One of the many reasons for Ford’s surging market share are Americans who refuse to buy a car from a company that has been bailed-out with their tax dollars. In survey after survey after survey, Americans took issue with the bailouts. The backlash was so severe that one of the first measures Joel Ewanick implemented at GM was to get rid of GM. He replaced “General Motors” with “the parent company.” Smart move: You can be against Government Motors. But who dares to be against parenthood?

Ford meanwhile rode high on the perception that they didn’t accept a single dollar. “Ford did not seek a government bailout,” says a very recent Rasmussen Report,  “and 55 percent of Americans say they are more likely to buy a Ford car for that reason.”

Americans (and possibly GM and Chrysler) are the victims of a big lie, says Wall Street insider Eric Fry. And he has the numbers to back it up. Read More >

ABC reports that GM has purchased $2.1b worth of its stock from the Treasury Department, bring the government’s stake in the bailed-out automaker to 33 percent. GM’s stock price must now reach $53/share in order for the government to recoup its remaining $16.88b investment in The General. GM’s stock currently trades at around $33.70, and recent analysis from UBS shows that the company faces significant short-term challenges as an investment.

GM CEO Dan Akerson may believe that

There’s more to life than money,

but he tells the Freep that GM is running the risk of losing top managers to the competition, and must seek more flexibility on pay rules from the Treasury. Akerson wouldn’t clarify what kind of concessions he’s asking for from Treasury, but says that the risk of losing employees in the short term is very real. Meanwhile, even though the government isn’t the majority stakeholder in GM any longer, it will have to OK executive compensation packages until the bailout is paid back. Which prompts The Atlantic‘s Daniel Indiviglio to suggest

there may also be ways to structure pay to minimize cash in compensation packages. For example, if a large portion of compensation is awarded in GM stock that does not vest until the company has paid back the bailout, then this would provide additional incentive to these executives and limit their immediate cash compensation. Unfortunately, there’s no perfect solution to this problem, because the government shouldn’t be involved in the business of bailouts in the first place.

The debate over Detroit’s bailout was dominated by a narrative that portrayed the automakers as victims of Wall Street excess, and placed blame for their collapse on the frozen credit market. And though the credit crunch certainly hurt GM and Chrysler as well as their customers, Detroit was a victim of the credit crunch in the same way an addict is a victim of his dealer. By leveraging easy credit to fuel the SUV boom which covered for unprofitability in passenger cars (or didn’t, as the case may be), Detroit binged on zero-percent financing as the market road confidently to 16m annual sales. And then, finally, the music stopped and the Domestics crumpled, victims of their own greed, but with a convenient scapegoat in the hated Wall Street bankers. But if the bailout was intended to not only get GM and Chrysler back on their feet but also to prevent future collapses, there’s some troubling news in the offing: subprime auto lending is starting to roar back, and if it goes unchecked, it could reach pre-recession levels in short order…

Read More >

As of last December, GM’s pension accounts faced a $17b shortfall, raising a real concern about the long-term viability of the bailed-out automaker. With its IPO put to bed, GM is now announcing that it will pay $4b into its salaried and hourly pension accounts, and plans on adding another $2b in stock to the accounts by year’s end. That roughly approximates the $5.9b that GM will have to pay by 2013, which still leaves a $6b minimum payment due by 2014. Add that to the billions likely required by its Opel and Daewoo divisions, as well as the billions needed to pay back taxpayers, and it’s clear that GM’s dwindling cash pile still faces considerable demands. But at least the firm isn’t pretending like its pension shortfalls don’t exist.

The Korean Development Bank, which owns 17 percent of GM’s GM-Daewoo Korean subsidiary, has been rolling about a billion dollars in Daewoo’s debt over on a monthly basis for most of this year. The debt, a legacy of a $2b+ loss on currency speculation. Now, The Korea Times reports that GM-Daewoo has paid back about a billion of that mature KDB debt, as GM-Daewoo boss Mike Arcamone explains

this action reflects GM Daewoo’s strong financial performance this year enabling us to make full payment on the outstanding facility … Full repayment of the credit facility will decrease the company’s future borrowing costs

Read More >

GM’s stock may be hovering near its IPO price of $3/share, but the UAW doesn’t need much more growth to cash out with every penny it wanted from GM. The UAW’s VEBA account has banked $3.4b in stock sales so far, and Forbes reports

The VEBA will break even on its investment if it can sell the remaining 206 million shares at an average price of $36.96.

