The French government is denying that it plans to acquire a stake in PSA, but France’s Prime Minister told reporters that mechanisms for providing government assistance have already been vetted.
It has been repeatedly suggested that GM should use its ample profits to buy back the shares held by the U.S. government (don’t forget the Canadians.). Finally, GM listens to reasons. Or, possibly, strong suggestions from Washington. GM will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion, or $27.50 per share, the company said in a statement The share buyback is part of the Treasury’s plan, also announced today, to fully exit its entire holdings of GM stock within 12 to 15 months, subject to market conditions. (Read More…)
A while ago, I chatted with an industry executive who had “done time” (his words) at GM. I asked him how that was, and he said: “There is always that talk about the current Big Deal that will bring the company back to its former glory. When that Big Deal fizzles, it’s on to the next Big Deal.” A formerly Big Deal is fizzling in Europe.
As we reported yesterday, General Motors and PSA have put the brakes on a broader alliance. Allegedly after PSA accepted financial assistance from the French government, as Reuters says, which broke the story. GM’s stock price immediately changed course southwards, because the consequences can be enormous.. (Read More…)
TTAC alumni Ed Niedermeyer has an op-ed in the Wall Street Journal. The piece discusses the spin surrounding the bailout in this year’s campaign. Check it out here.
What percentage of new cars sold this year in the United States have European badges?
Longtime reader and new contributor Tyler Vandermeulen is a financial analyst by day. He took a deep dive into the EDGAR database to unearth how much of GM’s money flows abroad. Please welcome Tyler with the respect he deserves. Rude comments will not be tolerated.
Before the bailout of General Motors, it was well understood that the world’s largest automaker was losing huge amounts of money in the US and was staying afloat thanks to stronger performance in overseas markets. Since the bailout, however, that dynamic has been turned on its head. Thanks to a leaner manufacturing footprint, debt eliminations and steadily recovering sales, GM’s US operations have generated the lion’s share of the company’s profit since the bailout. And now, as the rest of the world economy slows, GM is spending more and more of its taxpayer-enhanced cash pile to shore up its faltering foreign divisions. In fact, according to an analysis of GM’s SEC filings, the company is likely to incur over $6.5 billion in losses and expenditures overseas in the 2011-2014 period, not counting over $1.6b in foreign potential legal liabilities or several other incalculable expenses that could add up to billions more. Not only are these expenses a challenge to GM’s overall financial health at a time when it also faces billion-dollar expenditures on pensions in the US, it shows the basic problem with national bailouts of global companies. Taxpayers who were told they were saving an American company are now seeing their tax dollars flowing overseas by the billions. (Read More…)
People in Europe had a lot of time to think about their troubled future during their long vacation. Coming back to work, they are “ready to shut plants and lay off staff,” as Reuters observes. Executives and union leaders are said to be in rare agreement over who to emulate: Obama, the UAW, and Detroit. Europeans want their bailout too. Some do, at least. (Read More…)
Auto plant visits, long a staple of election-year vote-courting for politicians, are now banned at both GM and Chrysler plants until after the votes have been counted.
The Daily Caller says it has emails that prove that the pensions of 20,000 salaried retirees at Delphi were terminated “solely because those retirees were not members of labor unions.”
The emails, says the conservative website “contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts about the sequence of events surrounding the termination of those non-union pensions, and that administration figures violated federal law.” (Read More…)