Ford’s profitability outstripped even yesterday‘s $1.37b estimate, coming in at a whopping $1.68b, as Ford made mad money in the North American market in the 3rd Quarter of this year, for a fifth consecutive profitable quarter. Global revenue was down by about $1b, but excluding Volvo from Q33 2009 results, revenue was actually up $1.7b. $1.6b of Ford’s profitability came from North America, as its most crucial market carried the company over weak overseas results. And with $900m in positive cash flow, Ford says its “automotive cash” will equal its debt by the year’s end, sooner than it had previously forecast. Ford paid of $2b of its revolving credit line last quarter, and plans to pay off the final $3.6b it owes the UAW VEBA trust in Q4. By the end of the year, Ford estimates it will have reduced its overall debt by $10.8b over the course of 2010. Hit the jump for a few key slides from Ford’s Q3 financial presentation.

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Volkswagen is rolling in money. In the first nine months, VW registered an after tax profit of more than €4b ($5.57b). No funky EBITA, no “gains before restructuring charges,” straight bankable after tax profit. That’s six times the €655m the company reported in the same period of the prior year. (While most other car makers reported hefty losses.) Read More >

It’s easy to see why Sergio is feeling mighty pleased with himself. Fiat is predicted to turn a €400 million profit this year (that’s about $556m) and Fiat is expanding in Brazil, a huge car market. So can some of this good fortune rub off onto Chrysler? Possibly 35 percent of it can, if Sergio has his way.

The Freep reports that Sergio Marchionne, CEO of Fiat and Chrysler, has told analysts that Fiat is planning to raise its stake in Chrysler from 20 percent to 35 percent by the end of next year “barring unforeseen circumstances”. A big vote of confidence, indeed. When Fiat took its initial stake in Chrysler, it was given the option to increase its stake by 5 percent tranches, provided it could meet certain goals. Read More >

GM is the market leader in the United States. Volkswagen has Europe. Toyota has Australia and Japan. Fiat has…. Brazil? That’s right. Fiat is the number one in Brazil. Brazilians do love a good Fiat. But with Volkswagen’s global ambitions, that number one position in Brazil isn’t safe for Fiat. Volkswagen is number 2 there and if it one thing Volkswagen doesn’t like, it’s playing second fiddle. This is why Fiat is going on the offensive. Read More >

For a while, TTAC has been tracking a strange story: Instead of exporting cars, Japanese carmakers (or should we call them factorymakers?) increasingly resort to exporting car factories. The higher and higher yen makes exports prohibitively expensive. On the other hand, a higher and higher yen buys more and more production capacity abroad. From Nissan to Mitsubishi, there is a chorus that sings the song that suddenly, people in low wage countries can make high quality cars.  Now nobody would assume that Japanese carmakers plan a wholesale desertion of the land of Nippon, right?  Wrong.

Today, we find an odd statement in The Nikkei [sub]: Toyota denies that they will leave Japan. At least not now … Read More >

There  are increasing possibilities that GM will be owned by two governments: The American and the Chinese. After a lot of rumor and innuendo, Hu Maoyuan, Chairman of China’s government-backed SAIC went on record today and said he does not rule out the possibility of participating in GM’s IPO. That according to Reuters. Read More >

When GM went on the begging tour around Europe, they had dire projections. They expected a loss of $1.7b or thereabouts for 2009. Can’t have such bad news before an IPO. And imagine the elation when the big bottom line was drawn under the books of the 2009 fiscal – and Opel had lost only $600m. Who dunnit? Read More >

With some 17.5 percent of GM owned by the UAW’s VEBA trust, workers have been finding that their union has a hard time juggling its ownership and union responsibilities. And since workers have no real recourse against their union, GM is giving them the opportunity to profit from their sacrifices… and pay back taxpayers in the process. Automotive News [sub] reports that

GM is offering [a directed] share program as part of an IPO scheduled for November… giving about 600,000 employees and retirees [and dealers] in the United States and Canada the chance to buy stock in the company’s upcoming initial public offering at the IPO price.

The only downsides: you have to register by the 15th, and the minimum buy-in is “expected to be greater than $1,000.” Otherwise, getting in on the ground floor of GM’s IPO is a swell opportunity to keep GM’s merry-go-round spinning. Sure, the UAW VEBA fund is likely to dump all its stock at the first possible opportunity, likely driving down post-IPO values. And yes, the government will eventually have to sell off its entire stake in The General as well, meaning another 60 percent of the company’s equity will also be up for sale in the short-to-medium-term, likely depressing prices even further. Still, GM is going to need all the help it can get if it wants to be valued at or above the $50b taxpayers put into it. It’s time for the employees, retirees and fanboys to step up, put their money where their pro-bailout rhetoric is, and take their beloved company off the taxpayers’ hands.

