General Motors is about to go public again. Speculation is that the stock will be priced between $26 and $29 a share, depending on demand and how much stock is sold. Is this a good investment for the average investor?

I don't know. I haven't seen the prospectus so I can only tell you what I've read so far. Much of what you would be buying is the future, and well, that's in the future where many things can happen.

Continue reading Comfort Zone Investing: Should You Buy GM?

Comfort Zone Investing: Should You Buy GM? originally appeared on BloggingStocks on Sat, 13 Nov 2010 10:30:00 EST. Please see our terms for use of feeds.

Ford (F) stared into the abyss that was 2009 and came away from the edge unscathed. Of the three major U.S. auto manufacturers, it stayed out of bankruptcy, never borrowed money from the government, and now it's gaining market share while others continue to lose it. So is the stock a buy?

Maybe. The famous and famously wealthy investor George Soros took a large position in the stock on November 17, about 7.3 million shares. Let's say he paid the high of the day that day of $9 a share. Now the stock sells a little over $11 as this is written. Mr. Soros made 22.22% on his investment so far. Not bad for less than two months. So he's made money. The stock has not traded above $11 since 2005 and is up 327% in the past year. So is there any room left on the upside?

Continue reading Comfort Zone Investing: Time to Buy Ford?

Comfort Zone Investing: Time to Buy Ford? originally appeared on BloggingStocks on Sat, 09 Jan 2010 10:30:00 EST. Please see our terms for use of feeds.

Most car companies don't give a strong indication of their monthly sales before the figures' release date. Honda (NYSE: HMC) decided to bend that rule and talk about last month's sales, and the news was not pleasant.

According to Reuters, "Honda Motor Co's U.S. sales in January fell by a similar margin to the 35 percent drop posted in December."

It is important to remember that because the Japanese car company has so many fuel-efficient vehicles, it should do better than the Big Three. It also has a solid balance sheet, so buyers do not have to worry about whether a Chapter 11 filing will void warranties.

Continue reading Honda (HMC): A car sales canary in a coal mine

Honda (HMC): A car sales canary in a coal mine originally appeared on BloggingStocks on Mon, 02 Feb 2009 10:30:00 EST. Please see our terms for use of feeds.

Congress is not wiling to put much money into the U.S. car companies even though General Motors (NYSE: GM) and Chrysler are close to running out of money. So, it appears that they will provide a very modest amount of money and punt the problem to the next Congress. It may seem the coward's way out, but it is also the only practical solution.

According to The Wall Street Journal, late Friday, House Speaker Nancy Pelosi and the White House were "near a deal, but not 100%" on a plan to provide short-term funding for the Big Three auto makers, a senior congressional aide said.

The real trouble is deciding what comes next. With most members of Congress leaving soon for the rest of the year and those who were not re-elected gone of good, solving the complex funding issues cannot be done in a few days.

There is still no plan in place for what happens to The Big Three long term. Resolving that could take several months. Will they be put through prepackaged bankruptcies with the government as the debt-in-possession or will they get their $34 billion with some new federal agency overseeing their restructuring?

At the end of the day, the competing needs of the car companies and the reluctance of Congress to spend tax-payer money may still sink the industry. But, this way, no one's Christmas gets ruined.

Douglas A. McIntyre is an editor at 247wallst.com.

A modest bailout for Detroit originally appeared on BloggingStocks on Sat, 06 Dec 2008 06:59:00 EST. Please see our terms for use of feeds.

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

There have been big hopes for all the nominees in this category at one time or another, but they've also suffered from questionable management moves of various sorts. So what's to root for in any of these companies?

Circuit City was founded in 1949; back then it was known as Wards Company. The big-box format and Circuit City name came as the result of a series of retail experiments, and became official in 1984. The company was listed on the New York Stock Exchange in the same year. In 1991, the company established a bank to operate its private-label credit card, and later offered a co-branded Visa. Big-box used car retailer CarMax (NYSE: KMX) was also owned by Circuit City at one point. In 2005, the company's board rejected a buyout offer; the company was worth a reported $1 billion then. The next year, Philip J. Schoonover became chairman, and ... well, the rest is history. Circuit City is now in Chapter 11.

Citigroup (NYSE: C) was formed in 1998 from one of the largest mergers in history: banking giant Citicorp and financial conglomerate Travelers Group. The company holds over 200 million customer accounts in more than 100 countries, and includes the investment services brands Smith Barney and Primerica. The company owns prominent, renowned buildings in Manhattan and Chicago, and also won naming rights to the new ball park of the New York Mets. But it was the subprime mortgage crisis that was Citigroup's undoing, resulting in the need for the recent federal bailout.

