GM Death Watch

[TRS]

http://www.thetruthaboutcars.com/editorials.php

GM is up about 19% in the last couple of weeks, BUT fundamentals IMO have not changed.

http://www.thetruthaboutcars.com/editorials.php

[rffrydr]

"There is even an existing GM-Renault-Nissan program in Europe in which the three jointly produce a minivan that is sold as the Renault Traffic, the Nissan Primastra and the Opel Vivaro.

"They can do this without selling part of GM," said Schuster of J.D. Power. "There's got to be some benefit I just don't see.""


http://www.latimes.com/business/la-fi-gm7jul07,0,645948.story?coll=la-headlines-business

Now the best perfoming stock in the Dow this year BY FAR.

[HenryTo]

Latest editorial from "The Truth About Cars" on the proposed GM and Nissan deal. Please read the comments below the editorial as well:

http://www.thetruthaboutcars.com/?p=1753

[HenryTo]

Stock initially rose to as high as $30.56 before declining back to below $29. If anyone can help turn this around, it is Mr. Ghosn - but GM is no Nissan and the labor unions are no pushover. If market share continues to drop (and it showing every sign that this is the case), then the GM stock price should start tanking again very soon.
-----------------------------------------------------
Kerkorian Presses GM to Join
Alliance of Renault and Nissan

A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
June 30, 2006 12:15 p.m.

Billionaire investor Kirk Kerkorian is pressing General Motors Co. to "fully explore" joining the alliance between Renault S.A. and Nissan Motor Co., and said those auto makers are interested in expanding their partnership and buying a minority stake in GM.

Shares of GM were up $1.51, or 5.5%, at $28.95 in midday trading on the New York Stock Exchange after earlier spiking to $30.56. Tracinda Corp., Mr. Kerkorian's investment vehicle, owns 9.9% of GM's common stock.

Tracinda said it sent a letter to GM Chairman Richard Wagoner in which it proposed that GM's board of directors establish a committee to examine teaming up with Renault and Nissan, which are both run by Carlos Ghosn.

In the letter, disclosed in a regulatory filing, Tracinda said: "It is our understanding that Renault and Nissan are receptive to the concept of including General Motors in their partnership-alliance and purchasing from General Motors a significant minority interest in the company."

Tracinda said the existing French-Japanese partnership has created "tremendous engineering, manufacturing and marketing synergies, resulting in substantial benefits and cost savings to both Renault and Nissan.'' The letter added: "We believe that participating in a global partnership-alliance with Renault and Nissan could enable General Motors to realize substantial synergies and cost savings and thereby greatly benefit the company and enhance shareholder value." See the text of the letter.

The letter also indicates that Tracinda has reached out to Renault Chairman Louis Schweitzer and Mr. Ghosn, who is chief executive of both Nissan and Renault, to alert them to its contact with GM. In a separate letter advising the two of the GM correspondence, Tracinda noted that "as we recently discussed with Mr. Ghosn, Tracinda believes that General Motors, Renault and Nissan should explore a three-company, partnership-based alliance."

GM issued a three-sentence statement Friday, saying it hadn't received any "offer or proposal from Renault/Nissan with respect to its participating in the Renault/Nissan Alliance, as suggested in the 13-D Filing made today by the Tracinda Corporation. The Tracinda request will be taken under advisement by the GM board of directors. At this time, we have no further comment."

Renault and Nissan Motor are expected to make a statement later Friday, people familiar with the matter said.

Earlier this week, GM said it expects to report slumping June and July sales amid tough competition and efforts to wean itself from price wars that have hurt industry profitability.

Get alerts for breaking news -- such as Fed moves, major world events and big mergers -- delivered straight to your desktop. Alerts will appear in a small window on your screen, much like an instant-messaging window. See a sample and get more information.GM's forecast, given at the company's quarterly sales-and-marketing update for analysts and the media, underscored the challenge the company still faces in attracting customers in an era of high gasoline prices, even as the buyouts and early retirements of about 35,000 hourly workers announced Monday show some progress in its efforts to reduce costs. Demand in particular has waned for some of the larger models of pickup trucks and sport-utility vehicles, which carry hefty profit margins for Detroit's auto makers.

Earlier this year, Jerome York, the senior adviser for Mr. Kerkorian's investment in GM, took a seat on GM's board, less than a month after he prescribed a dividend cut and other tough medicine for the auto giant. Mr. York, at that time, criticized GM management for not setting clear targets in its turnaround effort, in contrast to the approach taken by Mr. Ghosn.

Mr. Ghosn, who took over Nissan in 1999 at a time when the company was near collapse, laid out in public a series of goals for returning Nissan to break-even performance, eliminating debt, and later, achieving specific profit margins. His effort is generally considered the most successful automotive turnaround of recent history, and his name has even gone through the rumor mill as a possible successor to Mr. Wagoner at the helm of GM, which reported a loss of $10.6 billion for 2005.

