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  • Can GM Sustain Chevy Silverado's Sales Momentum Once Ford F-150's Production Falls In Line? [View article]
    Not without continuing to rely upon the disproportionate incentives which always have fueled any share Sierra/Silverado have won. The unknown risk is to Ford which, despite overwhelming marketplace acceptance of the Aluminum F-Series, won't have any clear insight into how much volume and share the model has power to hold once 2014 stocks have dwindled and consumers have only 2015 F-Series to choose from whose incentives, by design, SHOULD be nominal - though reaching back into GM's leadership for Mark LaNeve is unlikely to solidify Ford's commitment to margin over volume through either direct cash to buyers or back end stair steps and other form of dealer pay. In either scenario, GM will be relying heavily upon incentives to win any open share.

    But the REAL question BOTH makers should be wrestling with is how much more organic demand at present leveled is likely to remain durable with ATPs never having been higher and consumers now regularly delving into 84-month financing which eventually MUST sideline at least a portion of the buying cycle for a period.
    Apr 28, 2015. 04:45 AM | 1 Like Like |Link to Comment
  • Memo To Ford's Management: Go On The Offensive And Buy Back $10 Billion Worth Of Your Own Shares [View article]
    Own 100 shares for 6 months and you qualify for two X-Plan PINs each year.
    Mar 19, 2015. 03:11 PM | 2 Likes Like |Link to Comment
  • Memo To Ford's Management: Go On The Offensive And Buy Back $10 Billion Worth Of Your Own Shares [View article]
    This is a nutty recommendation. Few things have shown WORSE historic shareholder value than stock buybacks, and using GM as a comparative rationale is ludicrous. GM found itself with a heap of other people's money and more of it than it has uses - even after croaking consumers with flawed product, sponsoring football clubs before exiting markets and subsidizing Opel and Cadillac. Ultimately, its board succumbed to the extortive demands of one of its bailout engineers and made the deal that left current leadership empaneled - NOT what was best for its investors which would've been a one-time special distribution in lieu of actually doing the right thing by giving back the massive treasure trove to taxpayers and bondholders from whom it was expropriated.
    Mar 19, 2015. 03:11 PM | 3 Likes Like |Link to Comment
  • T-Mobile's Legere calls for spectrum-auction rule changes [View news story]
    So, TMO doesn't like it when only a few benefit, especially if it's not included among them. Yet it believes only wireless subscribers, its in particular, should be given a statutory benefit rather than allowing the entire U.S. population to benefit from auctioning spectrum on a sheer high-bidder basis. The self-serving hypocrisy is astounding.

    The real issue is that now TMO has had a chance to slash and burn its way through the $4B breakup windfall the Obama administration decided T should pay rather than allowing the acquisition to proceed, it's fresh out of ideas except to insist it should be given its own statutorily mandated corporate SNAP card to help it achieve what it's failed to become as an independent business in the competitive marketplace.

    Boo Hoo!
    Feb 19, 2015. 10:07 AM | 1 Like Like |Link to Comment
  • Ford: Review Of Q4 Earnings And What Lies In Store [View article]
    Inconsistent dividend payout? Not since its reinstatement as part of ONEFORD it hasn't been.
    Jan 30, 2015. 08:38 AM | 1 Like Like |Link to Comment
  • AT&T: The $10 Billion Non-Cash Charge Is Not As Bad As It Seems [View article]
    And also probably not the first spurious assertion made by pseudonym.
    Jan 19, 2015. 02:29 PM | 5 Likes Like |Link to Comment
  • U.S., China And Lower Crude Prices Will Fuel General Motors' Growth [View article]
    Pay consumers enough and they'll buy as much of anything you've got to sell - whether or not actual demand exists.

