Analyst Upgrades

• SunTrust upgraded Lennox (LII) to buy from neutral, given signs of improved residential HVAC equipment and service demand and a bottom in commercial lines. The firm has a $55 price target on the stock.
• Cowen upgraded Universal Display (PANL) to outperform from neutral. The firm expects OLED display growth to accelerate driven by increased handset and other mobile device penetration, followed by high-end TV and lighting applications.
• Canaccord upgraded Amylin (AMLN) to hold from sell following Roche's (RHHBY) delay in its Phase 3 study for taspo, a competitor to Amylin's bydureon. The firm has an $18 target on Amylin shares.
• DiamondRock Hospitality (DRH) was upgraded to buy from hold at Citigroup.
• Public Service (PEG) was upgraded to conviction buy from buy at Goldman.
• QuinStreet (QNST) was upgraded to overweight on valuation at Thomas Weisel.

Continue reading Analyst Calls: AFFY, AMLN, CACC, LAZ, LII, NKA, NRGY, OPEN, PANL, PEG ...

Analyst Calls: AFFY, AMLN, CACC, LAZ, LII, NKA, NRGY, OPEN, PANL, PEG ... originally appeared on BloggingStocks on Mon, 21 Jun 2010 11:40:00 EST. Please see our terms for use of feeds.

Analyst upgrades:

• Pali Capital upgraded Lazard (LAZ) to buy from neutral, citing a healthy restructuring environment, improving M&A and strength in the asset management segment. The firm has a $46 target on shares.
• Baird upgraded Scansource (SCSC) to outperform from neutral, citing strength in the channel business and growth drivers from improved telephony and security. The firm has a $30 target on shares.
• Citigroup upgraded Liberty Interactive (LINTA) to buy from hold, citing the company's QVC unit's return to growth. The firm raised its target on shares to $13.25 from $12.
• Hess Corp (HES) was upgraded to overweight from equal weight at Morgan Stanley.
• Vulcan Materials (VMC) was upgraded to buy from neutral at UBS.
• Dillard's (DDS) was upgraded to buy from hold at Deutsche Bank.

Continue reading Analyst upgrades, downgrades and initiations: BRCM, D, FRED, INTC, LAZ, SCSC ...

Analyst upgrades, downgrades and initiations: BRCM, D, FRED, INTC, LAZ, SCSC ... originally appeared on BloggingStocks on Fri, 20 Nov 2009 11:40:00 EST. Please see our terms for use of feeds.

Analyst upgrades:

• Citigroup upgraded Schlumberger (NYSE: SLB) to Buy from Hold on valuation and the company's exposure to a potential upturn in international drilling. The firm raised its target on shares to $80 from $56.
• UBS upgraded Allegheny Tech (NYSE: ATI) to Buy from Neutral and raised its target to $43 from $31 and believes the end of jet engine and other destocking will result in an initial recovery into 2010, even before an order ramp into 2011.
• Merriman upgraded Acorda Therapeutics (NASDAQ: ACOR) to Buy from Neutral based on the favorable FDA panel outcome and set a $30-$33 target range on the stock. Baird upgraded Acorda to Outperform from Neutral and raised its target to $28 from $24. Following the panel review, Baird expects Amaya to be approved in 1H10 and would be buyers into the mid/high $20s.
• Chicago Bridge & Iron (NYSE: CBI) was upgraded to Buy from Neutral at Goldman.
• PG&E (NYSE: PCG) was upgraded to Buy from Neutral at UBS.
• Newfield Exploration (NYSE: NFX) was upgraded to Outperform from Market Perform at Wells Fargo.

Continue reading Analyst upgrades, downgrades and initiations: ACOR, BHI, HAL, LAZ, SLB, TRV ...

Analyst upgrades, downgrades and initiations: ACOR, BHI, HAL, LAZ, SLB, TRV ... originally appeared on BloggingStocks on Thu, 15 Oct 2009 11:30:00 EST. Please see our terms for use of feeds.

Continue reading Lazard gets an IPO all star

Lazard gets an IPO all star originally appeared on BloggingStocks on Tue, 18 Aug 2009 08:40:00 EST. Please see our terms for use of feeds.

Continue reading M&A revving for a comeback?

M&A revving for a comeback? originally appeared on BloggingStocks on Mon, 03 Aug 2009 09:20:00 EST. Please see our terms for use of feeds.

