Angus MacKenzie did everything but call TTAC by name in his essay GM Shares Tumble. So What? Yes, the Motor Trend scribe can “almost hear the Detroit death-watchers rubbing their hands with glee” at the news of GM's stock hitting two-year lows. It's true. Every time GM's share price dips, we light giant cigars, twirl our collective mustache and laugh maniacally. That Mr. MacKenzie sees critical coverage of the auto industry as journalistic schadenfreude goes some ways towards explaining Motor Trend’s increasingly toothless car reviews. But how can MacKenzie, an experienced car hack, justify pinning Detroit’s woes on anyone other than, well, Detroit? Hey, a man’s gotta eat.
What prompted GM's share price slump, said analysts, was a drop in the overall auto market, and worries about future profits in light of disappointing February sales… What the analysts really meant was Wall Street's money men don't think GM's a good bet for making them a quick buck right now. And if the money men don't think a company can make them a quick buck, then it's basically worthless.
This kind of rhetoric– references to unnamed, evil “money men”– smacks of Ye Olde International Jewish banking conspiracy. As populist as such a sentiment may be, it’s unconscionable for a responsible journalist to perpetuate such a well-worn shibboleth.
More to the point, MacKenzie is dead wrong. The short-term thinking that caused GM's stock price to head for the basement came from RenCen— not Wall Street. Nobody from the financial community forced General Motors to squander billions on misbegotten foreign alliances, or destroy its brands, or capitulate to union demands. Nobody told GM’s management to buy Saab and Hummer, or set-up Saturn. The end result of GM’s self-inflicted management failure is a company in deep financial crisis. This is clearly, unequivocally, completely GM’s fault.
In an era when nameless screen jockeys can move billions of dollars at the touch of a computer keyboard, Wall Street's institutionalized ADD has resulted in a feverish short-term view of the auto business. Lengthy product cycles and huge investment costs, combined with a fickle, cyclical, fashion-driven market, are just too damned difficult to deal with.
Sure. Automotive analysts like John Casesa begin looking at the car industry, get bogged down in the numbers and market cycles, throw up their hands and say, “Whoa! That’s just too damned difficult. Forgeddaboutit.” And what of all those institutional investors who’ve stood by The General for decades? In fact, GM was once known as a “blue chip stock,” held as much for its healthy dividend payments (recently halved) as its share price.
There’s one reason this is no longer true: the company’s management has run the automaker into the ground. And why’s that? According to Mr. MacKenzie, it’s all about GM’s pesky quarterly financial reports.
Maybe that's why the world's most successful automakers — Toyota, BMW and Porsche, to name three – are those that have never had to sweat a quarterly earnings call with a posse of skeptical Wall Street analysts ready to trash their stock price when they don't see the opportunity to make that quick buck.
Wrong. BMW files quarterly reports. Toyota files quarterly reports. As does every major automaker you can name save privately-held Chrysler– and we all know how well that’s going. As publicly held companies (save Porsche), ALL automakers have to face the music. Just like GM.
Never mind. MacKenzie is determined to paint GM as a victim– even if he has to undermine his own argument to do it.
Bunkie Knudsen, who ran Pontiac and Chevrolet in the '50s and '60s, reckoned it all started to go wrong when Fred Donner became president of GM in 1958. Knudsen was outraged Donner would insist on talking about GM's stock price, and what the analysts thought about it, at his daily meetings with the heads of GM's divisions. Before Donner, those meetings were mostly about making cars and trucks. After, as the financial engineers took over from the real ones, GM's cars and trucks got worse and worse.
Again, how is this Wall Street’s fault?
Bunkie Knudsen believed in a simple concept: The people in Detroit had to make good cars, and if they did, the people in New York would take care of the stock. After decades of fixating on financial engineering, GM is only now getting back to the business of making good cars. Only problem is, no one in New York seems to care anymore.
Reality check. It’s not “the money men’s” job to “care” about making good cars. That’s GM’s job. This they’ve failed to do, in spectacular fashion. MacKenzie’s finger-pointing at dark forces on Wall Street doesn’t change the fact that GM is in a hole of its own making. Their share price reflects that reality, which GM, like MacKenzie, refuse to face.
