Merkel may not be able to stay tough on Opel 24 Mar 2009 The German chancellor has so far resisted calls for pouring money into Opel, GM s German subsidiary. She says she s ready to extend loan guarantees to a possible private investor. But if she can t find one, there won t be many options left.
Daimler scores good deal with Abu Dhabi 23 Mar 2009 The German carmaker gets E1.9bn at a tiny discount and avoids having to turn to the German government. The emirate is betting on longterm strategic benefits. After losing on a string of financial bets, Abu Dhabi, like China, now appears to be focused on finding strategic value.
Supplier aid could speed Motown restructuring 19 Mar 2009 The US has been talking down the threat of forcing Chrysler or GM into bankruptcy. And now it s offering guarantees to car parts makers. But these could strengthen carmakers hands in negotiations with unions and bondholders and reduce the systemic risk of a Chapter 11 filing.
Ford raises restructuring bar for rivals 5 Mar 2009 The Motown carmaker has launched a $10.4bn debt exchange offer soon after striking a tentative deal with unions. The deal is tough on lenders, but makes Ford s governmentdependent peers look like they re dragging their heels. Ford s not out of the woods. But it s getting closer.
Investors should demand ultimate Ford family sacrifice 5 Mar 2009 The carmaker needs investors to accept losses and dilution and may come back for more. But dualclass shares grant the Fords 40% voting control. As quid pro quo, shareholders should demand they be scrapped. By agreeing, the Fords could show that all stakeholders are mucking in.
Europe should stand up to GM’s blackmail 4 Mar 2009 The US car maker has asked for more than E3bn from Germany and other EU countries to keep its European operations running. Governments should but won't let factories close. If they pay up, they should at least take over the business. And get started on restructuring.
AutoZone is only a faint bright spot for Lampert 3 Mar 2009 The carparts chain is now the US hedge fund manager's largest stock holding and its business is going well. Unfortunately, it's only Lampert's biggest holding because shares in retailer Sears have plunged in value. Even more unfortunately, he's still running Sears himself.
GM’s ghastly results shorten road towards bankruptcy 26 Feb 2009 Losing $30.9bn in a year is astonishing. True, the US car maker has done worse it lost nearly $40bn in 2007. But that figure reflected tax losses. This year s losses truly capture GM s sick state. A Chapter 11 filing is the correct medicine.
GM, Citi, RBS add to rising tide of economic nationalism 20 Feb 2009 All three need to prove their government aid is being put to work at home. That left GM s Saab unit, Citi s Danish consumer lending business and RBS s Asia ops out in the cold. The moves may be driven more by necessity than preference, but the implications are just as worrisome.
General Motors employs mother of all scare tactics 18 Feb 2009 The ailing carmaker reckons bankruptcy would require a stonking $100bn or more making the extra $16bn of taxpayers money it wants look like chicken feed. GM s logic is untested. But if it jolts all stakeholders to take the necessary haircuts, it may yet serve a purpose.
Short on cash? Feed your workers with inventory 2 Feb 2009 Sounds harsh, but it's essentially what Chrysler is doing by offering $25,000 car vouchers as part of severance packages. It's a novel way to offload excess inventory akin to Credit Suisse s bonuses backed by wobbly assets. Not everyone can pull it off, though.
Germany’s car plan leaves UK well behind 28 Jan 2009 The UK s loan guarantee plan for the car industry looks poor compared to Germany s buyer incentive scheme. Germany has encouraged cautious consumers to spend, bolstering an industry that is much bigger than the UK s and achieving immediate environmental benefits.
Jaguar and Land Rover don’t merit state loans 23 Jan 2009 Tata, the owner of the auto brands, says they don t need a bailout , just loans from the UK government. But Tata should be the first port of call for cash. The UK s responsibility is to ensure that JLR gets funding from the nation s banks, rather than directly from taxpayers.
Fiat’s outlook highlights need for speed in consolidation 22 Jan 2009 The Italian automaker taking a stake in Chrysler slashed its profit outlook by a third while debt ballooned. The only way forward is to reduce capacity in the industry, perhaps by merging with PSA. Fiat boss Marchionne is best placed to make this happen.
Fiat’s clever deal revives Chrysler’s corpse 20 Jan 2009 The Italian carmaker is to take a stake in its ailing US peer, paying in technological knowhow rather than cash. This should help Fiat sell compact cars in the US and adds crucial production volumes. It also keeps the blood flowing through at least some of Chrysler s appendages.
Renault should skip dividend if it receives state aid 15 Jan 2009 The French government wants the carmaker to skip its planned E1.3bn dividend in exchange for its share of a statefunded industry bailout. That is quite right. Renault shareholders must understand that the company badly needs cash and should conserve all it has.
VW’s strength shouldn’t bar it from state support 12 Jan 2009 The German car manufacturer achieved higher sales last year in spite of the global slowdown. Bets on emerging markets and a multibrand strategy paid off. VW may be doing well on its own, but it would distort competition to bar it from state aid packages being offered to rivals.
Sarkozy wrong on state aid for car industry 7 Jan 2009 The French president wants car makers to pledge they will stop exporting jobs to lowerwage countries before they can benefit from state aid. This is the wrong approach. Boosting profitability and productivity creates jobs. In the long run, jobprotection schemes backfire.
GM unlikely to meet positive NPV hurdle 5 Jan 2009 In return for its federal loans, the carmaker must present a plan to achieve a positive net present value. Even with cost cuts, debt restructuring and union concessions not to mention rosy assumptions about sales the arithmetic doesn t add up.
US automaker bailout skids down slippery slope 30 Dec 2008 To rescue GM, the Treasury has now ponied up $6bn for GMAC. But for the finance company to really crank up its lending, the Fed may have to take a liberal view of its capital levels. There are other signs the Treasury and Fed aren t in accord, further damaging their credibility.