Porsche-VW truce wouldn’t end bad governance 20 Jul 2009 The feuding families which control the debtladen sports car maker seem finally to be close to the obvious deal: VW buys out Porsche s car division. But the row has highlighted both companies strange corporate arrangements. Other disputes will arise unless these are changed.
RHJ still faces uphill battle in Opel bid 15 Jul 2009 General Motors is promoting the Belgian holding company s bid for Opel. GM wants to put pressure on Magna, the Canadian group that was the division s original preferred buyer. But RHJ will find it hard to convince Germany s politicians and unions of its offer s merits.
Ford should raise more equity 6 Jul 2009 The carmaker has avoided a governmentfunded bankruptcy and is winning market share. But it remains highly leveraged whereas rival General Motors, after its quick bankruptcy sale, now has a light debt load. Selling shares would be dilutive, but would help Ford stay competitive.
Another story of regret involving Lear 2 Jul 2009 No, not Shakespeare's play the US car parts maker s bankruptcy. Shareholders will probably get nothing, after turning down a generous offer from Carl Icahn two years ago. They thought Lear's CEO had a sweet deal; but next time they should know to focus on what they are getting.
Evercore shouldn’t get greedy with GM 1 Jul 2009 The boutique is asking for a $15m success fee for its advice to the bankrupt carmaker. That s on top of some $24m GM already paid. But the bankruptcy overseer has reasonable objections. The government did most of the legwork typically left to an advisor.
Porsche’s family feud turns to farce 30 Jun 2009 The families which control the German sports car maker are supposedly working on a merger with Volkswagen. But they can t stop bickering. The basic problem is that Porsche doesn t seem to realize that E9bn of debt puts it on the begging end of the deal, even if Qatar helps out.
The best play on a US car rebound is on the radio 29 Jun 2009 Even with a June bounce, car sales are unsustainably low. Yet the purest play on a US recovery may not be a car or parts maker. It's Sirius XM Radio the entertainment company with a chequered history that nearly went bust a few months ago.
Are banks now in write-up territory? 25 Jun 2009 With most markets rallying this quarter, it s tempting to think so. And some should benefit. But a few have little toxic waste left. Others hadn t marked it all to market beforehand. And accounting rules may let them fudge valuations. That makes quantifying any gains difficult.
Magna’s Opel deal looks like all-or-nothing bet 18 Jun 2009 Becoming a competing carmaker could drive off many of the Canadian car parts supplier s clients like Daimler and Ford. That may be worth it if Magna can turn around GM s European arm. If not, the firm risks losing a good chunk of its revenue base for nothing.
GM default swaps highlight debt recovery divide 15 Jun 2009 Senior lenders, unlike unfortunate counterparts at Chrysler, are rightly being made whole. CDS on their debt will pay next to nothing. Subordinated lenders, by contrast, are set to take a drubbing. So they ll collect under CDS contracts. That reflects the risks each group took.
Obama’s latest car sector bullying hits snag 10 Jun 2009 This time it s the planned emergence of US parts maker Delphi from a 3½year bankruptcy. A deal brokered between former parent GM, the president's auto task force and a private equity group had lenders crying foul. The court rightly asked for a more open process.
Porsche will pay price for Qatar investment 9 Jun 2009 Qatari money would help the auto company shrink its E9bn debt and strengthen its hands in merger negotiations with VW. But for the deal to happen, Porsche will need to come clean about its finances and its founding families may have to let somebody else have voting shares.
Supreme Court right to delay Chrysler deal 8 Jun 2009 The railroading of secured lenders by the Obama administration in the Fiat deal raised troubling questions about the rights of creditors. To have the highest court in the land consider the merits of the argument is good for capitalism not to mention democracy.
Monier kicks off season of sour restructuring 5 Jun 2009 PAI paid E2.4bn for Lafarge s roofing business in 2007. But leverage and recession are forcing the French private equity group out. Creditors, led by distressed debt investors, will cut debt in half, put in new money and take over. This won t be the last reworked European deal.
GM demise shows growing maturity of CDS market 5 Jun 2009 A default by the Motown manufacturer used to be the scary monster in derivatives specialists nightmares. Now it has happened and the CDS market is scarcely stirring. Sure, investors had years to prepare. But experience, new processes and better information all helped.
Magna will struggle to keep promises on Opel jobs 4 Jun 2009 The Canadian carparts maker promised to keep Opel s factories open while shifting some of the German carmaker s production to Russia. Opel s Western European sites face a bleak future if Russia ends up as the company's lowcost base.
Interview: Indiana to Obama – what about the law? 4 Jun 2009 Three Indiana pension funds have filed a lawsuit challenging the proposed restructuring of bankrupt US car maker Chrysler. Indiana State Treasurer Richard Mourdock gave his perspective on the politicallycharged situation to Breakingviews.com's Lauren Silva Laughlin.
Silicon Valley geared up to profit from Detroit’s weakness 3 Jun 2009 A handful of VC firms are placing big bets on the decline of the US auto industry. Given GM s recent bankruptcy, some may pay off sooner than expected. Whether electric cars or simply better parts for existing ones, there s a number of ways VCs can profit.
Hummer drivers don’t eat tofu. Oh, wait… 3 Jun 2009 China provided General Motors with an unlikely buyer for the tanklike vehicle that taste forgot. Heavy machinery maker Tengzhong may actually be a better owner than a rival carmaker and pledges to save US jobs will be welcome. Shame Hummers are everything China needs less of.
Peugeot unlikely to rush into Fiat merger 2 Jun 2009 The controlling family of the French car maker has opened the door to an industrial alliance or even a merger. But Peugeot s insistence the company should remain independent, and the family s intention not to be diluted, seem to mean it doesn t have Fiat in mind.