The remaining bidders for the ailing Takata Corporation are insisting on a court-mediated turnaround for the airbag supplier’s operations. Takata is in the midst of selecting a financial backer after incurring billions of dollars in costs to replace tens of millions of defective airbag inflators linked to a minimum of sixteen deaths.
However, Takata has stated it would much prefer an out-of-court process for its operations to ensure the uninterrupted supply of replacement inflators. Keeping the turnaround private also would also be a way for the founding Takata family to avoid the complete obliteration of the company’s share values. (Read More…)
Hyundai Motor Group has placed its supervisory employees’ wages into stasis in an effort to minimize costs and better cope with the financial hardship it expects to face in 2017.
Roughly 35,000 staff managers are affected by the wage freeze — the majority being employees at Hyundai and Kia Motors. (Read More…)
A record 31 percent of all new vehicles sold this year in the U.S. are leased. I spent a good part of my career studying why some people refuse to lease. Much of their resistance stems from bad buzz. Some say it’s because of the stories they heard about ’80s-era open-end leases where owners were responsible for paying the car’s residual value at lease end. (These are the same customers who will not buy a Hyundai today because they produced crappy cars in the ’80s.) Others oppose leasing because they heard about a guy whose cousin’s neighbor had to pay $5,000 in wear and tear or excess mileage charges at lease end. And there are those of you who will brag comment below about how you always pay cash for your cars and don’t understand why other people won’t follow your lead.
This article is not designed to convert such non-believers to leasing. This advice, drawn from my years in the auto finance business, is for buyers who know the basics and benefits of leasing, want some timely tips on how to get the lowest possible payments, and want to pay less money on lease-end charges.
A company that still has yet to build its “game-changing” car will need to find another “storyteller.”
That, the UK will finally have an answer to The Clash, and Cadillac has a dogfight with Silicon Valley … after the break.
Famous for being a failed savior, a financial hound of Hades has come to the aid of Gawker Media and its many online publications.
Cerberus Capital Management L.P., the infamous private equity firm that produced headline gold — and not much else — after its ill-fated 2007 purchase of Chrysler, is now offering cash to another bankrupt company. The firm announced it will hand Gawker $22 million to keep the lights on while the media giant completes its bankruptcy proceedings and sell-off. (Read More…)
Somewhere between storming the beaches at Normandy and marching into Berlin, General Dwight D. Eisenhower became enamored with the German Autobahn system of superhighways, and so resolved to create a similar system in the United States — or so goes the legend.
After the war, America began to build out from its crowded urban cores, placing new homes and businesses where before there was farmland and wilderness. At first, these new developments were reachable only by hastily expanded surface streets, and longer distance trips used the U.S. Highway system of two-lane roads first designed in the 1920s.
For a forward thinking superpower, this was not enough. Enter the Interstate Highway System — and the Highway Trust Fund that literally paid to pave its way.
Business Insider transportation editor Matthew DeBord (formerly of Jalopnik too) said Tesla and Fiat Chrysler’s stock show both companies’ susceptibility to market volatility and that each automaker could be in dire situations if a mild recession were to rear its head again.
(Although he does note that the best return on an investment this time last year would have been a few hundred bucks into FCA’s stock.)
Tesla may have more in common with FCA than it likes in terms of market unpredictability, which could raise the specter of a merger if its Model 3 isn’t on time or if the economy takes a dive, DeBord writes. As long as Musk doesn’t talk openly about hugging Mary Barra, he may have a decent shot.
Volkswagen will post Wednesday its first quarterly loss in 15 years after the automaker was rocked this summer with a scandal that affected 11 million vehicles and cost the company tens of billions of dollars in lost value already.
Bloomberg (via Automotive News) reported that 10 analysts estimated that the company would post a $3.6 billion loss for the quarter ending Sept. 30.
Although the company said it reserved more than $7 billion to help pay for the scandal, many agree that the loss will be far greater — from $16 billion to $86 billion.
Markets around the world are down, down, down, down and down.
At the time of this writing, the Dow Jones Industrial Average is down roughly 650 points on Monday, which is more than 1,500 points off of where we were at the beginning of August. A lot of the run is fueled by fears that China is tapering off its growth (or they’ve been making it up for a while) and that Europe is tinkering on the brink of sinking into another recession. (Read More…)
Tesla’s second stock offering netted the automaker $738 million in cash for its Gigafactory, Model 3 development, and dealer and service upgrades, Bloomberg is reporting.
Banks exercised their options to buy more stock than the initial $500 million estimate, with underwriters Morgan Stanley and Goldman Sachs buying more than 2 million of the available 3.1 million shares. Tesla CEO Elon Musk said he would be interested in buying $20 million worth of shares in the offering.
(Before the stock offering, the banking arms of Morgan Stanley and Goldman Sachs loaned Musk a combined $475 million, to which Musk pays market rate and is separate from their investment divisions, according to the offering.)
Shares of Tesla were down more than 3 percent in Thursday trading to $245. (Read More…)
Wells Fargo will rein in its subprime lending business, limiting subprime car loans to 10 percent of auto loans it originates. According to the New York Times, the move comes amid concerns that the market for subprime car loans is expanding too quickly.
One of the
best worst things about the Internet is how many “experts” there are on every single subject under the sun. Among the easiest subjects for anybody to obtain indisputable guru-like status on, based on what I see around the web, is finance.
And, boy, do they love to share their expertise, solicited or not.
Alan Zibel and Annamaria Andriotis of the Wall Street Journal (subscription required) report that consumer loans to borrowers with bad credit, including those for cars and light trucks, are now approaching 40% of loans issued, the highest percentage since the start of the financial crisis in 2007-08.
Almost four of every 10 loans for autos, credit cards and personal borrowing in the U.S. went to subprime customers during the first 11 months of 2014, according to data compiled for The Wall Street Journal by credit-reporting firm Equifax.
That amounted to more than 50 million consumer loans and cards totaling more than $189 billion, the highest levels since 2007, when subprime loans represented 41% of consumer lending outside of home mortgages. Equifax defines subprime borrowers as those with a credit score below 640 on a scale that tops out at 850.
Credit Unions will now be able to follow up with applicants who were unable to procure loans, and see if they pursued credit at other institutions, thanks to a new service from Equifax.
Today’s Chart comes from J.D. Power, showing the growth of long term loans in the Canadian car market. While 96 month loans are just starting to hit American consumers, the 8 year loan terms have been present in the Great White North for some time. A friend was recently looking at a modestly equipped Big Three Pickup, which would be used for work. The truck, with an MSRP of $35,000 CAD (plus 13 percent sales tax), was offered at 96 months for 3.99%. That would have added up to $6,000 in interest payments over the loan term.