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Steve Funk

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  • Chevy Volt: The Enviro-Friendly Way Of Destroying Value [View article]
    russLL,
    Do you propose GM simply give the market to the Toyota Sequoia and Nissan Armada? All full-line manufacturers have vehicles in this class.
    May 1 12:30 AM | Likes Like |Link to Comment
  • Chevy Volt: The Enviro-Friendly Way Of Destroying Value [View article]
    Tdot,
    At least some of the "channel stuffing" was prompted by overcapacity and union/ government rules that made the company pay for labor whether the were making cars or not. That caused some twisted thinking. Capacity is much more in line now and rental car companies sold off making it much easier to match production & demand.
    Apr 18 11:25 PM | 1 Like Like |Link to Comment
  • Chevy Volt: The Enviro-Friendly Way Of Destroying Value [View article]
    datadave,
    It is an often repeated misnomer that Ford makes more money on trucks than GM. They both sell roughly the same number of trucks and SUV's. Toyota has Tundra capacity of 300,000 units http://bit.ly/Zr9Paw. For 2012 Ford sold 645,000 F-150's and GM has always been close when Chevy and GMC sales are combined. Bottom line is all three have important truck lines. I don't think that you will find any data that proves GM, Toyota, or Ford sacrifice their car lines for truck sales. It just does not make business sense.
    Apr 17 11:25 AM | 1 Like Like |Link to Comment
  • Chevy Volt: The Enviro-Friendly Way Of Destroying Value [View article]
    Tdot,
    Wikipedia has become corporate brochure ware and would certainly not air internal squabbles.

    Yes, the Volt was done and getting ready for production as early as 2007 (http://ti.me/Zrumau). But after the bailout when divisions were being closed and sold, there were stories (not finding them now) that the Volt was on the chopping block.
    Mar 28 02:25 PM | Likes Like |Link to Comment
  • Chevy Volt: The Enviro-Friendly Way Of Destroying Value [View article]
    Yes, the Volt was designed and ready to go when the government takeover happened, but GM had decided to delay production, then not.
    Mar 28 02:13 PM | 1 Like Like |Link to Comment
  • Chevy Volt: The Enviro-Friendly Way Of Destroying Value [View article]
    Billwzw,
    You are right. The government has had a huge hand in pushing the EV's. Manufacturers will not be able to meet new CAFE standards with traditional engines.

    The second and bigger problem is that although the US is selling GM shares, they still have a board seat. As does the UAW and Canada. If I recall, the Volt decision was announced the shortly after Obama fired one of a series of CEO's. Coincidence?

    GM will have to stick with the Volt for now.
    Mar 28 11:21 AM | Likes Like |Link to Comment
  • General Motors: It Is Better Than Ever Before [View article]
    elroy,
    I am not a legal expert, but there are very restrictive dealership laws in all 50 states. Many of the laws can be traced back to the 1930's when manufacturers could own their own dealerships in profitable territories and revoke dealerships at will, devastating some small towns. These laws make it hard to close dealerships. When GM shut down the Olds division it cost billions, much of that was negotiating and compensating dealers for their loss. Interestingly, Elon Musk and Tesla are attempting to skirt the dealership laws with his new internet ordering. He has been sued in Massachusetts (I think) and won, but has been banned from delivering cars in Kansas. It will be interesting to see him challenge these old laws. He has written about the dealer laws on the Tesla web site and in the Tesla annual report.
    Mar 19 12:35 PM | Likes Like |Link to Comment
  • General Motors: It Is Better Than Ever Before [View article]
    tcbracing,
    There was a lump sum buyout of salary workers and a pension change from defined benefit to defined contribution. I am a GM supporter, but you have to be honest, those moves resulted in the retirees getting less and GM saving billions by their own admission. The UAW still has the defined benefit, do they not? The health premium increases are a "cut" of sorts.
    Mar 19 12:29 PM | Likes Like |Link to Comment
  • General Motors: It Is Better Than Ever Before [View article]
    Elroy,
    I have not heard many people claim that GM had a normal bankruptcy. In fact rule of law, including state dealership laws, were simply set aside to quickly facilitate the reorganization.

