Volkswagen shouldn’t sell shares to Porsche 30 Sep 2005 It s one thing if Porsche buys a big stake in the market. There s nothing VW can do about that. But it should not help Porsche to do so. That would damage its own investors.
Porsche investors in muddle about VW stake 29 Sep 2005 Porsche s shares have yoyoed wildly since news of the deal broke. But it s not clear why. Taking a minority stake in VW is clearly a poor use of the luxury carmaker s capital.
Porsche to take 20% of Volkswagen 25 Sep 2005 The move, bearing the fingerprints of VW s supervisory chairman, is terrible for German capitalism. It s patently designed to coddle VW. The best defence for VW from unwanted suitors would have been a coherent, wellexecuted strategy, something Piech never allowed to form.
Agnellis buy E600m of Fiat stock to retain control 16 Sep 2005 The founding family acted to prevent it losing control of the Italian carmaker following Fiat s forthcoming E3bn debttoequity swap. But it is hard to square with recent claims by Ifil, the family holding company, that it wasn t planning to buy Fiat stock.
Will mega-buyouts lead to indigestion? 16 Sep 2005 As deals get bigger witness Hertz, Sungard Albertsons the options for exiting them diminish. IPOs are the only obvious way out. Still, given the private equity industry's compensation structure, the dealmakers will make their money regardless.
Daimler shares soar after Schrempp quits 28 Jul 2005 Juergen Schrempp has created more value for investors in one day by resigning than he did over ten years as Daimler s boss. His successor has a good reputation, but noone expects miracles, so the share price move underlines what a burden Schrempp had become.
Fiat stock speeds ahead 21 Jul 2005 In part, this is a vote of confidence in Sergio Marchionne, its chief executive. But the stock now looks expensive on fundamentals. Investors may also be betting on corporate activity after this autumn's debtforequity swap, when the shareholder base will be fragmented.
Volkswagen scandal shows need for German reform 15 Jul 2005 Bribes, sex scandals and perks for union bosses. It all suggests that the German system of worker representation has gone rotten. There s an election in the offing. It s time for politicians to consider radical reform of the codetermination system.
Hedge funds burned on GM trade 6 May 2005 Some funds thought GM s bonds overreacted to its notorious profit warning. They bought the credit, shorting stock to hedge the position. This capital structure arbitrage ploy has suffered a double whammy: GM s early junking; and Kirk Kerkorian s raid on the stock.
Has Kerkorian gone mad with GM buy? 4 May 2005 The casino mogul is buying the carmaker s stock at a premium, raising his stake to some 9%. What does he know that the market doesn t? His success with Chrysler gives him credibility. But it s hard to see why anyone would own GM equity when the story is all about the debt.
BMW’s lower profits no cause for panic 3 May 2005 Operating profits at the luxury carmaker s core business were hit by high raw material prices and a weak dollar in Q1. But BMW should still benefit from a raft of new models. Its target of repeating last year s strong performance looks safe. Pretax profits at the luxury carmaker s core business were hit by high raw material prices and a weak dollar in Q1.
Daimler backs Chrysler to keep growing 28 Apr 2005 The German carmaker is pinning its hopes on new models and deepening problems at Ford and GM to maintain the recovery seen last year. Maybe it's right to do so. But it will need a blockbuster to counter the price war in the US. Daimler may yet have to eat its words.
VW sets the bar higher 21 Apr 2005 The German carmaker s new profit forecast implies it will cut losses at its Chinese operations this year. But the structural problems in its Chinese business can't be speedily reversed.
Fiat denial should be taken with a pinch of salt 19 Apr 2005 Just because the Italian group isn t seeking to renegotiate a E3bn convertible loan with its banks doesn t mean that there won t be talks. The banks would clearly benefit from stopping the conversion and Fiat might too. But negotiating new terms will be tricky.
MG Rover collapses 15 Apr 2005 All hopes of reviving talks to save the British carmaker have finally been quashed. But this should have been obvious from the outset. Labour s decision to keep dripfeeding the company has proven costly.
Piaggio’s E150m bond will test jittery markets 14 Apr 2005 The maker of Vespa plans to issue a highyield bond to refinance a bond issued by Aprilia, the motorcycle maker it bought last year. Market conditions are hardly ideal. But if Piaggio fails, major shareholder Colannino will foot the bill.
Ford shouldn’t be tarred by GM brush 13 Apr 2005 Both US carmakers have issued profit warnings amid rising competition and healthcare costs. S&P rates both equally one notch above junk. But Ford has stronger cash flow generation and is realistic about its problems. GM looks like it deserves to be junked. But Ford doesn't.
Nothing left of MG Rover 8 Apr 2005 The carmaker s equity was worth just £10 in 2000. But its assets are now worth far less than its liabilities. Much value has been destroyed. Rover might have been saved had it opted for the niche sportscar option proposed by Alchemy five years ago. Now there s little to resurrect.
MG Rover saga a lesson in cynicism 5 Apr 2005 The only real political imperative is that Rover shouldn't collapse just before the election. Pity the taxpayer. Cynical managers sucked millions out of the British carmaker without fixing it. Politicians may pour in millions without fixing it either.
Daimler makes wrong call on Smart 1 Apr 2005 The German carmaker has elected to spend E1.2bn fixing its heavily lossmaking compactcar business rather than shut it. This is a risky gamble. Smart may not be fixable. And trying to do so will deflect management from sorting out Mercedes.