Taxpayers, meanwhile, need GM’s stock to top at least $52/share in order to break even on the bailout that it funded. Because it’s just not a bailout unless the least deserving benefit the most. Meanwhile, with its accounts once again flush with cash, the UAW is turning South in hopes of accomplishing what it has never accomplished before: unionizing at ransplant auto factory in a right-to-work, Southern state.

Read More >

Redflex shareholders on Friday approved big pay hikes for the photo enforcement firm’s top management at the annual meeting in Victoria, Australia. Redflex has cornered 44 percent of the red light camera and speed camera market in the US, although Arizona-based rival American Traffic Solutions (ATS) is catching up to its down under competitor with a 41 percent market share.

Read More >

Did you buy the GM share? If the answer is in the affirmative, then you should stop reading immediately. There are great new stories my Murilee Martin, just as a for instance.

Are we entre nous? Ok, here are the bad news: GM’s black hole in Germany, called Opel, turns out to be more humungous and more financial-matter sucking than ever imagined. Read More >

Forget about Europeans complaining about missing parts. Over in America, there is an acute car shortage. Dealers blame who they always blame: The manufacturers. “They’ve cut back production so much that we’ve run out of cars,” Boston dealer magnate Herb Chambers tells his hometown paper, the Boston Herald. He says he had to “beg, borrow and steal” Cadillacs from dealers in other parts of the country. Down at the South Shore, dealer Dan Quirk loses 60 to 90 sales a month. “The Big Three just don’t have enough manufacturing capacity any more,” kvetches Quirk. “Some of the automakers, particularly General Motors, closed a lot of their plants when the meltdown hit.” Supposedly it’s not just a Bostonian phenomenon. Supposedly. At closer look, it might be a fire breathing, rip-snorting chimera. Read More >

Abu Dhabi’s sovereign wealth fund, via its investment vehicle AMubadala Development Co, has sold back its 5 per cent stake in Ferrari to Fiat. It’s not that the sheiks were tired of Ferrari. Fiat wanted their shares back. Fiat had an option that gave it the right to buy back the stake that Mubadala had acquired in 2005 from Mediobanca, Italy’s largest investment bank for €114 million, domain-b reports.

Fiat paid €122m ($167m) to buy back the stock. Now their holdings climbed from  85 percent to 90 percent. Why would you want 90 percent in a small sports car maker if you already have 85 percent, and you need every penny of cash? Read More >

General Motors went public at $33/share today, generated huge trading volume (452m shares traded) and ended the day at $34.19. Automotive News [sub] reports that the government stake in GM “could” be as low as 33 percent post-IPO. Only five percent went to “large foreign investors,” including one percent to the Chinese bête noir SIAC, which hinted at future cooperation with The General on “exploration of overseas markets.” The only bad news? Had the Treasury sold its entire stake at the closing price today, it would have been down $9b. Now GM’s stock price needs to hit $48.58 before taxpayers make good on their investment. But with a market capitalization of about $63b, GM is at least worth more than the taxpayers put into it. Which, using a variation of Project Car Hell logic, is a real accomplishment.

Ready to buy some GM share tomorrow? A consummate insider who sits on the board of an important GM company says: Don’t.

Klaus-Franz, Chair of the Opel works council and Vice Chairman of the Opel supervisory board warns:  “The IPO is premature. Sure, GM has delivered three good quarters. But he restructuring in Europe must be finished to give investors the visibility they need.”

Franz knows the skeletons hidden in Opel’s closet. In an interview with Germany’s Focus Magazine, Franz gives valuable investment advice to potential GM shareholders. To repeat: “Don’t.” Read More >

Observers who followed China’s SAIC coveting of shares in the upcoming GM IPO (only 3 days to go!), and who hoped/feared that SAIC would buy a big chunk of GM, will be disappointed/relieved to hear that SAIC is content with a more or less symbolical 1 percent share in the General.

Reuters has it on good authority (“four people familiar with the matter”) that SAIC and GM have reached an agreement in principle that cements the 1 percent deal. The deal is contingent on Chinese government approval, but this is expected to be fast tracked and should happen today before the U.S. even gets up.

So the big Chinese buy-in is just a lot of hot air? Wait until you hear what SAIC received as a deal sweetener. Read More >