[Read MacKenzie's rant here.]
Companies that are run well deliver profits, their share value goes up, investors flock to buy.
GM was not run well. Unfortunately for GM management, there are other automakers, operating in the same period, that have been run well, whose share value has risen, and to which investors flock.
Take away the spin from GM and you are left with a shell.
My Father worked with Semon Knudsen at Cadillac from 1939 to early 1942, and maintained a friendship for 35 years. He was right.
I do worry about the mentality of the United States. Do people TRULY believe that GM’s woes are NOT its own fault?
We’ve said it for so long on TTAC, it’s hard to see how no-one else can see the problem. GM’s woes are nobody else’s fault except GM’s. Years of mismanagement with nobody being held accountable. Case in point is Rick Wagoner’s flirting with FIAT, which cost it $2 billion. Now if you or I were to cost the companies we work for 10% of that price, we’d be out of the door! Yet, GM just swept it under the carpet and no-one was held accountable.
Another GM folly was the insistence of “golden parachutes” for top management. This was a disaster from the beginning. If top management were going to walk away from GM, irrespective of whether GM succeeded or failed, with millions of dollars, where’s the incentive for them to succeed? Again, lack of accountability.
GM, despite other car companies doing the opposite, are blaming the current credit crunch for the poor performance. It never seems to be GM’s fault, yet when they deliver a meagre profit or improvement in market share, management are quick to reap the rewards. Anyone remember, GM posting a surprise sales gain in spetember 2007? Mark LaNeve said “The myth of import superiority is being destroyed”*. What about now? When GM’s market share is eroding fast? Where’s Mark LeNeve saying “GM’s in trouble and we’re responsible?”.
Toyota, with their falling quality, recently (and openly) admitted that they are going to do something about it and who said it? The CEO! Toyota knew there was a problem and they are fixing it. GM, on the other hand, have a quality perception problem, what do they do? Give longer warranties? Go on an advertising offensive? No. They whine about how it’s the “customer’s problem”.
Short term thinking, lack of direction and a toxic corporate culture is what is killing GM. Until, these problems are solved, GM won’t make the cars they need to survive.
If journalists believe that GM’s woes are the result of negative publicity from other journalists, then they are in deep trouble……
* = http://money.cnn.com/2007/09/04/news/companies/autosales/index.htm
Here is a blast from the past:
Nattering Nabobs of Negativism.
The auto companies made the mistake many years ago of managing the companies to provide for the union and their members that insisted on job security. The company is there to build product, and if you don’t build product there will be no company and no jobs.
Blame the media. Blame Wall Street. Blame everyone but the source of the problem: GM itself.
MT = More Trivia = irrelevancy
The views of “this little group of men” who “live and work in the geographical and intellectual confines of Washington, D.C., or New York City,” Agnew noted darkly, “do not represent the views of America.” He inscribed himself in history, and in famous-quotation anthologies, forever, when he said, “In the United States today, we have more than our share of nattering nabobs of negativism. They have formed their own 4-H club—the hopeless, hysterical hypochondriacs of history.”
I wonder what Agnew would have made of GM’s woes.
Excellent editorial Edward. You’ve really nailed it. In many ways the slow demise of Clueless Motors looks a lot like the path the likes of MT are on. What’s that cliche, ‘Misery loves company’ Well both GM and MT make a great team as they go down togather.
Good op-ed here. Wall Street’s obsession on the next quarter is extremely unhealthy, and has, in my opinion, brought far more bad than good to our economies.
This said, using Wall Street as a scarecrow to hide GM’s self-inflicted woes is pretty ridiculous. The proof of GM’s poor management are literally roving (or rather, rotting) in the streets.
Wall street has moved from being a meter of the economic health of companies to being a den of compulsive, short term-oriented gambling addicts, and along with WS the whole nation. That’s what got us in the current mess. But the only way it can directly affect the management of a company is if activist shareholders push for quarterly objectives at meetings as opposed to longer-term objectives. As far as I know, it really wasn’t the case for GM.
As for MT, it’s the first “buff book” I’ve stopped reading, 3 years ago.
