AIG pay standoff entirely predictable 11 Nov 2009 It s what happens if a government props up a private company, makes a show of keeping it running like one, and then interferes. CEO Benmosche s threat to quit may be a bluff. But the lesson is that if there s no clear turnaround plan firms should be wound down, not bailed out.
Marchionne’s Chrysler blueprint needs a road test 5 Nov 2009 The Fiat boss s plan to take the Motown carmaker out of the wrecker s yard sounds promising. His success in Turin gives him some credibility. But like his statement that the unprofitable firm has boosted its cash by $1.7bn, Marchionne s vision must do more than stand up on paper.
GM can get to work on Opel restructuring 4 Nov 2009 The US carmaker has scrapped the sale of its European division to Canada s Magna after Brussels questioned German state support for the deal. Angela Merkel will be irked. But GM can now aggressively restructure the struggling subsidiary with less political meddling.
Ford adds capital icing to earnings cake 2 Nov 2009 The Motown carmaker followed up its $1bn earnings surprise with a deft bit of balance sheet restructuring. Ford hopes to raise up to $3bn of new capital while also paying back almost as much debt. That should add confidence the firm is properly planning for longterm success.
US pay tsar plays with fire 22 Oct 2009 Ken Feinberg will soon unveil his plan to limit pay at Tarpdependent firms. With the best intentions, there could be damaging unintended consequences, like skewed incentives and mass defections potentially creating a mess. Let's hope Feinberg has asked the right questions.
National Express shouldn’t count on Stagecoach 19 Oct 2009 The struggling bus and coach operator has received an allshare merger proposal from rival Stagecoach, after a takeover bid fell through in the eleventh hour. The news may have stopped a rout in the National Express share price. But it doesn t address the company s real problems.
Detroit’s post-bankruptcy enthusiasm misplaced 9 Oct 2009 As GM approaches 100 days since emerging from Chapter 11, chief Fritz Henderson is talking about an IPO. Fiat s Sergio Marchionne reckons Chrysler will be profitable in two years. Ford s Alan Mulally is talking up car sales. Antony Currie argues they re all a tad premature.
Goldman jump-starts Geely Auto’s credibility 21 Sep 2009 The US bank is buying a $250m convertible bond issued by the Chinese carmaker. That won't be enough for Geely to realise its dream of buying rival Volvo. But Goldman s celebrity endorsement will give Geely a boost in talks with governments and other vendors of auto assets.
Lame-duck EU Commission hampers European business 15 Sep 2009 José Manuel Barroso is set for a second term as European Commission president in spite of his mixed record. He will need to get to work fast. With serious decisions needed on Opel, bank bailouts and financial reform, Europe can t afford to have its executive body in limbo.
Opel gets an owner, with politics attached 10 Sep 2009 General Motors has finally decided to stick to the original plan and sell a majority of its unprofitable European division to Canadian carparts maker Magna. But with the German, Russian and US government all involved in some way, the new Opel will have trouble breathing.
GM’s latest Opel dance plays with German nerves 25 Aug 2009 General Motors is hinting it may keep its European division after all, if it can t get better terms from prospective buyer Magna. But after months of tough negotiations, the US stateowned car maker should realise it can t afford to antagonize Germany s government and unions.
Porsche probe offers market schadenfreude 21 Aug 2009 The carmaker s binge on options in VW raised eyebrows across trading floors. Now it s fighting allegations of market abuse. Porsche may only have exploited Germany s poor securities laws in its attempt to control its rival. But many investors will feel that an enquiry is overdue.
VW-Porsche finish line is far from sight 14 Aug 2009 The carmakers have a roadmap to a merger. Step one sees VW pay generously for 42% of Porsche s auto unit and 100% of the Porsche family s dealership business. Step two sees VW and Porsche sell shares to cut leverage. But there is still a chance a full merger won't happen.
Porsche families will struggle to keep majority of future VW group 5 Aug 2009 The Porsche and Piëch families, who control the German sports car maker, want to maintain a 50% lock on an ultimate merged VWPorsche. But even with nifty financial engineering, they ll be hardpressed to get up to 40%, say Pierre Briançon and Hugo Dixon.
Cash for clunkers shows how stimulus should work 31 Jul 2009 The US programme to boost car sales may have burned through its $1bn budget after a week. That s a welcome change compared to the slowcooked pork that characterises most government pumppriming plans.
GE Capital may need bigger loan-loss buffer 30 Jul 2009 The conglomerate says its $650bn finance arm has adequate provisions against defaults. But a look into one slice of its portfolio, leveraged loans, raises questions about whether it will need to squirrel away more cash.
GE Capital doesn’t deserve special treatment 28 Jul 2009 The conglomerate s finance arm says it s critical to the US economy, better than a bank, has adequate loanloss reserves and doesn t need more capital. Yet it s fighting plans to further regulate its $650bn balance sheet because it's too big to fail. Something doesn t compute.
Delphi denouement puts creditors back in charge 28 Jul 2009 The US government s handson role in the car sector shortchanged creditors of bankrupt Chrysler and GM. In the Delphi case creditors had more clout, and they seem to have prevailed. It looks like the fair outcome. Now the challenge is to make the parts maker profitable.
Why would anyone sit on a state-controlled board? 24 Jul 2009 The US and UK governments are trying to identify expert, untarnished directors for banks, carmakers and other companies in which they own big stakes Citi, GM and RBS, to name a few. It s not so easy to find people who tick the boxes and are willing to do the job.
Ford still needs to accelerate restructuring 23 Jul 2009 The Motown carmaker has already made progress, which shows in its Q2 earnings. And it has been winning market share. But Chrysler and GM are back in contention and streamlined by bankruptcy. To compete longer term, Ford needs to slash its debt and the sooner, the better.