr 2010 The Detroit automaker might manage to turn a profit this year. But costs still look high and, though its burdens are much reduced, GM still has $37 bln of pension and other worker liabilities. These are wrenches in the gears that bankruptcy was supposed to remove more cleanly.
Renault, Daimler try to pair style and profit 7 Apr 2010 The French and German car groups' new partnership makes industrial sense. Renault has small car expertise and a tie with Japan's Nissan. Daimler offers engineering excellence and brand cachet. But it's hard to see why they felt obliged to seal the deal with crossshareholdings.
Good news wakes investors up to Ford risk 30 Mar 2010 Selling Volvo, paying back some debt and the UAW s warrants auction all underscore the automaker s recovery. But a 5 pct drop in the stock also suggests investors are rightly wary about Ford s valuation and the prospect of another dilutive equity fundraising.
Volvo victory comes with strings for Geely 29 Mar 2010 At $1.8 billion, the Chinese car maker looks to have struck a good price for Ford's Swedish brand. Volvo's technology is the real prize. The catch is Geely will be stuck with Volvo's expensive European workers, and the deal won't do much to fill its own partlyempty factories.
Daimler U.S. settlement won’t end lure of bribery 24 Mar 2010 The German carmaker is to pay $185 mln to halt longstanding U.S. bribery probes. Siemens, BAE Systems and AlcatelLucent have struck similar deals to buy mercy. But the penalties aren t terribly painful. Executives will have to go to jail to act as a real deterrent.
VW’s expected 4 bln euro capital hike is a shock 23 Mar 2010 Partial details of the German auto group's cash call have sent its stock tumbling even though the fundraising was trailed back in August. Investors were expecting something smaller. While VW's investor communication has been poor, investors also misread the tea leaves.
Could Henry Kravis ride off on a Harley? 18 Mar 2010 The iconic motorcycle maker s shares revved up on talk of a leveraged buyout, with KKR one name mentioned. The cyclical business model and a price tag of at least $8 billion would be no easy ride. But Harley could take on plenty of debt, meaning the idea isn t totally hogwild.