    Just like GM right up to the moment of its implosion, selling lots of cars never was GM's challenge. Earning enough from people willing to pay enough to make them worth producing is another matter entirely. But nearly $60B of other peoples' unearned money certainly doesn't hurt.
    Jan 5, 2015. 10:11 AM | Likes Like |Link to Comment
  • MKC Test-Drive: Is Lincoln Worth More Than Tesla? [View article]
    A truly erroneous comparison in just about every respect, from the markets they serve and marketspace potential to the investors that own each business's shares.

    Tesla enjoys an evangelical investor following which also realizes the extent to which federal and state governments actually pay consumers to buy Teslas which, much like the $30B of unearned cash on GM's balance sheet, some investors just can't help thinking provides some sort of insurmountable competitive advantage that justifies the share prices' irrational exuberance.

    Tesla also has a side business of selling zero emission credits to the likes of Detroit which, like finance and insurance products to a dealership, may be a more profitable adjunct to the cars themselves - none of which require million square foot facilities or labor unions.

    Lincoln remains a neglected and barely relevant brand of a maker which, much like Cadillac, has very little innate sense of "luxury", let alone making peoducts imbued with it. But that doesn't mean Lincoln can't be worthwhile - or even highly profitable. Though I personally would've preferred Ford killing off Lincoln entirely back in 2009 and reintroducing it as a single uncompromising vehicle sold through a limited number of exclusice Ford outlets until actual public demand could drive any future growth including its own (MUCH smaller) retail network.

    Lincoln's value comes from the tremendous margin potential it can earn from products derived from shared platforms on existing lines at existing facilities for a very small incremental cost. Every Lincoln's manufacture also helps to amortize the cost of every Ford vehicle the same plants produce. That's opportunity number one, which only ever REALLY becomes viable when each nameplate Lincoln sells sees enough volume to be self-sustainingly worthwhile, something only MKZ, MKC and maybe Navigator BARELY may be today.

    Lincoln's massive potential comes from the possibility of taking the same products made on the same lines and introducing them into a market like China where Ford is exceptionally well-regarded and Lincoln is utterly devoid of brand damaging histrionics that's SO big that Lincoln very possibly could double its total volume almost overnight without an additional nickel of capital manufacturing investment or expenditure. Even if Ford can't immediately repatriate those additional earnings, it CAN reinvest them locally to further offset its ongoing local manufacturing expansion to a point at which Ford ALSO builds Lincolns domestically within China and perhaps eventually for export.

    THAT'S the potential value Lincoln represents which doesn't have a hope in hell of becoming a BMW, Audi or Lexus anytime soon at home - but nevertheless has the potential to become extremely additively profitable while simultaneously lowering the Blue Oval's entire cost basis.
    Dec 28, 2014. 03:29 PM | 4 Likes Like |Link to Comment
  • Update: GM's Embarrassment Continues [View article]
    Any so-called embarrassment is no problem of GM's. In fact, GM has been thriving upon it with enough constancy and consistency to make Japanese manufacturing feel insecure.

    Consumers haven't cared one whit that GM failed or for the countless creditors and bondholders GM and the federal government conspired to leave bereft of countless billions to which they were entitled. Nor do they seem to care that GM was ransomed from its own apathy, arrogance and incompetence by billions of taxpayer dollars GM never will repay and countless billions more to which it was granted access to which its competitors were not. They also don't seem to care that as a reward for failing, GM was picked up, dusted off and had enough cash shoved in its pockets to ensure it never could fail again.

    But even more egregiously, consumers haven't cared that each vehicle GM forever will produce comes at the expense of legitimate competitors which already bested GM in the marketplace using only the resources they had earned and doing only what they had the capacity to muster. What so many flag waving, allegiance pledging U.S. consumers seem perfectly willing to ignore completely is how GM today is a blatant affront to all they claim to espouse.