• Deutsche Bank upgraded Spartech (NYSE: SEH) to Buy from Hold as it sees further upside following the company's "strong" Q2 results. The firm raised its target on shares to $10 from $2.50.
• Oppenheimer upgraded Clorox (NYSE: CLX) to Outperform from Underperform. The firm believes the company's FY10 outlook is conservative, providing room for upside, and that the valuation is compelling at current levels. Opco set a $70 price target on the stock.
• Goldman upgraded Steel Dynamics (NASDAQ: STLD) to Buy from Neutral and raised its target to $20 from $16, citing reduced balance sheet concerns following the capital raise. Note that AK Steel (NYSE: AKS) was downgraded to Neutral from Buy.
• PG&E (NYSE: PCG) was upgraded to Buy from Hold at Citigroup.
• Pool Corp. (NASDAQ: POOL) was upgraded to Outperform from Market Perform at William Blair.
• Liberty Property Trust (NYSE: LRY) was upgraded to Outperform from Market Perform at Wachovia.

Continue reading Analyst upgrades, downgrades and initiations: CLX, ED, JBHT, HMC, PCG ...

Analyst upgrades, downgrades and initiations: CLX, ED, JBHT, HMC, PCG ... originally appeared on BloggingStocks on Fri, 12 Jun 2009 11:20:00 EST. Please see our terms for use of feeds.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

KKR sees big bucks in infrastructure originally appeared on BloggingStocks on Tue, 05 Aug 2008 11:00:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Akamai Technologies Inc. (NASDAQ: AKAM) beat estimates but shares fell to a new 52-week low.
• Amgen Inc. (NASDAQ: AMGN) posted better-than-expected Q2 results and listed its guidance.
• CBS Corp. (NYSE: CBS) issued a lackluster Q2 earnings report and will buy back shares.
• Concur Technologies Inc. (NASDAQ: CNQR) Q3 revenues spiked, and it announced a big deal.
• Eastman Kodak Co. (NYSE: EK) swung to a Q2 profit due to a tax refund, but revenue growth was minimal.
• Electronic Arts Inc. (NASDAQ: ERTS) narrowed its loss in Q1 as revenue more than doubled.
• First Solar Inc. (NASDAQ: FSLR) easily beat analysts' expectations and raised its guidance.
• General Motors Corp. (NYSE: GM) posted a bigger-than-expected Q2 loss on massive charges.
• Kellogg Co. (NYSE: K) posted solid Q2 results on price increases, and raised its guidance.
• Lazard Ltd. (NYSE: LAZ) reported healthy Q2 results on merger and restructuring deals.
• Merrill Lynch & Co. Inc. (NYSE: MER) warned of a $5.7 billion write-down in the third quarter.
• Motorola Inc. (NYSE: MOT) posted breakeven earnings while revenue fell but beat estimates.
• Office Depot Inc. (NYSE: ODP) reported a Q2 loss due to slower sales, sending shares lower.
• Siemens (NYSE: SI) said that Q3 earnings fell from a one-time gain last year.
• Sony Corp. (NYSE: SNE) Q1 profits tumbled on lower handset and flat-panel TV sales.
• Sun Microsystems (NASDAQ: JAVA) forecast a loss in this quarter due to weakness in the financial sector.
• Verizon Communications Inc. (NYSE: VZ) had better-than-expected Q2 results on growth in wireless.
• Visa Inc. (NYSE: V) reported strong Q3 results that easily beat Wall Street expectations.
• Walt Disney Co. (NYSE: DIS) posted better-than-expected Q2 profit on theme park and ESPN strength.

For more highlights from this week, see: Exxon, Starbucks, Viacom, Comcast, Sirius, Kraft and others

Upcoming quarterly reports include Archer Daniels Midland (NYSE: ADM), Procter & Gamble (NYSE: PG), Jack-in-the-Box (NYSE: JBX), Cisco (NASDAQ: CSCO), News Corp. (NYSE: NWS), Whole Foods (NASDAQ: WFMI), Sprint Nextel (NYSE: S), Time Warner (NYSE: TWX), Freddie Mac (NYSE: FRE), and Blockbuster (NYSE: BBI).

Visit AOL Money & Finance for more earnings coverage.

