Continue reading Geely Purchasing Volvo from Ford

Geely Purchasing Volvo from Ford originally appeared on BloggingStocks on Mon, 29 Mar 2010 09:00:00 EST. Please see our terms for use of feeds.

General Motors Corp. (NYSE: GM) and Ford (NYSE: F) are going in front of Congress today to ask for $25 billion worth of taxpayer money. (It seems they won't be flying in separate private jets.) GM will announce a reopening of its UAW contract and the winding down of its Hummer, Pontiac, Saab and Saturn brands. Ford will try to sell Volvo to the Swedish government. What's lacking from both plans at this stage is enough detail about cost savings to know whether taxpayers will get their money back.

As I posted, there is a $16 billion (in cost savings) six point restructuring plan which GM could have used, but it chose a different path. The six-point plan involved closing or selling the four brands and their related dealerships. GM's plan proposes to slowly wind down these brands and keep the dealers. It has been trying to sell Saab but no takers have emerged.

Moreover, GM workers remain higher paid than workers of its Japanese competitors. For example, UAW workers make an average of $76 an hour, including the cost of retiree benefits. Toyota Motor Co. (NYSE: TM) workers cost, all in, about $18 an hour less. It is unclear how much GM plans to cut from UAW pay by reopening the contract. Absent more details, today's GM restructuring plan does not provide a clear path to profitability.

Continue reading GM and Ford ready weak pitches for taxpayer bucks

GM and Ford ready weak pitches for taxpayer bucks originally appeared on BloggingStocks on Tue, 02 Dec 2008 09:40:00 EST. Please see our terms for use of feeds.

"Rapidly rising commodity prices -- particularly steel prices -- and higher gasoline prices that are accelerating consumers' shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009," said Mark Fields, Ford's President of The Americas.

"Unless there is a fairly rapid turnaround in U.S. business conditions, which we are not anticipating, it now looks like it will take longer than expected to achieve our North American Automotive profitability goal," Mulally said.

Continue reading Ford (F) plunging 7%: No profit expected in 2009

Ford (F) plunging 7%: No profit expected in 2009 originally appeared on BloggingStocks on Thu, 22 May 2008 11:45:00 EST. Please see our terms for use of feeds.

Ford Motor Co. (NYSE: F) is cutting production at its Volvo unit, according to The Wall Street Journal. The move, which could affect one-third of workers -- some 700 -- is seen as an attempt to cut the costs and losses at the upscale Swedish brand.

The question everyone is asking is whether this move is done in preparation for a sale. According to "people familiar with the matter" who discussed such things with the Journal, CEO Alan Mulally is interested in putting Volvo, whose sales have been declining, on the block. Of course, to analysts, Mulally sang a different tune last month, saying the priority is improve the Swedish auto maker operations "dramatically."

As Kirk Kerkorian's Tracinda Corp. continues to build its stake int he company, he may also have a thing or two to say on the matter.

For now, Volvo is cutting where it makes larger, less popular vehicles, and it plans to make fewer cars overall. But can this make Volvo more profitable for Ford, or at least more attractive to buyers? There are costs associated with producing a smaller number of vehicles, but with Volvo reporting 22,000 fewer vehicles sold during the first quarter, cutting production makes sense. Another matter Ford has to consider is the massive losses it suffered lately just from the kronor-dollar exchange rate.

Continue reading If Ford wants to sell Volvo, who would buy it?

If Ford wants to sell Volvo, who would buy it? originally appeared on BloggingStocks on Tue, 20 May 2008 14:19:00 EST. Please see our terms for use of feeds.

Ford finding success in RVs originally appeared on BloggingStocks on Mon, 26 Nov 2007 14:26:00 EST. Please see our terms for use of feeds.

Ford revival 'on track,' according to CEO Mulally originally appeared on BloggingStocks on Tue, 26 Jun 2007 16:20:00 EST. Please see our terms for use of feeds.

Brent Wilsey, a registered investment advisor, operates Wilsey Asset Management. One sector he focuses on is autos. Here's an interview with BloggingStocks.com:

What do you think of the new leadership at Ford?

I hope for the best but fear the worst. Mr. Alan Mulally from Boeing has a very good track record, but at Boeing they had one competitor, Airbus, now he faces the forces of Toyota and Honda just to name a few. Look at how strong the Korean car makers have come on. And, in the years to come, we will see cars from China as well. I'm afraid this will give the stock a short term increase, but after the excitement dies down and investors realize it will take years to turn this company around -- not days -- the stock will probably fall again.

There are rumors that Ford may go private. What's your take?

Ford currently has $153 billion in debt. So, to take this company private would make little sense. After all, with the current value of the shares outstanding at $16 billion, why spend $16 billion to take on $150 billion in debt? The company is currently losing money along with market share.

Of course, there has been a shift in the auto industry over the years. Toyota and Honda have come here to the US to build better cars for less. It also helps that they don't have the heavy labor contracts.

BloggingStocks Interview: Ford to go private? originally appeared on BloggingStocks on Wed, 06 Sep 2006 14:32:00 EST. Please see our terms for use of feeds.