Continue reading Best & Worst in Money 2008: Struggling company we're rooting for most

Best & Worst in Money 2008: Struggling company we're rooting for most originally appeared on BloggingStocks on Fri, 05 Dec 2008 10:40:00 EST. Please see our terms for use of feeds.

According to the FT, "The US United Auto Workers (UAW) union has ruled out concessions - at least for the time being - to help rescue the ailing Detroit-based car industry." Of course, the argument is deeply flawed and is the kind of logic that has helped bring the industry to its knees. Management blames labor. Labor blames management. Both blame the credit crisis. It is a neat circle which leads nowhere and does not do any of the parties any good.

Imagine being a member of Congress handing out billion of dollars that many taxpayers think should not go to an industry that has wounded itself and many economists say will not ultimately save the US car companies. If the parties who will get the benefit are fighting among themselves, the chance that a rescue can be successful is almost certain to be destroyed.

Detroit has shot itself in the foot. Now, it can move the gun to its head.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Will UAW wreck car company rescue? originally appeared on BloggingStocks on Mon, 17 Nov 2008 12:12:00 EST. Please see our terms for use of feeds.

The UAW says that troubles in the car industry are not its fault. According to the union, it was not a series of bad decisions by management either.

"This industry is in a crisis situation not of its own making," Ron Gettelfinger said in an interview Saturday afternoon with The Wall Street Journal (subscription required).

The statement is worth a bit of examination.

Gas prices have been historically low, well under $2 a gallon. The real spike is only a year old and the price per gallon is now back to $2 in many regions of the country. So, did a price pop which lasted three quarters of a year bring down The Big Three?

The other culprit Gettelfinger points to is the problems in the credit markets. Most consumers did not have trouble getting car loans as recent as this summer. Auto companies were offering zero percent financing and thousands of dollars in cash back Buying a car on credit was as easy as getting a subprime loan was three years ago.

The UAW did not ask for exorbitant wages and benefits over the last four decades. Management at the car companies did not rely on SUVs and pick-ups for profits even though they had seen the tremendous damage that the Arab Oil Embargo did to their finances in the 1970s.

In other words, no one involved in the car industry is to blame.

Douglas A. McIntyre is an editor at 24/7 Wall St.

UAW says Detroit collapse is not its fault originally appeared on BloggingStocks on Sun, 16 Nov 2008 07:06:00 EST. Please see our terms for use of feeds.

Continue reading GM or Ford bankruptcy 'is economically and psychologically unacceptable'

GM or Ford bankruptcy 'is economically and psychologically unacceptable' originally appeared on BloggingStocks on Thu, 13 Nov 2008 10:30:00 EST. Please see our terms for use of feeds.

The car manufacturers of Europe will ask for $55 billion in loan guarantees to upgrade their factories to build more fuel-efficient cars. The proposed arrangement looks a lot like the one just put together by the U.S. government and the Big Three American automakers.

According to The Wall Street Journal (subscription required), "Fiat suggested the request to European auto executives at a board meeting of ACEA, the European Auto Makers Association on Friday."

Perhaps Japanese, Chinese, and Korean car companies can call for similar help, and the value of auto loan guarantees around the world can approach $200 billion.

While governments try to bear the burden of a worldwide financial meltdown, more and more struggling industries will ask for assistance. The airline industry may be next; it's being badly hurt by high fuel prices. Food companies may want aid because of rising commodities costs. Refiners are being hurt by high oil prices and may need a hand as well.

So, the question becomes, will governments decide which industries make it?

Douglas A. McIntyre is an editor at 247wallst.com.

Now European car companies want a bailout originally appeared on BloggingStocks on Sun, 05 Oct 2008 10:40:00 EST. Please see our terms for use of feeds.

The Big Three seem to think that they are troubled money center banks. They want Washington to get them out of their financial problems. According to The Wall Street Journal, "Battered by high gasoline prices and weakened earnings, the Big Three auto makers and their suppliers are now seeking significantly more help from Washington in the form of government-backed loans than the $25 billion they had previously been authorized to receive."

While the auto companies are important to the U.S. economy, they can be "replaced." If General Motors (NYSE: GM) or Ford (NYSE: F) fail, their brands and manufacturing facilities will almost certainly be bought by an overseas car company. VW has said it would like a larger market share in the U.S. So has Nissan. Both have the balance sheet to buy assets from a failed U.S. car company.

There is a sort of cruel reality to the thought that companies considered pillars of the U.S. economy could be gone sometime soon. It is certainly an indication that manufacturing is become less and less critical to the overall GDP of America. It is also a sign the the inefficiency of Detroit's habits have finally gotten so severe that it needs to turn to the government and not the capital markets for aid.