As GM’s IPO draws closer, GM (and the government) is doing everything they can to make GM as attractive as possible to the market. The Freep reports that GM is promoting the Volt as much as they can to highlight how much GM has changed. Unfortunately, all it takes is one pesky credit rating agency to undo all that hard work. Read More >

Bloomberg reports that the credit rating firm Fitch Ratings has given GM a BB- credit default rating, the same as Ford Motor Credit. The difference: Ford has over $20b in debt, while GM is sitting on less debt and more cash. So why the identical rating? Fitch’s Stephen Brown explains:

Although they have similar ratings, you sort of get to them from different paths. GM doesn’t have a whole lot of debt, but they have very large pension obligations. Ford’s pension obligations are significant, but they’re lower than GM’s by quite a bit. But Ford has a lot of debt.

At the end of the first half of 2010, GM had $32b in cash and $8b in debt, while Ford had $22b in cash and $27b in debt. GM’s pensions, on the other had, are underfunded to the tune of $27b, while Ford’s are underfunded by $6.1b. Analysts have consistently suggested that GM’s IPO valuation should be in the neighborhood of Ford’s $40b market cap, and an identical credit rating seems to confirm the wisdom (or at least the popularity) of the comparison. Unfortunately, a $40b GM valuation would fail TTAC’s last standard for even marginal bailout “success.” After all, if GM is worth less than the $50b taxpayers put into it, there’s going to be no chance of spinning the IPO as a success.

When a country gets desperate, it closes its borders to imports. It’s a sign of surrender: We can’t compete anymore, so let’s close the doors. Closed borders rarely create jobs. In the contrary, they drive prices up, and everybody pays. Import restrictions are the most insidious tax a country can levy on its citizens. And they readily pay for it. Trade wars are an easy sell. Especially to people who cannot balance their checkbook. The price will be paid later. Read More >

When GM was taken over by the US and Canadian governments, a lot of money was pumped into GM in order to make it a viable entity. After all, GM didn’t go into bankruptcy because it was a well run company with a tight balance sheet, excellent management and brand, spanking new factories. The more money that got pumped into GM, the more pressure is put on the IPO to generate enough money for this endeavor to break even. And according to the press, it doesn’t look like it’s going to hit its mark. Read More >

With GM repositioning its IPO to target US retail investors, we find ourselves motivated to once again sound the alarm about one of the major drains facing The General’s taxpayer-provided cash pile: the restructuring of its European Opel division. Opel slated its Antwerp, elgium plant for closure earlier this year, but at the time GM was trying to find a buyer for the plant. In May we noted that automotive overcapacity on the continent made finding a buyer for Opel Antwerp a tall order, and sure enough, Bloomberg reports that a buyer has not been found. What Bloomberg leaves out of its write-up: GM is now stuck with the €400m ($530m+) bill to pay off all those unemployed workers. A half-billion here, a half-billion there… soon you’re talking about real money.

When Alan Mulally came to FoMoCo, his strategy was simple. Quite literally. “One Ford.” Jaguar? Out. Land Rover? Out. Volvo? Out. Mercury? Out. Aston Martin? Out (but we’ll keep a small stake, just in case…). It’s all about “Ford.” And it’s worked. Ford is flying high and is closing in on GM in the US market. But there’s one thing that stops Ford flying even higher. It’s that millstone around their neck, called debt. And lots of it. About $27.3b in the most recent quarter. Some economists believe that is what is depressing Ford’s stock price. Well, it seems Mr Mulally is going to have a laser focus on this problem. Read More >

GM”s IPO scuttlebutt has been dominated in recent weeks by speculation about possible foreign “cornerstone” investors. But, according to five sources who spoke with Reuters

GM is likely to sell about 80 percent of the common shares in its IPO and more than 90 percent of the preferred shares in North America.

Yes, despite deep skepticism about the GM IPO’s appeal to retail investors, GM will sell most of its equity in North America, and it’s even splitting its share price to bring the per-stock price into retail range. Why the sudden back-away from talk of courting global investment and “cornerstone investors” from abroad? Politics, baby! With Chrysler likely to end up owned outright by Fiat, something had to be done to keep The General at least nominally American-owned. Meanwhile, in news that is sure to thrill prospective retail investors, Special Inspector General of the TARP program (SIGTARP) Neil Barofsky is investigating the IPO… and says GM’s per-share price will have to hit $133.78 (pre-split) for the Government to break even. GM’s highest-ever stock price was $94.63, and that was back in April of 2000. Are we getting excited yet, retail investors?