    Of course, the consumer also remains blithely ignorant and uncaring of the fact that in bailing out GM, the federal government also bailed out a far more malevolent force which was a key contributor to Detroit's 40 year decline and also had extincted itself. About 25% of GM and fully 50% of Chrysler were carved out to prop up the UAW pension and benefit scheme which wasn't sustainable from the first day it was extorted (or surrendered to). Of course, UAW had every motive to extend sweetheart terms to these two makers in which it had such substantial stakes, and it did - also at the expense of every legitimate car maker but also at the greater expense of future hires whom UAW consigned to work for half-pay to subsidize the wages of the workforce that actually did the raping and pillaging.

    But if capitalist and economic hypocrisy weren't enough to motivate John Q. Buyer, certainly moral and ethical ones would - like GM conspiring, neglecting, ignoring and siloing into secrecy a lethal part defect whose victims GM's litigation team actually had the temerity to threaten with countersuits. Even five years after proclaiming to have gotten religion and become USDA certified born again, GM's culture of dysfunction is laid bare for all to see, proving once and for all that without the existential motivation to change, GM wouldn't - and didn't. But of course, a retirement here, a press conference there and a new and politically correct CEO who, despite an entire career being steeped in the very culture she committed to change, claims to be the one person who's uniquely qualified for the challenge.

    After testimony that cast even Union Carbide and Agent Orange in a favorable light, certainly consumers would snap to awareness of the golem their continued patronage and indifference was fostering. Not a chance. Albeit not without some clever dog and pony by Ringling Bros. and Valukas and Feinberg staging the second greatest show on earth and maybe a mild incentive spend uptick, GM sales continue on their upward trajectory while it also enjoys a serendipitous boost from a couple of quarters everybody expected to be bad beyond measure which simply gave GM a chance to roll-in other liabilities it had been carrying and get them off the books before someone noticed.

    That's not to say GM hasn't exhibited some continued weakness like Cadillac. But just like Opel, eventually making a few million is merely a matter of time - and throwing billions more of good money after bad. But unlike it's competitors which are bound to feasting upon only what they've stocked in their own cupboards, GM has enough unearned cash on hand to fund dozens of mulligans on a grand scale before it ever REALLY needs to worry about getting things right. After all, the key to reviving a luxury brand people don't value enough to spend more than a fraction of what they're willing to pay to its competitors is simply charging them more. After all, we all know that treating someone a certain way long enough is the best way to get them to behave as you'd like.

    All that unearned cash on GM's balance sheet and the mountains of indifference on Main Street leave GM in a position in which it simply can do no wrong. Because even when it does, the great American buying public simply doubles, triples and quadruples down and demands more. Heck, after adjusting its expectations downward for clearly identifiable, correctable and non-recurring reasons, Ford stock took a bigger dump over another Escape recall and the same weak South America and Europe that's plaguing all mass market makers than GM spending billions upon 30M recalls, liability settlements and, oh yeah... apparently being culpable for helping to end the lives of as many as 23 former customers prematurely.

    Hell, I detest GM, but how could I advise anybody to do anything but go long GM with all they've got? It's a pretty safe bet when you can short the U.S. consumer as a hedge.
    Oct 6, 2014. 03:17 AM | 3 Likes Like |Link to Comment
  • GM Rated Rotten, $31 Price Target, As It Puts The 'Brakes' On Russia [View article]
    Selling lots of vehicles never has been GM's challenge. In fact, it was GM's relentless pursuit of volume even in the absence of demand that was the single largest driver of its failure as systemic bloat in everything from manufacturing footprint to dealer capacity ultimately required GM to pay consumers more to buy its cars than it grossed producing them.

    It's also made notoriously poor use of its cash windfall making irrational massive expenditures to sponsor Manchester United shortly before deciding Chevy would abandon Europe entirely as part of the latest Opel about face du jour. This while earning shockingly little from so much as legitimate competitors have derived so much from so relatively little.

    It's sweetheart UAW labor deal is about to expire and it has invested in China where the only gains of note are in commodity rural vans that yield hundreds rather than thousands for the increased overhead risk GM carries into China's eventual bubble burst. As others like Ford confronted Europe squarely and absorbed costs immediately, GM has much of its work ahead despite all the resources in the world with which it could've leapfrogged the market.