If the car companies cannot make it and cannot raise money on their own, they should be allowed to fail. That may mean that Toyota (NYSE: TM) will become the largest seller of cars in the U.S., but there was never any rule that said bad management would continually be rewarded.

Douglas A. McIntyre is an editor at 247wallst.com.

A bail-out for Detroit? originally appeared on BloggingStocks on Sat, 23 Aug 2008 13:40:00 EST. Please see our terms for use of feeds.

Continue reading Big Three to idle pickup truck plants in January on soft sales

Big Three to idle pickup truck plants in January on soft sales originally appeared on BloggingStocks on Fri, 07 Dec 2007 12:28:00 EST. Please see our terms for use of feeds.

Continue reading What the Big Three can do now to increase mpg

What the Big Three can do now to increase mpg originally appeared on BloggingStocks on Tue, 06 Nov 2007 16:45:00 EST. Please see our terms for use of feeds.

Continue reading Ford, a symbol of America's failing auto industry

Ford, a symbol of America's failing auto industry originally appeared on BloggingStocks on Wed, 18 Jul 2007 15:55:00 EST. Please see our terms for use of feeds.

Much has been made recently of the problems DaimlerChrysler AG (NYSE:DCX) has with its Chrysler unit and the prospect that the unit may be sold.

There has been speculation that it will end up in the hands of private equity firms. Let's hope so. This may be among the best hopes for our struggling domestic auto industry.

First, some have suggested that the deal is too large for PE firms. This is just not the case. Industry experts peg the value of the deal at $60 billion, about equal to Chrysler's annual revenue.

Continue reading Private equity for Chrysler: Bring it on!

Private equity for Chrysler: Bring it on! originally appeared on BloggingStocks on Sun, 25 Feb 2007 20:45:00 EST. Please see our terms for use of feeds.

General Motors Corp. (NYSE:GM) says it has cut $9 billion in annual costs. Ford Motor Co. (NYSE:F) is working on lowering expenses by over $5 billion a year. DaimlerChrysler AG (NYSE:DCX) has sent German executives to the U.S. Chrysler Group to try to take $1,000 in expenses out of every Chrysler vehicle. Inventories for The Big Three are so high that dealers do not want to take new cars, even the 2007 models.

Now, industry analysts are worried that 2007 annual car sales could fall well below estimates from GM and Toyota Motor Corp. (NYSE:TM). The two big car companies are forecasting U.S. sales next year at 16.5 million [subscription required].

Trouble in the U.S. housing market, especially in big states like California, could cut sales to 16.2 million units, according to some industry experts. Toyota may be effected because California is a key sales territory in the U.S. The Japanese car giant, however, has the financial resources to weather the trouble.

If sales slow, the company that may be hurt the most is Ford. There is already talk of its bankruptcy. The company itself is saying its market share in the U.S. could drop as low as 14%. What if that 14% share is one of a shrinking market?

Ford execs may have to go back to the drawing board once again.

Douglas McIntyre is a partner at 24/7 Wall St.

U.S. auto sales are slowing -- did Detroit cut enough? originally appeared on BloggingStocks on Mon, 27 Nov 2006 09:05:00 EST. Please see our terms for use of feeds.

One of America's most memorable newspaper headlines -- Ford to City: Drop Dead -- appeared in the New York Daily News on October 30, 1975 when President Gerald R. Ford declined an opportunity to bail out New York City from its fiscal crisis. Today, U.S. auto industry leaders will meet with President Bush and ask for government help with their problems.

As I've noted before, in recent years U.S. automobile manufacturers have made their money on financing cars, not selling them. Competitors from Japan, such as Toyota Motor Corporation (ADR) (NYSE: TM) make cars that customers want with better gas mileage and higher quality than U.S. models. Moreover, customers are willing to pay more for Toyota's cars as TM charges 14% more on average for a vehicle than General Motors Corp. (NYSE: GM) does.

The auto manufacturers want government help with reducing health care costs and currency exchange rates. Beyond speeches, I don't know what will actually change as a result of today's meeting. Yet since Motown is generally a Democratic party stronghold, I'd be surprised if much will happen. Meanwhile, I think the U.S. automakers should devote more management time to making cars that will compete with Toyota's on fuel efficiency and quality and less time seeking government bailouts.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He has no financial interest in General Motors or Toyota.

Bush to Motown: Drop dead? originally appeared on BloggingStocks on Tue, 14 Nov 2006 10:29:00 EST. Please see our terms for use of feeds.