    You mention PBGC. It is probably a big reason for the bailout. If the GM pensioners were allowed to go into the PBGC it would have brought PBGC down. Instead, UAW money was privately quarantined, my understanding, while salary retirees benefits were arbitrarily cut. I predict this precedent of the Executive branch assuming control of a corporation will have future negative repercusions.
    Mar 18 04:07 PM | Likes Like |Link to Comment
  • General Motors: It Is Better Than Ever Before [View article]
    My thoughts exactly. After the US sells their shares (2014) I don't see how they can not start paying a dividend. Every other auto company stock has a dividend.
    Mar 15 05:07 PM | Likes Like |Link to Comment
  • U.S. Sells More Of GM - What Happens Next? [View article]
    I don't disagree that the recession would have been much worse, and the bailout prevented that.

    In my confusing writing style, I was just trying to point out the very common argument: Do you want your pain all at once, without Novacain? or Do you prefer a water boarding slow death? I have personal involvement with this one that stops me from saying we should not have done the bailout. I do thing that costs will continue to pop up.

    Philosophy aside, my stock take on GM is that it might be a good time to buy later this year when the stock repurchase is almost done and betting that GM will start a dividend in 2014. Both events should help the stock.
    Mar 14 01:15 PM | 3 Likes Like |Link to Comment
  • General Motors Continues Its Struggle To Grow [View article]
    Muhammad,
    I am surprised that you did not list Volkswagon as a major competitor. VW is especially strong in Europe were GM is losing money with no end in sight.

    You also do not mention how the US government dumping shares right now might affect price. I can't imagine share price going up appreciably until after all US shares have been sold in early 2014.
    Mar 14 01:02 PM | Likes Like |Link to Comment
  • U.S. Sells More Of GM - What Happens Next? [View article]
    Derrick,
    Good analysis. Your small window analysis of the benefit of "saving" GM is good. You did not mention that many employee pensions would likely have wound up in the Pension Benefit Guarantee Corporation. The influx would almost surely have collapsed the PBGC and I think that was the icing on the cake causing the government to act the way they did.

    If you take the analysis outside the last five years you may see a different picture. Since the 1980 downturn US auto industry has steadily declined, with really two going out of business or being bought out by foreign companies (American Motors and Chrysler). For thirty years our federal, state, and local government continued to gouge industry and not put any meaningful industrial policy in place. The result is that our manufacturing industry has been gutted and I highly doubt that GM can survive long term. Even though their products are now world class, the pace of new model introductions has slowed since bankruptcy. Market share for North America has gone from 18.2% in 2010 to 16.9% in 2012. If that slide continues it will mean further downsizing for GM.

    Your analysis also assumes that General Motors would either exist, or cease to exist, and all associated jobs would follow. In reality the US would probably have bought the same number of cars each year, and most of those cars are built and sourced in the US. Japan and Germany would supply our vehicles and parts after a messy year or two of buy outs and reorganization. We may still wind up with that end result, only much more slowly and painfully than with government intervention.

    Anyone traveling on I-75 through Saginaw may be shocked to see Chinese characters on the factory that used to say GM Saginaw Steering Gear. That plant used to be an American icon of manufacturing. During the GM bankruptcy many subsidiaries and properties were essentially given away by DC lawyers in smoke filled rooms. There will be repercussions and costs from the GM bankruptcy that will surface for years to come.
    Mar 14 12:31 PM | 1 Like Like |Link to Comment
  • U.S. Sells More Of GM - What Happens Next? [View article]
    Lot's of rhetoric about this. Ford, I think, would have taken a bailout and was in line. The terms given GM would have wiped out the Ford family class stock and eliminated the family dividend, that many Ford families live off of.

    Instead they were given an approximately $5B loan to develop alternative fuel vehicles. You can call it what you want, but Ford is still saddled with much of the debt while GM was able to discharge most debt.
    Mar 14 11:59 AM | 1 Like Like |Link to Comment
  • Why You Should Go Long GM Now [View article]
    You make a plausible picture for GM sales and profits but what about the stock price when the US Government starts dumping shares? Will the UAW and Canada also dump shares? Last I checked that was about 51% of outstanding shares and would keep shares at the agreed upon offering price for the next year (I think around $27.50)?
    Mar 5 01:04 PM | Likes Like |Link to Comment
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