It is kind of ironic that Angus is in a similar predicament to GM. MT hasn’t written a accurate road test since I was 7 . When I was 7 I believed everything I read.
I thought Angus was going to bring some good old British honesty to the pages of MT. Because MT has been so bad for some many years I never even bother to “flip” through it to see how Angus is doing.
MacKenzie: “After decades of fixating on financial engineering, GM is only now getting back to the business of making good cars. Only problem is, no one in New York seems to care anymore.”
Is it because financial analysts read the “books” and know GM doesn’t have the capital, low overhead or a cohesive turnaround plan (crafted by an enlightened and accountable management team) to turn this ship around?
Nah, obviously not. GM’s cars are head and shoulders ahead of their competition. It’s that Wall Street has an agenda of some sort.
As they say in the South, “That dog don’t hunt.”
Once again I am reminded of why I almost never read Motor Trend.
GM has had almost 40 years to get its…um, stuff together. Over and over again they have failed to do so. At some point, you have to stop blaming others for your problems.
Alas, My GM ‘Groundhog Day’ editorial seems to gone missing, so I cannot link to it. It chronicles how GM has repeatedly failed to focus on the business of making cars people want to purchase.
Wow, I’ve been a hardcore automotive enthusiast for two decades now and I forgot this guy even existed.
Who is this guy? Motor… what?
As an ex-dealer for 30 plus years, ttac has pegged the problems of GM better than anybody. We were one of the largest and most successful dealers in the country. And I can assure you upper management is very arrogant. They have definitely hit the iceberg and I would be very surprised to see them right the ship. Way too many brands and dealers with hardly any way to contract fast enough. thanks
I thought Angus was going to bring some good old British honesty to the pages of MT.
You don’t know much about British journalism do you?
and Angus is Australian
We looked at the G6 fliptop yesterday – I don’t think you can blame that on Wall St
Stein asks, “I wonder what Agnew would have made of GM’s woes.”
Spiro has assumed ground temperature, but we could ask the great wordsmith William Safire, who wrote those alliterative gems.
how odd – I recently did not renew my subscription to motor trend for the very reasons cited – its reviews were insipid and reeked of “they pay us, we can’t say anything bad about them”. I mean, clearly crap cars were glossed over.
Not to mention those accursed “special advertising sections” that look identical to the magazine and look like they’re supposed to be in there as articles.
Yes, I know Safire was the speechwriter – the 4H club as part of the same statement was new to me, though. I just put it in as a comment on the earlier post which had the Nattering nabobs of negativity as what I took to be criticism of TTAC.
Western companies are caught in the stock-and-tumble. Shareholders are expecting continuous gains – and management’s stock option deals ask for the same. Thus the incentive is to cut cost, spin sales and relocate activities either to outside lower-cost suppliers, or through outsourcing.
The latter reduces the workforce, but also leaves same without money with which to buy the product they are no longer making, but which management would dearly like to sell to someone.
Which means a “service industry” is suddenly invented – where no one is involved with manufacturing or engineering, and where we’re all basically just cutting one anothers’ hair.
James Dyson of Dyson vacuums has for years predicted it’s all going to crash badly and it appears as if he’s going to be able to see his critics with egg on their faces.
Management “manages” to look good for a while – products are being created, at a significantly lower cost than before, which then hides the fact that the company is not performing where it really matters, at the other end of the cycle, where value is created. You can make your numbers look good either by cutting cost, or creating value.
GM chose to cut costs, across the board, while pretending to be creating value – but customers weren’t fooled.
GM is already bankrupt, it’s just that the fact is pretty hard to swallow. They long since stopped creating value, and are reduced to sham concept vehicles and silly statements in order to try and keep the fluff in the eyes of the public and the media.
It won’t be pretty.
ANY company can cut costs. And ALL companies are concerned with costs. Toyota and Honda aggressively track costs to keep them under control. Any company that doesn’t do this will go out of business (the history of Studebaker provides a good lesson on that one).
The difference between the Japanese and GM has been that the Japanese have attacked costs by becoming more efficient, and then using the efficiency gains to improve the product. The product comes first (and, people will pay more for a superior product, which boosts profits).
