Tag: Finance

By on August 21, 2017

vw logo volkswagen passat

Financial analysts and industry experts have been expecting Volkswagen to begin selling assets to help cope with the cost of its diesel emissions cheating scandal. The penalty for its deception may have already reached $24.2 billion, and German lawsuits could tack on another $8 billion.

However, Europe’s largest automaker says it’s not interested in selling off properties to recoup losses associated with the scandal. It has another plan to rake in the cash. (Read More…)

By on August 8, 2017

tesla model 3

Tesla Motors launched the Model 3 last month and has been scrambling to improve production volume as over 500,000 eagerly await delivery. However, by the time Tesla hits its targeted production rate of 10,000 units per week in 2018, it is still going to have months — if not a full year — of orders sizzling on the back burner.

It’s not the worst problem to have, since each reservation holder tossed down a $1,000 deposit. But CEO Elon Musk is aware that meeting demand is going to be an uphill battle. “We’re going to go through at least six months of manufacturing hell,” Musk told the press ahead of Model 3 launch event.

With the company already having spent over $2 billion in capital this year, restocking the safe is probably a good idea. As an upstart automaker framing itself as going into battle with traditional manufacturers, Tesla is issuing $1.5 billion in junky war bonds to fund the coming onslaught.  (Read More…)

By on June 27, 2017

VW logo, Image: Volkswagen

Volkswagen Group is continuing to clean house and has made plans to eliminate a significant number of its management staff using the same “early retirement” tactics offered to its longstanding labor force. It’s another obvious attempt on VW’s part to remake itself into a younger, forward-thinking automaker following the diesel emissions scandal — and save itself some money in the process.

While the layoffs aren’t explicitly targeted at Germany, the majority of outgoing managers will certainly come from its European workforce. Volkswagen has declined to comment on the exact number of hangers-on potentially affected by the plan.  (Read More…)

By on April 4, 2017

tesla factory fremont

Workers are likely spinning in office chairs and there’s probably a second frozen yogurt machine on its way to Fremont as you read this.

After hitting a springboard on Monday morning, Tesla’s stock market value has now surpassed that of the former top-ranked U.S. automaker General Motors. This comes just a day after the electric automaker’s surging shares pushed past Ford, placing it in the number two spot.

There’s nowhere to go except down. What, too cynical? (Read More…)

By on January 19, 2017

Takata-jpg

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…)

By on January 18, 2017

Hyundai Logo. Picture courtesy of autoblog.com

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…)

By on July 6, 2016

Suckers at the Stock Photo Dealership with a Credit Card

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.

(Read More…)

By on June 22, 2016

Faraday Future (, FF) FFZERO1 Concept vehicle at FF's pre-CES reveal event in Las Vegas on Monday, Jan. 4, 2016, Image: Bizuayehu Tesfaye/AP for Faraday Future

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.

(Read More…)

By on June 14, 2016

2008 chrysler sebring

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…)

By on April 14, 2016

Map from the January 1971 U.S. Department of Transportation Federal Highway Administration Interstate System Route Log & Finder List. "The routes and route numbers shown are those designated as of October 1, 1970."

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.

(Read More…)

By on January 3, 2016

Tesla Supercharger With Model S At Tesla Dealership

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.

(Read More…)

By on October 27, 2015

Matthias_Müller_2015-03-12_002

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.

(Read More…)

By on August 24, 2015

Come on Carlos, let’s hit up the Limeys for some money. Picture courtesy of motortrend.com

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…)

By on August 20, 2015

Tesla Model S Center Stage

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…)

By on March 2, 2015

2011-11-22_Wells_Fargo_ATMs_lit_at_night

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.

(Read More…)

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