BeachRider

September Auto Sales Weaken as Clunker Effect Ends

Wow, Chapter 13. Didn't they just come out of Chapter 11? Are people really expecting re-entry into Bankruptcy?

FWIW, Edmunds is projecting that GM's market share will climb from 19.1% to 22.4% in October. They are getting a larger share of a smaller pie.

And unemployment in Detroit still hovers around 35%

GM: What Its Progress Report Doesn't Say

I am not comfortable with this author flipping-off the potential for the taxpayers to get their money back. A lot of people said that about the Bank TARP and they have silently been proven wrong (there were some losses, but the gains prevailed). We need to keep GM's feet to the fire to see that we get the Automotive TARP back. GM doesn't have to hit 100-for-100 for that to happen (and they won't).
The TARP wasn't intended as a giveaway, just a bridge-loan the resulted in taxpayer ownership. The credit markets had seized and the unnecessary labor-loss that would have spiraled the US economy downward was avoided.
Even with the TARP, there has been substantial labor-loss (unemployment in Detroit is about 35%). Killing off Pontiac and Saturn (and liquidating Hummer and Opel) have saved monstrous operating cost at GM. We need to be diligent. We need to ignore those folks that advise that the money is already lost.

Ford: Popular Fiesta Hatchback Coming to the U.S.

The Fiesta has been a Ford nameplate since the late 70s. Ford has, at times, tried the models in the US, but they were 'too small'. You have to believe that, if Smartfortwo, Scion xB and Cube and other cars are now catching American interest, Ford should try it here again. It has always been one of Ford's biggest sellers, worldwide. Like Focus, it has its afficianados; there are some quite-sporty versions in some countries.

Cash for Clunkers Saps Demand

FDNY guy, the numbers are available at at: www.cars.gov/files/off... . It shows some variation from your scenario. Pickups, Vans & SUVs DOMINATED this program. Look through the listing and note only those vehicles that had 300-or-more of that year+model.

To get $4.5K, there had to be a substantial savings in gas, ~$500/year or more. That does take some time to counterbalance the Capital outlay. Certainly this wasn't 'help for the homeless', but it did help many in the next couple-of-tiers after that.

Cash for Clunkers Saps Demand

Bobax,
I agree that it helped some, that is why I said 'reinvigorate people and business that were on-the-edge'. I also advised that it kept some assembly-lines open.

The issue from the article was whether 'clunkers' actually helped the auto-industry and the economy-in-general. It also was judged on whether it was some kind of unbalanced windfall for a small part of the population. There WERE a few of those, but 'clunkers' probably was not on the top-5 list for such programs.

Cash for Clunkers Saps Demand

Cash for clunkers was an espresso-shot for auto manufacturing. It kept the assembly-lines open for modern-architecture, fuel-efficient vehicles. It also took a lot of inefficient vehicles off the road. This should lower USA gasoline consumption (albeit a small amount) and reinvigorate people and business that were on-the-edge.

I don't personally know anyone to whom the $3500 or $4500 'trade in value' was a windfall (it was worth something, though). I just know that a lot of ~15-year-old Explorers, JGCs, Suburbans and Tahoes ended up in the junk heap.

I doubt that it was cashflow-positive for the taxpayer, in the short term.

Ford: Profitability Projections

Are we still arguing that Automotive TARP? The financial TARP has yielded quick profits for the US taxpayer, so far. GM and Chrysler both needed capital when the credit markets were as dry as the Great Depression of 1930. Suitor companies (like Fiat) wouldn't have had sufficient funds-access to salvage much-of-anything at the time. GM and Chrysler would have had to liquidate and push unemployment to much-more than the 35% that exists in Detroit today.

I agree that, if the US taxpayer is still holding a lot of GM in a couple of years, then the Bush-Obama TARP will be deemed a failure. OTOH, if the TARP investment returns a sizeable profit to the taxpayers, then this will be like the Financial TARP.

So far, so good with the financial TARP (though not ALL news was good news).

100% Gainers and Their Estimated P/Es

JAVA on this list, too? Although this list is backward-looking, I can't help thinking that people are looking at entries that will continue this performance.

JAVA is being purchased by ORCL, as soon as Belgium clears it. If something happens and ORCL drops the acquisition plan (very low chance), then JAVA will decline in value.

Buy JAVA if you believe that the difference from today's price to the ORCL purchase price will give you enough value for the risk. The minor chance of significant falloff is what is causing the gap today.

I wish ORCL and JAVA well on this venture, but it will be a roller coaster for a little while!