GM has historically cut costs without putting them back into the product. Cost cuts are used to please investors. Hence, cost-cutting becomes synonomous with cheapening the product.
(Although, given the difference in stock price between GM and Toyota, one wonders if investors are really governed by the short-term. Sometimes I wonder if all of the talk about Wall Street isn’t generated by management themselves, because they don’t really know about the product, but do know how to cut, cut, cut.)
As for Motor Trend – I enjoy some of their road tests, but I’ve noticed that they seem to be going very soft on GM lately (and have been hard on Ford, so it can’t be a pro-Detroit bias). I had to laugh when the magazine said that the new Saturn Aura was a sales success…by what standard?!
MacKenzie may be blaming the money men, but Bloomberg reports that GM’s new COO knows what’s what (if now how to make it happen). “We’ve got to execute our plan,” Henderson said. “We’ve got to take care of business, get the business turned around, we’ve got to grow in emerging markets, do the fundamentals of our business, use our liquidity position to finance the turnaround. Then the investors will assign value to our stock.”
“We’ve got to execute our plan,” Henderson said. “We’ve got to take care of business, get the business turned around, we’ve got to grow in emerging markets, do the fundamentals of our business, use our liquidity position to finance the turnaround. Then the investors will assign value to our stock.”
Thank you Captain Obvious.
Aside from him stating the obvious, it flies in the face of the MT rant. ;-)
MacKenzie isn’t entirely wrong here. Random walk theory is based upon the premise that short-term price movements are not necessarily predictable or indicative of long-term trends. A stock can lose or gain value on a given day, without it necessarily meaning very much. In that sense, he has a point.
And the corporate quest for short-term earnings is also problematic for companies such as GM, that seem more interesting in posting quarterly results that appease the analysts than they are in making good products.
I suppose the question comes down to who you blame the most for this fixation on quarterly results. It’s easy to say that the company execs should grow a pair and stick to long-term planning, but when you have Wall Street constantly assessing your every price movement, that can be difficult.
That being said, GM dug its own grave and now it has to circle it, if not lie in it. As Geeber rightly pointed out, they attempted to prop themselves up through constant cost cutting, rather than through increased efficiencies, which was a strategy that was doomed to fail. It has long been a poorly managed business with no apparent interest in its own long-term success, and that’s at least as much a byproduct of its own dysfunctional culture as it is of the quarterly earnings reports.
I guess the biggest thing GM has is getting a grasp on the concept of building a quality product AND taking care of your customers like Toyota and Honda has. Do things the right way and quarterly results aren’t painful to look at.
Detroit is heavily exposed to the credit crunch. GM holds a lot of debt and has virtually no prospect of turning a profit this year. This is why their stock is tumbling. They are a serious bankruptcy risk in the short-term because they will have trouble raising cash if things get worse than expected. They know this. Wall Street knows this.
The cash situation is worse over at Ford, but at least they are making necessery changes to company culture. GM doesn’t want to change itself, so it keeps selling kerosene lamps in an CFL world.
This is what happens when you rely on MBAs to run your business. They chase dollars instead of their passion and destroy the very thing they’re running in the process.
Mulally is an engineer, a good sign.
I don’t know about you guys, but in the last few days, I have lost a lot of money on the stock market and I don’t own GM.
The low GM stock price is not all about GM. It is mostly about GM, but not completely. It is not GM that is causing the fall of the dollar resulting in the price of gasloine to go up. It IS GM that cannot provide a profitable small car that gets decent gas milage. It is GM that is trying to increase the sales of cars in China and India, which is also driving the price up.
In Death Watch 250 or there abouts, I expect the editorial to be about the move of GM Headquarters to Singapore so it will be closer to its largest markets. (Would save a ton of money not having to abide by US labor, environmental and tax laws, too. Might actually be able to save the company and retunr to profitability in the US)
Simple as this. His salary and his management’s salaries and perks they get from the Detroit Automakers relies very heavily on advertising dollars as MT no longer is a viable subscription for its content – but a collection of automobile and lifestyle related advertisements.