Earnings highlights: General Motors, Motorola, Disney, Sony, Visa, CBS and others originally appeared on BloggingStocks on Sat, 02 Aug 2008 15:40:00 EST. Please see our terms for use of feeds.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Lazard finds opportunities in this market originally appeared on BloggingStocks on Wed, 30 Jul 2008 17:55:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The stock is up 150% over the last year but with its move into the consumer marker BlackBerry maker Research in Motion Limited (NASDAQ: RIMM) is entering the fickle world of consumer trendiness, reported the Wall Street Journal's "Heard on the Street". Analysts are concerned about how big the consumer market can be for them, and then there's Apple Inc (NASDAQ: AAPL) and Nokia Corporation (NYSE: NOK) beating down the consumer path. Smart products will help, but price is an issue, and the shares could face a hard fall.
• The Wall Street Journal reported that Wachovia Corporation (NYSE: WB) acknowledged it has hired The Goldman Sachs Group Inc (NYSE: GS) to study its troubled portfolios of mortgages, a move which many believe indicates the bank is gauging the market value of the loans in order to eventually sell them.

• Lazard Ltd (NYSE: LAZ) was hired by UBS AG (NYSE: UBS) to undertake a strategic review of the Swiss bank's businesses, the New York Post learned.
• The New York Post also reported some reported turmoil at Live Nation Inc (NYSE: LYV), following the abrupt departure of the concert promoter's chairman, Michael Cohl. Employees in the unit that was led by Cohl fear that the company will lay some of them off, and CEO Michael Rapino is accused of not being strongly committed to the company's mega-deal strategy.
• The Boston Herald reported that its unions were told the newspaper will lay off 130 to 160 workers, under its new plan to outsource printing operations elsewhere in the state.

Newspaper wrap-up: UBS reportedly hires Lazard to conduct strategic review originally appeared on BloggingStocks on Wed, 25 Jun 2008 08:00:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American International Group Inc. (NYE: AIG) reported a loss of $7.8 billion but raised its dividend.
• Barr Pharmaceuticals Inc. (NYSE: BRL) missed earnings estimates and lowered its guidance.
• D.R. Horton Inc. (NYSE: DHI) posted a larger-than-expected Q2 loss on further write-downs.
• Fannie Mae (NYSE: FNM) posted its third straight quarterly loss on the continuing housing slump.
• Hansen Natural Corp. (NASDAQ: HANS) lower-than-estimated Q1 profit led shares to a 52-week low.
• Lazard Ltd. (NYSE: LAZ) net income dropped 71% on a fall-off of M&A activity and a write-down.
• MGM Mirage Inc. NYSE: MGM) Q1 profits were dragged down by decreased consumer spending.
• Pilgrims Pride Corp. (NYSE: PPC) widened its Q2 loss due to the rising cost of feed.
• Playboy Enterprises Inc. (NYSE: PLA) swung to a Q1 loss as revenue declined in all units.
• Qwest Communications (NYSE: Q) net income and revenue fell in the first quarter.
• Scotts Miracle Gro Co. (NYSE: SMG) blamed a slow start to spring for its Q2 profit decline.
• Teva Pharmaceutical Industries Inc. (NASDAQ: TEVA) posted a Q1 loss due to a charge.
• THQ Inc. (NASDAQ: THQI) posted a loss for its fourth quarter and revenues flat for the year.
• Toyota Motor Corp. (NYSE: TM) posted lower-than-expected Q4 results due to the U.S. economic slump.
• Warner Music Group Corp. (NYSE: WMG) Q2 loss widened and it suspended its quarterly dividend.

Continue reading Earnings highlights: AIG, Fannie Mae, Toyota, Warner Music, Qwest, MGM and others

Earnings highlights: AIG, Fannie Mae, Toyota, Warner Music, Qwest, MGM and others originally appeared on BloggingStocks on Sat, 10 May 2008 11:40:00 EST. Please see our terms for use of feeds.

Despite the volatility in the global financial markets, Lazard Ltd. (NYSE: LAZ) has held up nicely. But according to its Q1 report, there are now signs of weakness.

Net income came to $7.8 million, or $0.14 per share, which was a 71% drop from the same period a year ago. A big culprit was the fall-off in M&A activity. Such revenues dropped 15% to $166 million.