Small-Car Inventory Shrinkage Bodes Well for New Production

GM got $50Bn and Chrysler got $15.5Bn from TARP. I suppose you might add another $1.5Bn for Chrysler Financial, but the $13.5Bn to GMAC was mostly real-estate, not automotive. I don't see $100Bn here, yet.
Most of us expect to get the TARP back. Only the GMAC real-estate could be construed as having toxic-assets.

That GM and Chrysler will recover some unemployed workers and generate new profits is a key area for the USA economy. It is a pretty sure bet that they have shed some of their pre-1990 workforce permanently, though.

Earnings Preview: Ford

The number just came out EPS was 21 cents loss, lower than even the best estimates. Cash burn was also around 1Bn and Ford's cash position was much better than expected. This stock is headed upward today. IMHO loosening in the credit markets will give Ford a lot of advantage to improve their already-improving market share.

I Was Wrong About GM Bankruptcy

GM certainly received exceptional (but not illegal) support to get through bankruptcy. Were it not for the special support of the Bush and Obama administrations, emergence from bankruptcy would never have happened so quickly. Shedding Opel, Vauxhaul, Holden, Pontiac, Hummer, SAAB & Saturn has radically altered the corporate culture. The stock ownership by UAW was mostly in lieu of bankruptcy-surviving contracts for benefits and other concessions. Hopefully, the UAW's interests have become better aligned with the-new-GM. UAW's position does make it interesting from the viewpoint of trust-buster monitoring, though. The new GM will be an odd artifact of American Laws.
They are probably ahead of Ford right now, but even minor liquidity improvements will push the balance back to Ford.
One can only hope that corporate governance will provide a better linkage between common-stock holders and the BoD of the-new-GM. Stockholders will twinge from the decapitation that they recently endured, but will come back when there are sufficient profits. The new stockholders need much more vigilance to keep GM from these kinds of situations.

Initial Claims at Lowest Rate Since January as Auto Plants Restart

There is also the issue of 'the new GM'. Doomsayers prophesized that GM would not emerge from bankruptcy until 2010 or 2011. GM should be out today.
Some Doomsayers advised the GM would forever be government-owned, too. We need to see GM's 61% government-stake reprivatized over the next 6-24 months to dispel that rumor, as well.
Honest to goodness, some folks admit that they wish the worst in this recovery, we all need to cause the best result (instead)!

Coming Soon: GM (Government Motors)

Anything that goes through Bankruptcy ends up in Government control (Judiciary or Executive), at least for a while. It doesn't sound like anyone here has an issue with the bankruptcy. President Bush sent us down the road to temporary governmental ownership in GM & Chrysler. I just hope that President Obama gets us out of it as quickly as possible.
I don't get why the assembly line laborers take so much of the blame for GM & Chrysler's long grind downward when it is clear that Management & Engineering had more control over that. All three can shoulder blame, though.
Chrysler (not the prime focus of this article) may be in far worse shape than GM. Most business models show that GM can still make good money, once they get bonds, labor costs, dealer structure and business-plan issues moving (it is a lot, to be sure).
I wouldn't be holding any GM stock today, but if Obama is still holding onto GM in three years, there will be hell to pay.

'Government' Motors or Ford: Which Automaker Will Remain Viable?

Are we not-holding the just-fired GM Management responsible for having the company in the sad state of today? I don't why they get off so scot-free. They certainly were advised about the need to modernize their product line in the 1974 Gas crisis. Going into 2008, GM's competitors to Honda Civic and Accord (both built in the USA) have never approached those engineering of fun-to-drive levels. Why aren't the GM Management and Engineering braintrust being lambasted alongside the Assembly-line laborers?

'Government' Motors or Ford: Which Automaker Will Remain Viable?

I have a GMC and a Ford, because I believe that it makes some difference. Since DC has been infusing GM with money (since Bush 43), it is no surprise that they are caught in this web of trouble.
1) If GM has no real value, then it should be liquidated and its assets distributed as such process dictates. There will be arguing, but this is simple law.
2) If GM has ongoing value, then it should be broken-up or reorganized to leverage that value. The long-term management at GM was simply not doing enough over the last 10+ years to avoid this issue. They were driving all-of GM to solution #1.
3) All of GM's costs need to be redone with the surviving parts from #2. This includes farmed-out costs and internal costs.
4) I dislike government intervention. We need a solution to re-liquidating the taxpayer investment on a reasonable timetable. It is a shame that shareholder investment won't hold out as well, but the shareholders should have removed GM's management long before this. If the government cannot get GM working, then they will certainly be removed, as well.