Tag: Bailout

By on June 14, 2012

Moody’s has been less than impressed with GM’s recent pension cuts/buyouts: (Read More…)

By on May 8, 2012

Republican Presidential hopeful Mitt Romney told voters in Ohio that he deserves “a lot of credit” for the auto industry turnaround since the bailout era.

(Read More…)

By on April 27, 2012

Vice-President Joe Biden has been talking about the auto bailout frequently as the campaign for his re-election heats up in the coming months. A speech to NYU had him tout the record of the Obama administration, while also criticizing Gov. Mitt Romney’s famous “Let Detroit Go Bankrupt” op-ed.

(Read More…)

By on April 19, 2012

Old habits die hard. Whether it’s GM’s desire to slice-and-dice its fuel economy achievements to make them look better than they are, or our instinct to correct the record, it’s all just a little bit of history repeating.

(Read More…)

By on March 28, 2012

A year ago nearly to the day, I was investigating the connection between Libyan dictator Muammar Gaddafi and Fiat. With an American-led intervention in Libya underway, Reuters had reported that a Wikileaked State Department document revealed that the Libyan Government owned a two-percent stake in the automaker Fiat as recently as 2006. When I contacted Fiat’s international media relations department for comment, I received this response:

Dear Mr Niedermeyer,

Further to your email, I would mention that the Reuters report you refer to is incorrect. As too are other similar mentions that have appeared recently in the media concerning the LIA’s holdings in Fiat.

The LIA sold all of its 14% shareholding in Fiat SpA in 1986 – ten years after its initial stake was bought.  It no longer has a stake in Fiat SpA.

I trust that this clarifies the matter.

It didn’t, actually. In fact the matter remained as clear as mud to me until just now, when I saw Reuters’ report that Italian police have seized $1.46 billion worth of Gaddafi assets, including “stakes in… carmaker Fiat,” under orders from the International Criminal Court.
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By on March 21, 2012

After GM’s  IPO, stockholders looked with great anxiety at the 32 percent the U.S. government still holds in General Motors. Allegedly, the U.S. government wanted to shed that share as quickly as possible, and someone dumping the stock does not make for rising stock prices. Now, GM is sending out smoke signals that a sale is far from imminent. GM’s chief spokesman Selim Bingol wrote in a blog  that “the day will eventually come when the Treasury sells its GM stake. When is anybody’s guess (we have no say in the matter).” (Read More…)

By on February 18, 2012

Days after Republican Presidential candidate Mitt Romney penned an op-ed in the Detroit News over his thoughts on the bailout, UAW President Bob King is firing back.

(Read More…)

By on February 14, 2012

Republican Presidential candidate Mitt Romney published an op-ed in the Detroit News calling the auto bailout “crony capitalism on a grand scale.” Boasting of his Michigan roots, Romney takes the Obama administration and the UAW to task for what he suggests is a symbiotic relationship between the two that allowed the union to get stakes in GM and Chrysler. In short, nothing new from the man who is running an election that is a referendum on Obama’s presidency.

(Read More…)

By on January 30, 2012

Starting in March, the Chevrolet Volt will be eligible to use the HOV lane on California highways. The catch? You have to buy a new Volt to use the carpool lane.

(Read More…)

By on January 12, 2012

Ford’s Australia branch is getting $34 million AUD (roughly $35 million U.S. dollars) plus an unspecified contribution from the government of Victoria (an Australian state), to sustain a Ford plant in Melbourne.  Total investment is said to be roughly $105 million USD. Holden, GM’s Australian division, is looking for some government funds too, and its raising questions about the viability of Australia’s domestic car industry.

(Read More…)

By on December 22, 2011
Automaker 2008 model year 2025 model year % Change
Aston Martin 1,370 1,182 -13%
BMW 353,120 550,665 56%
Chrysler-Fiat 1,659,950 768,241 -54%
Daimler 287,330 441,786 54%
Ferrari 1,450 7,658 428%
Ford 1,770,893 2,224,586 26%
Greely/Volvo 98,397 143,696 46%
General Motors 3,095,188 3,197,943 3%
Honda 1,511,779 1,898,018 26%
Hyundai 391,027 845,386 116%
Kia 281,452 460,436 64%
Lotus 252 316 25%
Mazda 302,546 368,172 22%
Mitsubishi 100,729 109,692 9%
Nissan 1,023,415 1,441,229 41%
Porsche 37,706 51,915 38%
Spyker/Saab 25,956 26,605 3%
Subaru 198,581 331,692 67%
Suzuki 114,658 124,528 9%
Tata/Jaguar-Land Rover 65,180 122,223 88%
Tesla 800 31,974 3897%
Toyota 2,211,500 3,318,069 50%
Volkswagen 318,482 784,447 146%
TOTAL 13,851,761 17,250,459 25%

Reasonable minds can disagree about the wisdom of the auto bailout, but according to analysis by the EPA and Department of Transportation (based on data from the Department of Energy and auto forecasters CSM), the Government’s rescue of GM and Chrysler may not have been the best idea (at least from a market perspective). According to data buried in the EPA/DOT proposed rule for 2017-2025 fuel economy standards [PDF here], Fiat-Chrysler is predicted to be the sick man of the auto industry by 2025, losing over half of its 2008 sales volume, while GM is expected to improve by only 3%, the second-worst projected performance (after Aston-Martin). In terms of percentages, even lowly Suzuki and Mitsubishi are projected to grow faster than The Mighty General. Ouch.

On the other hand, the proposed rule notes that data will be finalized before the final rule comes out. Besides, the agencies appropriately admit (in as many words) that projecting auto sales so far into the future is one hell of a crapshoot. Still, with the obvious exception of “Saab-Spyker” and with some skepticism about the projection’s optimism about overall market growth aside, these are not the craziest guesses I could imagine. Who knows what the future holds, but it certainly is a bit troubling that the government’s own data suggests the two automakers it bailed out may well have some of the weaker performances of the next 14 years. At least the Treasury could have sold off their remaining GM stock before this report was released…

By on November 17, 2011

One of the great mysteries to many inside the auto industry is why is GM’s stock price so low? Though the company had a weak third quarter, its stock price has been stuck well below its IPO price for much of the last year, despite a return to profitability. Though GM faces challenges, few inside the auto industry understand why its stock price remains so low. One theory: the government’s mere continued presence as a major stockholder creates uncertainty around the company. If this is the case, it creates something of a vicious cycle: the lower the stock price, the less likely the government is to sell its  shares, leaving it lingering with no exit strategy, in turn driving the stock lower. Though that’s not likely to be the whole story, one thing is certain: the government has been forced to increase its loss estimate for the GM bailout. The Detroit News reports that the Treasury’s losses on GM are now estimated at $23.6b, up from $14.4b. And with an election looming, it seems likely that the White House will sell within the next six months. But will the government’s desire to protect itself politically trade off with GM’s PR? After all, whatever the Treasury’s final loss is, that number will be pinned to GM as a symbol of what it owes the American people. On the other hand, with most analysts insisting that GM stock is undervalued, another year of government ownership could convince investors to bid up the price, greatly reducing GM’s public debt. Too bad electoral politics will probably prevent that from happening….

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