Everytime I read his reviews – I think of the 100% Angus stamp – and that fact that the review is less about the truth but rather what GM or Ford or Chrysler want him to say. Here’s a hard truth MT is still in denial including Angus – the Truth Hurts and GM and MT want to completely ignore it like they have had for decades. I cancelled my subscription to MT 7 years ago and never looked back due to poor writing (COTY awards for hacks and crap).
Angus MacKenzie is simply acting the way any normal paid sycophant would upon realizing that his meal ticket is about to disappear.
I grow so sick and tired of inane rants from people like Angus MacKenzie blaming every economic woe on ‘Wall Street’ as though there is some small, sinister group of investors ruining the country and fine, well-run organizations like GM. I’m a registered securities representative so I spend plenty of time researching the market and specific companies. The majority of trading is done either by individual investors or by investment companies (mutual funds etc.) on behalf of investors. You and me and your neighbors and everyone else in this country (and yes, the world) determine share prices. Yes, these values can be shortsighted. But to insinuate that there is some small coven running the market is insane.
By what logic should investors buy GM stock? It’s market share and market cap have been shrinking. It carries unbelievable liabilities for decades into the future. As these liabilities continue to grow and it’s creditworthiness continues to decline GM is going to be forced to pay more and more to borrow money, undoubtedly adding to these liabilities. GM has not released any kind of detailed turnaround plan. GM has already divested itself of virtually every valuable non-core asset it had. Are we really to ignore all of this because the CTS, Malibu, and Lambda SUVs are competitive products? I would guess that a significant reason that GM shares are as high as they are is that many expect a government bailout of GM in the event of bankruptcy.
The market is comprised of millions of investors. They determine share prices, and demagoguery suggesting otherwise is silly. If Angus has a problem with the market price of GM, he is welcome to tilt at that windmill; we can, however, laugh at him as he does it.
I used to own stock of the big three and sold it all a few years ago. The long term prospects just werent any good. You cant keep shrinking your business and grow earnings, only slow the bleeding. Airlines are another business I would not touch. Im not a stock trader, but long term investor.
Other Dow 30 stocks I own are Bank of America, Boeing, Chevron and GE. Short term ups and downs dont bother me if the long term growth in earnings is there. Boeing makes airplanes that customers want. Profits dont come in for years after the sale is made, only upon delivery, but Wall Street understands that and the stock price goes up each time orders are announced. Future earnings do count.
For what it’s worth, as of this writing, GM’s stock is up about 6.5% from yesterday’s close.
Again, it doesn’t mean much. The Dow is up about 2.5%. Hell, Bear Stearns is up 33%. Happy days are here again, until the next down day.
The Big Lie here is that the business press attempts to explain daily price movements, when they are generally inexplicable, and when neither the media nor anyone else really knows why they occurred.
It’s tough for the wire services or the Wall Street Journal to provide honest headlines along the lines of “DOW UP 1% — WE HAVEN’T GOT A CLUE WHY” or “S&P DOWN 30 POINTS — DAMNED IF WE KNOW HOW THAT HAPPENED”, as those wouldn’t sell many papers. They create the illusion that they have the pulse of the market, when much of the time, it’s just a writer scrambling for copy, trying to make a deadline.
I’m not sure which bothers me more, MacKenzie’s ass-licking editorial, or the fawning comments Motor Trend’s readers posted in response. No one, so far, has pointed out GM’s 50-year history of building crap cars. When GM has tried to respond to the market they have given us the Corvair, the Vega, the Cimarron, the Fiero etc. GM created Saturn to be an import fighter, and then they turned into a badge-engineered importer.
Keep in mind that McKenzie’s M.O. is to coddle his magazine’s advertisers; trashing GM won’t help them bring in revenue for good ol’ Petersen Publishing – an ironic twist on financial motivation. It also would prevent them from having new Z06’s to check out of their California la-la land garage (a far cry from the reality that is Detroit) to play with.
Dear Ed, Some of the folks on this thread are so wired in I find it thrilling. I was born to a Studebaker dealer and generally don`t care for sports so this site is the best learning/hobby activity I have going on!
Thanks Everybody, John
I don’t know about you guys, but in the last few days, I have lost a lot of money on the stock market and I don’t own GM.
I hope you weren’t listen to Jim Cramer?
