The S-Class Mercedes has been the default choice for the global taste-and-wealth set for a very long time, probably since the demise of the Elwood Engel Continental. The 7-Series BMW, by contrast, has always been a slightly embarrassing purchase, the choice of the man cut out from the classy club by birth, ignorance, or a slightly unseemly insistence on driving dynamics. BMW is the striver’s brand, launched into the spotlight by a man who was sort of the Nadia Comaneci of sweaty social climbing. Mercedes is the real thing. Hasn’t it ever been thus?
German investors, on the other hand, seem to like the Roundel.
Suzuki’s death rattle continues unabated as the company’s American distribution arm will receive $100 million in financing, half of which is earmarked to purchase inventory from parent company Suzuki Motor Corp.
In the end, the money that towns across America gave General Motors did not matter… G.M. walked away and, thanks to a federal bailout, is once again profitable. The towns have not been so fortunate, having spent scarce funds in exchange for thousands of jobs that no longer exist.
The government of Ontario is calling on the Canadian government to sell off its shares in GM, obtained as part of a bailout package for the automaker in 2009.
Bailed-out GM agreed to pay about $4.2 billion for the European and Latin American operations of likewise bailed-out Ally Financial, formerly known as GMAC. Read More >
Aston Martin’s Kuwaiti owners are apparently looking to unload their majority stake in the English sports car maker, but proceedings have been slow to due Investment Dar Co.’s desire to recoup their $800 million purchase price.
GM delivered its October surprise by posting what Reuters calls “a surprisingly strong profit.” In a bit of a hail Mary pass, GM said it is targeting a return to break-even levels in Europe by mid-decade. Read More >
How does the French government save an ailing car maker that employs thousands of people without actually bailing out the auto maker? By baling out their finance unit, of course!
The Voluntary Employee Beneficiary Association, or VEBA, was initiated as a way to get retiree healthcare costs off the books of Detroit’s auto makers. While VEBA makes balance sheets look better, they are still an exorbitant legacy costs for the Big Three, and things are about to get a lot worse.
GM’s stock is still considered a “Buy” in the eyes of much of Wall Street, but analysts say that more changes are needed to accelerate the pace of growth in the post-Bailout era.
Ferraris are expensive, Porsches (usually) less so. This is something that every kid on the street knows, right? Turns out that it is, as the song says, truer than true.
Longtime reader and new contributor Tyler Vandermeulen is a financial analyst by day. He took a deep dive into the EDGAR database to unearth how much of GM’s money flows abroad. Please welcome Tyler with the respect he deserves. Rude comments will not be tolerated.
Before the bailout of General Motors, it was well understood that the world’s largest automaker was losing huge amounts of money in the US and was staying afloat thanks to stronger performance in overseas markets. Since the bailout, however, that dynamic has been turned on its head. Thanks to a leaner manufacturing footprint, debt eliminations and steadily recovering sales, GM’s US operations have generated the lion’s share of the company’s profit since the bailout. And now, as the rest of the world economy slows, GM is spending more and more of its taxpayer-enhanced cash pile to shore up its faltering foreign divisions. In fact, according to an analysis of GM’s SEC filings, the company is likely to incur over $6.5 billion in losses and expenditures overseas in the 2011-2014 period, not counting over $1.6b in foreign potential legal liabilities or several other incalculable expenses that could add up to billions more. Not only are these expenses a challenge to GM’s overall financial health at a time when it also faces billion-dollar expenditures on pensions in the US, it shows the basic problem with national bailouts of global companies. Taxpayers who were told they were saving an American company are now seeing their tax dollars flowing overseas by the billions. Read More >
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