Kerkorian should be Ford’s quiet back-seat driver 28 Apr 2008 After his brushes with Chrysler and GM, the nonagenarian billionaire has taken a 5% stake in the storied automaker. The Ford family s voting block should lead to a muted approach as long as its turnaround stays on track.
Ford’s credit edges ahead of GM’s 24 Apr 2008 The number two US car maker's surprise profit echoed the credit markets' view: For the first time in nearly two years, Ford CDS spreads have in recent days traded below GM's. Neither company is out of the woods. But Ford boss Alan Mulally is earning some credibility.
Tata adds Chelsea chic to Mumbai mass-production 27 Mar 2008 The Indian car group recently unveiled the world's cheapest car. Now it has grabbed highend British icons Land Rover and Jaguar from Ford. At first sight, it s a schizophrenic move. But Tata group companies have managed to juggle the cheap and the exclusive before.
Low price could help Tata turn Jaguar around 26 Mar 2008 The Indian conglomerate is paying about $2.3bn (E1.47bn) for the UK car brands, less than half what they cost Ford two decades ago. Ford is also funding pension costs and will continue to supply engines. But Tata still faces a challenge restoring Jaguar s roar.
Renault speeds ahead with budget cars 25 Mar 2008 After low cost airlines and supermarkets, Europe s next trend could be nofrills cars. Renault has taken the lead. But the success of its Logan now looks vulnerable to labour unrest and stiff competition.
Ford is wrong to sell Land Rover 12 Mar 2008 Tata is finalising its purchase of Ford s UK luxury brands, probably for more than $2bn. The price reflects Land Rover s surprising turnaround. Tata is taking a big risk. But Ford would have been better off selling its more troubled premium brand Volvo.
Dangerous driving for European carmakers 8 Feb 2008 Peugeot has started the reporting season with strong results, but investors will be wary. Demand is slowing. The French face strategic challenges and the Germans are endangered by a weak dollar. No wonder the European carmakers shares have done badly. They could fall further.
Toyota’s sales success is just icing on the cake 23 Jan 2008 Supplanting General Motors as the world s highestvolume carmaker would be an important milestone, but mostly symbolic. Whether by market value, profit or product mix, Toyota pulled ahead of its US rival a long time ago.
KKR gives early taste of LBO pain 16 Jan 2008 Two mild winters in a row are forcing the buyout firm to restructure ATU, its slumping German auto servicing chain. KKR will probably have to inject fresh equity. Other LBOs are sure to follow suit.
Could a recession work in Detroit’s favour? 15 Jan 2008 It just might. A worsening economy could help Ford and General Motors accelerate restructuring plans and become more competitive more quickly. But the risks are considerable. The longer any recession lasted, the more precariously positioned Detroit s carmakers would look.
EU green car law may prove counterproductive 10 Dec 2007 Everyone wants to make cars more fuelefficient. It s good for the energy bill and for global warming. But after some intense German lobbying, the EU s proposal is likely to favour makers of big cars, and hurt the more fuelefficient French and Italians.
General Motors teaches Wall Street a lesson on write-downs 7 Nov 2007 The Detroit car maker s whopping $39bn deferred tax hit dwarfs banks CDO losses, and is an admission that its beleaguered business won t be roaring back anytime soon. But at least GM s step looks more realistic and honest than the opaque and at times lagging approach Wall Street is using.
VW Law falls, but EU’s capital barriers remain 23 Oct 2007 The top EU court invalidated the special cap on voting rights in the carmaker. That clears Porsche s path to full control of the German carmaker. But an era of unfettered shareholder democracy has not arrived. Families and governments see no reason to relinquish their powers.
Piech may sacrifice MAN in monster truck merger 18 Oct 2007 The Volkswagen chairman might let Swedish truckmaker Scania buy German rival MAN. VW is the biggest shareholder in both. Abandoning MAN might offend German sensibilities. But since Piech's own car empire is shaping up, he no longer needs to care very much.
Chrysler stubbornness could pay off for Ford 10 Oct 2007 The strike at Detroit s number three could just be another bit of UAW grandstanding. But the new workers contract General Motors struck might not sit so well with Chrysler. If the Cerberusowned car maker manages to negotiate better terms, that ll be good news for Ford, too.
Devil is in the detail of General Motors’ UAW deal 26 Sep 2007 It sounds positive. Offloading healthcare liabilities at a discount would shore up GM's balance sheet and free up some $3bn of cash a year. But the size of the discount is key. And GM would lose a lot of the benefit of setting up a healthcare trust if it throws in a backstop.
General Motors and UAW both need to blink 24 Sep 2007 The strike may just be a union tactic to prove it s playing hardball. They could start by giving up their last batch of stocks and options. That said, GM s executives need to offer an olive branch. They could start by giving up their latest batch of stock options. The strike may just be a union tactic to prove it s playing hardball. But it can t expect the carmaker to be able to offer many concessions.
Deripaska’s $900m GM investment not just financial 7 Aug 2007 The Kremlinapproved oligarch has taken a 5% stake in the US car giant. His holding company already owns Russia s secondbiggest car maker. Deripaska s investments are blessed by the Kremlin. He is so close to Putin that he should be treated like Putin.
Will Nardelli’s style stall Chrysler? 6 Aug 2007 The US carmaker's new private equity owners won't be bothered by the exHome Depot boss's reputation for highhanded treatment of investors. But Cerberus should be more worried that Nardelli's penchant for GEstyle management fads like Six Sigma could slow Chrysler down.
Could a healthcare deal remove GM’s bankruptcy risk? 31 Jul 2007 Despite its recent run of success, Detroit s top car maker still looks like a longterm case for insolvency. But that could change. A healthcare deal with the UAW could eliminate the hole in GM s balance sheet. But it still wouldn t justify its current $18bn market value.