Jim,3/11/08: you would be silly to sell your Bear Sterns stock (at $60 a share)
3/16/08 JPMorganChase buys the wreck for $2 a share
If it comes to bailouts GM, Ford & Chrysler are near the back of a long Queue.
I thought it should be the other way around. When stock price drops, the shareholders should blame the company.
I mean, if GM is indeed a great company, and it’s only the short-sighted, biased, or just plain evil investors/short-sellers selling off the GM stock, there is a very simple way to counter: share buyback.
If GM made better cars, their analyst calls would be far more pleasant.
5 years ago GM sold for $35/share. In the interim, they’ve been as high as $53, back sometime between ’03 and ’04 Currently they are just a bit under $19.
5 years ago, Toyota sold for $44/share. They’ve been as high as $134 between ’06 and ’07. Now they are at $102.
Honda, 5 years ago, sold for $16/share. High $39 sometime between ’06 and ’07. Present, just under $28.
I didn’t look to see if there had been any splits during the past 5 years.
It appears that “the street” values both TM and HMC more than GM. Also both Toy and Hon are selling for more now than 5 years ago. Finally, GM’s slide started a few years earlier than ToyHon’s.
To some extent, Angus is correct – investors value companies for their projected ability to earn money in the future. GM’s prospects don’t look too good.
Anyone know what Toyota sold for in 1962?
Just out of curiosity, can anyone here remember a time when Motor Trend had any informational value? (I’m 27, so I’m not old enough to know)
I vaguely remember that in 1995-2002 it was run by some fool named C Van Tune who refused to say one negative thing about a car, rewrote everyone’s review to sound like an ad, and ended every sentence with exclamation points. Kevin Smith took the helm in 2002 and didn’t do much to fix it, and then we got this guy in 2004.
Once again The Onion nails it…:-D…
http://www.theonion.com/content/news/gm_introduces_new_2008_line_of
Yes, I remember C Van Tune! AAARRRGGH! No MT for about 8 years, no CandD for about 3. Could not tell the paid advertisements from the paid editorials. And all my body parts are as big as they need to be, so I dont need special pills. Dont need $100 oz. “pheremone additives” for my cologne from a woman who resembles an autistic badger, and probably couldnt get laid the second week of February on Bourbon st. At 4 am.
I subscribe to Motor Trend. Not sure why; of the Car mags it is by far the most supercilious and smug. And Angus does not seem to have a clue about economics and “Wall Street.” Right now investors would love to buy a stock, any stock, that had the promise of good future earnings and sound management. When Wall Street walks away from a stock, there is generally a good reason.
The internet killed GM. We no longer had to wait for MT/C&D etc to tell how awesome everything coming out was.
Right or wrong in their opinions, the freedom of the digital page (like TTAC and Auotextremist) allowed pundits to take call out the Emperor and his lack of clothes.
On behalf of the International Jewish Banking Conspiracy (TM) I would like to apologize for driving down the price of GM stock so we could make it a secret subsidiary of Zionist Motors Limited, PLC (A imited liability subsidiary of the Jewish Bankers Int’l Conspiracy Corp.) We did this by secretly hypnotizing GM to produce inferior products and ignore market trends. Surprised that when the market is moving towards small cars GM focuses on bringing V8 RWD muscle cars from Australia? That was another of our operations. The pontiac sunfire? Designed in our labs. The Aztek? Created in an underground cave beneath Dimona in Area Nun-Bet(Area 52 for you non hebrew speakers…you didn’t think we kept the interesting stuff in Area 51, did you?). Next up…the return of the Camino….brought to you by a subsidiary of the Jewish Bankers Int’l Conspiracy Corp!
GM’s share price is slumping because more people are selling than buying.
LOL, I agree with PCH again.
Dismissing Wall Streets affect on corporate thinking altogether is wrong. It has to be kept in perspective.
I remember a while back the head of Pfizer pretty much told Wall Street to F_ off. The stock did poorly for a few years, and then it blew out when all the long term, solid business ideas like doubling R&D, started bearing fruit.
I would say that at this point, GM stockholders have little security and zero control of their investment. I would dump it too. It is clear that the Board and other “leaders” have little care for the longterm growth of the company.
