On Wednesday, Chrysler CEO Sergio Marchionne announced that he has designed a five-year plan for the automaker (Wall Street Journal, subscription required). Marchionne believes the restructuring will be slow initially, but should improve "significantly" next year.

We should receive the plan by the end of November, and Chrysler will start reporting its quarterly results by the end of the year. Marchionne stated, "We are going to become a normal reporter in the U.S. hopefully by the end of 2009. ... You will see numbers like you see for everyone else." One can only assume that this is one of the "whole pile of surprises" Marchionne promised back in June when Fiat took over Chrysler.

Continue reading Chrysler releases five-year plan

Chrysler releases five-year plan originally appeared on BloggingStocks on Wed, 16 Sep 2009 11:40:00 EST. Please see our terms for use of feeds.

Early this morning, the Associated Press reported that talks between Chrysler's lenders and the Treasury Department had "disintegrated." The parties were trying to lower Chrysler's $6.9 billion in secured debt, a move that many hoped would stave off bankruptcy.

It appears that the hedge funds (roughly 40 of them) that hold roughly 30% of Chrysler's debt are looking for a deal better than the one struck between the banks and the government. The four banks that hold 70% of the automaker's debt agreed to erase that debt for $2 billion -- the hedge funds want more.

Continue reading Hedge funds break off talks with Treasury Department about Chrysler debt

Hedge funds break off talks with Treasury Department about Chrysler debt originally appeared on BloggingStocks on Thu, 30 Apr 2009 08:20:00 EST. Please see our terms for use of feeds.

Toyota making dealerships green, just like some of its cars originally appeared on BloggingStocks on Mon, 19 May 2008 12:45:00 EST. Please see our terms for use of feeds.

Continue reading Toyota (TM) explores more efficient methods to build cars

Toyota (TM) explores more efficient methods to build cars originally appeared on BloggingStocks on Fri, 22 Feb 2008 12:40:00 EST. Please see our terms for use of feeds.

Continue reading General Motors (GM) (finally) planning for the future

General Motors (GM) (finally) planning for the future originally appeared on BloggingStocks on Thu, 23 Aug 2007 16:15:00 EST. Please see our terms for use of feeds.

Ford Motor Co. (NYSE:F) actually made money in the second quarter, shocking Wall Street which had expected a loss. The automaker also confirmed media reports that may sell its Jaguar and Land Rover businesses.

The company made $750 million, or 31 cents per share, compared with a loss of $317 million, or 17 cents, a year earlier, its first profitable quarter in more than two years. Revenue rose 6% to $44.2 million. Wall Street had expected Ford to lose 35 cents on revenue of $37.5 billion. Click here for the earnings release, here for the Wall Street Journal story, and here for the Bloomberg News story.

Flash: Ford earnings surprise Wall Street in a good way originally appeared on BloggingStocks on Thu, 26 Jul 2007 08:45:00 EST. Please see our terms for use of feeds.

For decades General Motors Corp. (NYSE: GM) has been losing marketshare as Toyota Motor Corp. (NYSE: TM) has been gaining it. It doesn't take a genius to realize that eventually the lines would cross. And that's what happened in the first quarter.

After decades as the world's leading automobile company, GM is now number two behind Toyota.

On a worldwide basis, Toyota made 2.367 million vehicles worldwide, while GM had expected to produce 2.335 million. In the U.S. market GM was still number one on the first quarter with 22%, Ford Motor Co. (NYSE: F) was second with 17% and Toyota's share was 16%.

As I first posted in January 2006, U.S. auto manufacturers are really finance companies that happen to sell cars. But GM is suffering from its subprime mortgage lending woes and Ford is on what appears to be a never ending downward cycle of cost cutting and market share decline.

Meanwhile, Toyota continues to grow. Its 2006 global production surged 10% to 9.018 million vehicles. The company produces cars with higher initial quality ratings than its peers', its prices are 14% higher and its costs per vehicle are $300 to $500 lower. In 2005, GM lost $2,300 on each vehicle it sold, while Toyota made $1,488.

Since I recommended Toyota on September 30, 2006 in my newsletter, the stock is up 15%. Trading at a forward P/E of 14.6, the company's earnings are forecast to grow 9% to $9.39 next year. While it may be a little pricey, it's not too late to buy it.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

Toyota outsells GM originally appeared on BloggingStocks on Tue, 24 Apr 2007 08:50:00 EST. Please see our terms for use of feeds.

DaimlerChrysler AG (NYSE:DCX) is expected to shut plants in Delaware, Michigan and Missouri as part of a massive cost-cutting program that's due to be announced today that likely will eliminate 10,000 jobs. Officials in the affected states won't be able to get the automaker to change its mind.

The Delaware plant produces models such as the Dodge Durango and Chrysler Aspen that people don't want. Workers in Michigan make 4.7 liter V-8 engines that go in slow-moving trucks and the St. Louis plant is one of three than make the Ram pickup truck, the Associated Press said.

The automaker has little choice to shut it and other plants in Michigan and St. Louis in order to slash costs so that it can compete more effectively against the Japanese. Government officials will no doubt plead their case to the automaker, dangling all sorts of tax breaks and economic-development incentives. It's a waste of time.

Chrysler lost $1.48 billion last year and revenue fell to $62.2 billion. That's a situation that can't continue.

There's little that government officials can do to save the plants other than to give the displaced workers the support that they need.

The Wilmington News-Journal points out that the plant in Delaware offered people without education, good paying jobs that enabled them to join the middle class. Those opportunities were plentiful in the automakers 20 and 30 years ago. They aren't today.

Thousands of jobs are being eliminated at Chrysler, Ford Motor Co. (NYSE:F) and General Motors Co. (NYSE:GM) I don't think that many of the affected workers will wind up earning close to the salaries that they currently get. It's a very sad situation but it's necessary for both the automakers and their long-suffering shareholders.

States can't save Chrysler plants originally appeared on BloggingStocks on Wed, 14 Feb 2007 09:10:00 EST. Please see our terms for use of feeds.