Another issue was the corporate debt portfolio, which sustained a $28.5 million write-down. However, compared to other investment banks, this does look fairly minor. What's more, Lazard has been taking actions to improve things.

Interestingly enough, Lazard has snagged some plum advisory assignments on large capital infusions -- such as from sovereign wealth funds -- for financial institutions. This is a business that should continue to grow. And with Lazard's focus on advisory services, the firm should be in a nice position to be a major player in the space.

But in today's trading, Lazard's shares are down 2.59% to $36.53.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Lazard drops a notch originally appeared on BloggingStocks on Tue, 06 May 2008 16:10:00 EST. Please see our terms for use of feeds.

Joseph Perella is an uber investment banker. He has structured a variety of multi-billion dollar deals and has worked for firms like Morgan Stanley (NYSE: MS).

Then, back in June 2006, Perella created a new investment bank, Perella Weinberg Partners. In fact, he raised a cool $1 billion for the venture. The vision: to provide unbiased advice on major transactions.

But, with the slowdown in Wall Street dealmaking, is Perella Weinberg in trouble? Well, according to a piece in Reuters, things may actually be OK.

After all, since Perella Weinberg is a pure advisor, there is no need to deal with credit risk from financing deals. Also, the firm hasn't been focused on private equity deals. Instead, the firm's kind of high-end advice is primarily for strategic buyers. Keep in mind that other boutiques -- such as Lazard (NYSE: LAZ) -- have fared well.

What's more, Perella Weinberg knows how to be creative, providing advice that goes beyond pure M&A deals. For example, the firm has advised the New York insurance regulators for bond insurers as well as the sovereign wealth investments for Merrill Lynch (NYSE: MER). And with the complexities of the current financial environment, I'm sure Perella Weinberg will have no shortgage of problems to solve.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Perella sees some silver linings for investment banks originally appeared on BloggingStocks on Mon, 07 Apr 2008 12:58:00 EST. Please see our terms for use of feeds.

Fortune (which shares parent Time Warner (NYSE: TWX) with BloggingStocks) provides at least two examples which raise questions about whether Apple Inc. (NASDAQ: AAPL) CEO Steve Jobs pushed the Apple board into violating the law.

Two revelations in the article -- that Apple's board decided not to disclose Jobs's pancreatic cancer, for which he delayed surgery because he wanted to try a diet cure, and that Jobs set a backdated options date of January 16, 2001 which the board rubber-stamped, giving recipients a profit of either $1.6 million or $3.9 million -- make me wonder whether Jobs convinced Apple's board to break the law.

As I posted in 2006, Lazard, Ltd.'s (NYSE: LAZ) board may have failed to disclose the illness of its CEO, Bruce Wasserstein, when reports surfaced that he was out of the office with a heart ailment. A lawyer I spoke with said that if a CEO is unable to do his or her job due to illness, the board must disclose it. If Jobs's pancreatic cancer surgery kept him away from doing the CEO's job, how did Apple's lawyers defend the failure to disclose? It surely couldn't have been the lack of materiality -- some estimated that if his illness had been disclosed, Apple stock would have lost 20% of its value.

Continue reading Did Steve Jobs push the Apple board to break the law?

Did Steve Jobs push the Apple board to break the law? originally appeared on BloggingStocks on Wed, 05 Mar 2008 12:12:00 EST. Please see our terms for use of feeds.

The earnings crunch is in full swing, and here are a few of the highlights of this past week's earnings coverage from BloggingStocks:

• Allegheny Technologies Inc. (NYSE: ATI) posted lower fourth-quarter profits but record full-year sales.
• Amazon.com Inc. (NASDAQ: AMZN) posted strong results and offered bullish guidance (see transcript).
• Concur Technologies Inc. (NASDAQ: CNQR) revenue soared and it offered revised guidance.
• Countrywide Financial Corp. (NYSE: CFC) posted a bigger-than-expected loss for the fourth-quarter.
• Eli Lilly & Co. (NYSE: LLY) beat earnings expectations but fell short of revenue estimates.
• EMC Corp. (NYSE: EMC) beat estimates but shares were dragged down by VMware results.
• Google Inc. (NASDAQ: GOOG) shocked investors and missed earnings expectations (see transcript).
• Intuitive Surgical Inc. (NASDAQ: ISRG) beat estimates as revenue soared.
• Lazard Ltd. (NYSE: LAZ) sidestepped the subprime mess and fourth-quarter earnings soared.
• MBIA Inc. (NYSE: MBI) reported a $2.3 million loss due to mortgage write downs.
• Merck & Co. (NYSE: MRK) posted a $1.6 million loss and lowered its full-year guidance.
• Monster Worldwide Inc. (NASDAQ: MNST) posted strong results despite weakness in North America.
• ScanSource Inc. (NASDAQ: SCSC) beat earnings estimates but matched revenue forecasts.
• Somanetics Corp. (NASDAQ: SMTS) beat estimates and offered revised guidance.
• Symantec Corp. (NASDAQ: SYMC) beat expectations on revenue growth from overseas.
• UBS (NYSE: UBS) reported a record loss for the fourth quarter due to the subprime crisis.
• VMware Inc. (NYSE: VMW) missed revenue forecasts, sending shares tumbling.
• Yahoo! Inc. (NASDAQ: YHOO) posted unimpressive results, but beat earnings expectations (see transcript).

For additional BloggingStocks earnings highlights, see Exxon, Boeing, Halliburton, Sony, UPS, Honda, and others and McDonald's, Kraft, P&G, Verizon, MasterCard, 3M, and others.

Continue reading Earnings highlights: Yahoo!, Google, Amazon, Countrywide, Merck, UBS and others

Earnings highlights: Yahoo!, Google, Amazon, Countrywide, Merck, UBS and others originally appeared on BloggingStocks on Sat, 02 Feb 2008 09:10:00 EST. Please see our terms for use of feeds.

Bruce Wasserstein's New York Magazine published a list of Wall Street titans who have seen their personal net worth decline in the last year. One name was conspicuously absent from that list: Bruce Wasserstein, who would rank second on the list of biggest losers if he not decided to exclude himself from his own publication. This type of omission has a proud history, as I have never seen Steve Forbes's name on his magazine's rich list.

Nevertheless, here are the top three biggest losers when Wasserstein's name is added accompanied by the amount they have lost:

• The Bear Stearns Companies (NYSE: BSC) former CEO James Cayne saw his net worth plummet $467 million
• Lazard Ltd.'s (NYSE: LAZ) CEO Bruce Wasserstein's net worth has fallen fallen $260 million. (This is calculated by multiplying Wasserstein's 11,394,504 shares by Lazard's stock tumble -- from its May 2007 high of $56.90 to January 24, 2008's $34.09); and
• The Goldman Sachs Group's (NYSE: GS) CEO Lloyd Blankfein has suffered a $100 million decline.

It's nice to own the means of production over at New York Magazine -- and that ownership clearly influences what it chooses not to publish.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Is Lazard's Bruce Wasserstein one of Wall Street's biggest losers? originally appeared on BloggingStocks on Fri, 01 Feb 2008 13:55:00 EST. Please see our terms for use of feeds.

The fourth quarter was brutal for investment banks. But for Lazard Ltd. (NYSE: LAZ), things weren't so bad. After all, the company focuses on corporate advisory, and as a result didn't get dinged by principal trading and investments in subprime deals.

In Q4, Lazard's earnings spiked 43% to $122.6 million, or $0.104 per share. Revenues were up 26% to $618 million.

The main boost came from advisory fees, such as for M&A transactions and restructurings. This business increased 27% to $313.6 million in revenues. Oh, and restructuring revenues were up 58% to $32.3 million. In light of the wreckage in the market, I suspect that this segment will continue to thrive.

Of course, a key to the success is Bruce Wasserstein, who is Lazard's CEO and uber dealmaker. For his efforts, he got a hefty $96.3 million restricted stock grant as well as a five-year employment agreement.

However, with the credit crunch and economic uncertainty, the M&A market has been fairly soft in January. If this continues, Lazard will certainly feel some pain.

But in today's trading, Lazard's stock was up 4.46% to $37.25.

Tom Taulli is the author of various books, including The Complete M&A Handbook. He also operates DealProfiles.com.

Lazard: Bruce Almighty originally appeared on BloggingStocks on Wed, 30 Jan 2008 15:17:00 EST. Please see our terms for use of feeds.