Motor Trend has become a great place to price out tires, as the ads for Discount Tire and TireRack.com seem to be longer than any of the articles, road tests, comparo tests, etc. And if you want to improve your love life, well every enhancer of under the sun advertises in the back!
They need Jeremy Clarkson to spice it up a bit. Or at least break the monotony of the Tirerack ads.
Bunkie was right about one thing. CEOs who pay any attention to Wall Street except during times when the company is actually selling stock to raise capital are fools.
This is the big downside of the “pay for performance” mantra of the 1980s which came to mean “give CEOs big stock options and/or tie their pay to the stock price”.
Over the long haul the stock price reflects the real value of the business, but on a quarter by quarter basis is jumps all around in response to the whims of analysts and the games of CFOs.
Short term fluctuations in stock price should be somewhere down around #3 or 4 on a CEO’s priority list.
I’m sure that the CEOs of Toyota and Honda are aware of what the financial community is saying about their companies, but I’m also sure that they don’t make this issue their top concern.
“The Big Lie here is that the business press attempts to explain daily price movements, when they are generally inexplicable, and when neither the media nor anyone else really knows why they occurred.”
No kidding. Years ago I was at a lecture where the speaker held up a recent newspaper headline which said something like “stocks down yesterday due to investors taking profits”. He then opined that the article would have been much more interesting if it had been written the day before the market went down. Oddly enough, it might have been. Reporters are sometimes known to write two article in advance, one saying why things went well and the other saying why things went wrong. Then at the appropriate time the editor just picks which one to use!
I think Motor Trend begins to lose its credibility when one reaches the “age of reason,” say about 12-15 years old for a boy.
I too remember the magazine was better “way back when,” but then again, I was still young and impressionable.
@210delray:
I was that age when Van Tune was in charge. So you can only imagine how messed up I am.
The initials of MOtor Trend are MT because there’s nothing in it.
A pox on modern journalism that good scribes like MacKensie feel obliged to write this beetle dung
Agree with PCH and Landcrusher in general about the problems caused by obsession with quarterly reports, but as far as the big 3, I think the problem runs a lot deeper than that.
Excellent demolition job on ill-informed gibberish, Edward, thank you. People who know nothing about which they are writing should be restrained from doing so.
One minor quibble: Porsche is a publicly held company, albeit of a strange hybrid variety. It is listed on the Deutsche Borse as Porsche Automobil Holding SE. 50% of the capital is publicly quoted non-voting preferred and 50% ordinary voting shares, with the ordinaries entirely owned by the Porsche and Piech families. Of course, with the preferred being non-voting, the question of how much attention the P&P families have to pay to the holders of the ordinary is moot. Nevertheless, Porsche does report semi-annually, has a reasonably comprehensive investor relations section at the porsche.com/usa website, and holds an annual analyst conference in Stuttgart following the announcement of full-year results. Interestingly, Porsche fought a long war between 2001 and 2004 with Deutsche Borse for admission to the Prime Standard of the Frankfurt stock exchange (from the General Standard), with Deutsche Borse ultimately successful in its insistence that without quarterly reports, Porsche did not meet the investor transparency requirements of the Prime Standard.
Incidentally, Porsche shares haven’t been doing too well lately – down to E106.22 just before Easter from a high of over E180 in October (adjusted for the delisting of Porsche AG and relisting as a holding company). Reasons likely include concerns about consolidating VW, the Panamera development costs (in the high hundreds of million euros), as well as the pummeling luxury consumer cyclicals usually take in a recessionary bear market – see the share price charts for Coach and Burberry over the last year, for instance. Indeed, almost all automakers have seen their share prices suffering and in some cases collapsing – BMW, Renault, Fiat, Toyota, Honda, Ford – GM is hardly alone. But we couldn’t expect misguided crusaders like Angus MacKenzie to understand that…
Remember C. Van Tune’s Death Valley torture test and the Speed Blind tests? Those were very entertaining.
MT’s conducted a wide variety of greats tests. People canceled their subscriptions for naming the Prius the car of the year, yet today it’s such a respected and significant car today. Plus, it’s still entertaining and informative.