    The ignition recalls and lawsuits (which betray the trust fund baby as also having cheated on his entrance exams) are actually a boon for GM as it can use the quarterly misses to bury scads of other unflattering results, presuming it can contain them in a couple of quarters.

    Barra is talented yet remains a product of the very culture she claims to be uniquely able to change. Few surgeons operate well on themselves. Even after five years of supposed religion after having its future ransomed, GM continues to do as little as it must rather than as much as it can.

    Yes, product is improved - as it damn well should be given all the resources lavished upon GM. But the results are hardly impressive relative to what others have achieved from far less. Corvette is a remarkable vehicle - which commands merely a quarter of its performance peers' prices. And for the resources that could've returned man to the moon and cured a cancer or two, one should wonder exactly what kind of value GM produces.
    Aug 27, 2014. 05:04 AM | 2 Likes Like |Link to Comment
  • Mr. Market Errs In Valuing Ford Motor At 9 Times Earnings [View article]
    The constant downward pressure on Ford shares and the persistent disconnect between its business performance and share price is owed to just one factor, the presumption that GM is SO cash rich that Ford can't possibly outperform it in the longer term no matter how diligently GM may continue trying to undermine itself. GM's balance sheet can indulge multiple blunders for each critical venture Ford must get right the first time. Cases in point are its p perennial Opel Chevrolet flip flops which GM still hasn't mustered into profitability despite spending billions more and Ford Europe having broke above ground this quarter. How many iterations of the Malibooboo has GM remade in just a few years as Ford pegged Fusion cold?

    Even though GM continues to serially prove skeptics right and its own shares flounder, the presumption remains that its more than nine lives worth of unearned cash on hand will nevertheless be too much for Ford to outlast - no matter how wrong Ford ultimately will prove them.
    Jul 31, 2014. 04:11 AM | Likes Like |Link to Comment
  • The Powermat goes mainstream [View news story]
    Another investment asset GM was allowed to retain rather than repaying creditors, taxpayers and bondholders.
    Jul 28, 2014. 12:44 PM | Likes Like |Link to Comment
  • Citigroup analysts have high hopes for GM earnings, not so much for Ford [View news story]
    It's a chicken and egg. The ONLY value GM has is what others gave it at the expense of every legitimate maker. Even I could make a few billion from $60B or so - and I wouldn't even need to spend a decade blowing off and hiding liabilities. The fact that GM will repay victims with money it didn't even earn is almost as appalling as those who've turned deaf ears to both the bailout AND willful negligence. But it does show that nothing can't be overcome by a few more grand on the hood - despite being what fomented GM's death spiral to begin with.

    Despite needing to compete with its failed and bailed competitors, and being directly in the midst of changing over two of its most important products, Ford continues to do exceptionally well in maintaining both margins and share and will be right-footed in almost all significant product cadences.

    Undoubtedly, GM apologists will try to dismiss Ford's investment year in relative comparisons while hiding behind every cent of its product liability blips - which remain uncapped. Strange how GM did nothing to change despite being bailed out and its professions of religious awakening and was perfectly proud if itself until February - when it wasn't.

    Every cent GM profits from its incompetence comes at a cost several times that sum to legitimate businesses.
    Jul 21, 2014. 01:15 PM | 6 Likes Like |Link to Comment
  • Ford: Ready To Breakout? [View article]
    Buybacks are historically one of the worst ways to try to create shareholder value.
    Jul 6, 2014. 02:59 PM | 1 Like Like |Link to Comment
  • GM to offer comprehensive payout [View news story]
    Gotta love The General. Whether or not GM will enjoy ANY protection whatsoever under bankruptcy from claims pertaining to matters it didn't disclose is FAR from being a settled issue, especially those whose previous settlements resulted from frauds committed during discovery of their civil suits.
    Jun 25, 2014. 11:10 AM | 2 Likes Like |Link to Comment