FT.com reports that last Thursday my brother William D. Cohan's The Last Tycoons beat out Alan Greenspan's The Age of Turbulence to win the 2007 Financial Times and Goldman Sachs Business Book of the Year Award.

Reportedly Greenspan had his public relations firm arrange for him to fly to London on a private jet and to have a limousine at his disposal. At the last minute Greenspan canceled his trip to London but not without preparing a video of his acceptance speech. Alas poor Alan -- his video was for naught.

While Rachel Lomax, deputy governor of the Bank of England and one of the judges, said Greenspan's book was "source material for future historians as well as an entertaining read," The Last Tycoons was judged to have provided "the most compelling and enjoyable insight into modern business issues," in line with the official aim of the award.

Continue reading Lazard book beats out Greenspan's for 2007 FT/Goldman book award

Lazard book beats out Greenspan's for 2007 FT/Goldman book award originally appeared on BloggingStocks on Mon, 29 Oct 2007 17:10:00 EST. Please see our terms for use of feeds.

At a talk on September 20th at New York's 92nd Street Y, Lazard Ltd. (NYSE: LAZ) CEO Bruce Wasserstein took a swipe at Time Warner Inc. (NYSE: TWX), BloggingStocks' parent, for its moribund stock price. At the same time, Wasserstein patted himself on the back for taking all his chips off the table when the stock levitated above $18 following the publication of a Lazard report on Time Warner.

Lazard, which was hired by corporate raider Carl Icahn in February 2006, authored a 343 page report that argued for a breakup of Time Warner and a big stock buyback. Beyond its $5 million fee, Lazard's reward from Icahn was a bonus based on how far above $18 Time Warner stock went. Lazard's report estimated that Time Warner's breakup value ranged between $23.30 and $26.57. Following the report, Time Warner stock rose -- peaking at $22.73 on January 12, 2007 -- before declining to its current $18.99 -- about 50 cents a share above its price in February 2006.

While he claimed to like Time Warner management -- he called CEO Dick Parsons "a lovely, well-liked guy" and president Jeff Bewkes, "a highly regarded management kind of guy" -- Wasserstein blamed Time Warner's moribund stock price on their decision not to follow the recommendations in his report. Wasserstein thought Time Warner took one of his ideas -- a $20 billion stock buyback (Time Warner bought back $12 billion) -- but ignored his other suggestions -- to do more spin-offs and to run AOL more effectively.

Continue reading 92nd Street Y Talk: Lazard's (LAZ) Wasserstein cashes in, disses Time Warner (TWX)

92nd Street Y Talk: Lazard's (LAZ) Wasserstein cashes in, disses Time Warner (TWX) originally appeared on BloggingStocks on Fri, 05 Oct 2007 11:35:00 EST. Please see our terms for use of feeds.

MarketWatch reports that the United Auto Workers (UAW) ended its strike against General Motors Corp. (NYSE: GM) due to a settlement reached early this morning. 74,000 production workers will return to work. GM shares are up 8% in pre-market trading. This deal will benefit the reputation of Lazard Ltd. (NYSE: LAZ) which represented the UAW.

Details have not been revealed. On the surface it appears that the UAW got something it wanted as did GM. The new four-year contract agreement gives the UAW an independent retiree health-care trust -- estimated to cost GM $51 billion. The Associated Press reports that it would also give workers bonuses and lump-sum payments. Meanwhile, GM will be able to boost its competitiveness -- getting more flexibility to hire new workers at lower costs -- helping to reduce what GM claims is a $25-per-hour labor cost disparity with its Japanese competitors.

The health care trust GM is establishing would pay about 70% of GM's $51 billion pension obligation, or $36 billion, into a Voluntary Employees Beneficiary Association (VEBA). The UAW would manage the VEBA for 340,000 GM hourly retirees and spouses. If the VEBA's investments appreciate enough in value, those 340,000 pensioners will have their pension obligations satisfied. If not, it will be the UAW's fault.

To reach $51 billion in, say, five years, the VEBA will need to achieve a 7.2% annual rate of return -- sounds like a profitable job for Lazard!

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. His brother, William D. Cohan, is the author of a book on Lazard, The Last Tycoons.

General Motors (GM) up 8% pre-market on news of strike ending originally appeared on BloggingStocks on Wed, 26 Sep 2007 08:40:00 EST. Please see our terms for use of feeds.