Write to the Online Journal's editors at newseditors@wsj.com

[rffrydr]

America's unsung hero: manufacturing.

http://economist.com/business/displaystory.cfm?story_id=7119428

[HenryTo]

http://www.autoblog.com/2006/06/21/gm-forecasts-20-percent-growth-in-china-but-chinese-competitio/

Sure, both VW and GM got a headstart ahead of the Japanese - but both the VW and GM joint ventures (VW with SAIC and FAW and GM with SAIC) with local companies are now running into a huge conflict of interest, as the local companies themselves now want to establish themselves as legitimate globally competitive companies.

Once the auto sector in China starts maturing - probably by the end of this decade - both the expertise and efficiency of the Japanese will be much more apparent - as Honda, Toyota, and Nissan will be able to produce cars in China that have succeeded everywhere else in the world. By that time, GM will be forced out from the top 3 (just like how they are faring in other developed countries - with the exception of the U.S.) and will most probably be bleeding red ink in China as well.

[rffrydr]

Lest we forget: GM is now the best performing stock of the Dow this year.

[HenryTo]

Chrysler now putting a further squeeze on both GM and F:

http://www.caranddriver.com/dailyautoinsider/11254/chrysler-to-offer-employee-discount-deals-to-all-buyers.html

[HenryTo]

Latest GM update from "The Truth About Cars." GM continues to be a shrinking shell of its former self - and is quickly running out of liquidity. It is now effectively out of the Japanese market - and its Chinese business is also now being squeezed.

http://www.thetruthaboutcars.com/?p=1701

[HenryTo]

Tales from the dark side. More signs that the GM 2007 SUV lineup will be a failure:

http://cnn.edmunds.com/advice/specialreports/articles/115584/article.html

[HenryTo]

The final insult for GM. In the meantime, the overcapacity in auto manufacturing in China will continue to squeeze GM's bottom line in the Middle Kingdom:
--------------------------------------------------------------------------------
Japanese Dealers Cut Number of GM Sales
Friday June 9, 8:10 am ET
Japanese Imported-Car Dealer Slashing Number of Stores Selling GM

TOKYO (AP) -- Yanase & Co., a Japanese chain that sells imported autos, is slashing the number of dealerships handling General Motors vehicles, which have long been unpopular in Japan.
Yanase sells GM vehicles at 26 of the nearly 160 stores it operates in Japan. It has not yet decided how many it will keep to sell GM autos, including Cadillac and Hummer models, Yanase spokesman Kazuya Fukushiro said Friday.

As part of its turnaround efforts, General Motors Corp., the world's biggest automaker, has been reshaping its global operations. Last month, the Detroit-based automaker said it will stop selling Opel models in Japan, although it will continue to sell Cadillacs, Hummers and Corvettes.

Yanase said it will switch GM showrooms to showrooms selling DaimlerChrysler AG's Mercedes-Benz models, which continue to be popular in Japan among imports.

U.S. cars have long had a reputation as poorly made gas-guzzlers in Japan, home to leading automakers such as Toyota Motor Corp. and Honda Motor Co.

Yanase, which began selling GM cars here in 1915, sold just 3,000 GM cars in Japan last year, and that may shrink to half soon, Fukushiro said. Through May, sales of GM cars totaled about 1,000, he said.

The Nihon Keizai Shimbun, Japan's top business daily, reported Friday that Yanase dealerships selling GM will be slashed to six or seven by October. Fukushiro said a reduction was definitely in the works but numbers weren't decided yet.

GM has been struggling lately as it loses market share to rivals, including Japanese automakers. GM revised its first-quarter earnings last month to a $445 million profit. In April, it had reported a $323 million loss but changed that to reflect a health care settlement and other adjustments.

[HenryTo]

Their Sonatas in the U.S. actually look pretty good - although I have heard a lot of compliants about the interiors. That being said, I remember looking at the Nissan Altima when the current version become available in late 2001, and I didn't see anything I liked either inside the car. Give it another few years and Korean cars will become much more prevalent.

[rffrydr]

Hyundai had its best May ever. Funny.

[HenryTo]

16% y-o-y drop in total vehicle sales during May as opposed to an estimated 11%:

http://biz.yahoo.com/rb/060601/autos_sales_gm.html?.v=4

[rffrydr]

Another view to Chinese automotive expansion: we still have DOT on our side:

http://msnbc.msn.com/id/13064060/

[Prospero]

I was bullish on GM in the short term, but I think a downward move is quite likely now, or at least not much movement higher. Technically speaking, the breakout from the trading range between $18-19 and $23-24 could be expcted to roughly match the depth of the trading range itself, which is why I expected a move up to the $29-30 area. I think GM may hover around where it is for a little while ($27-28), and the 'quality' of the action will indicate whether the rally has legs or whether GM investors will revert their attention to the fundamental problems which Henry so often points out.

I've been stopped out of my long by now, but that's what I anticipate. On the bearish side, it would be rather shocking if GM were able to buck the recent severe downward pressure in the stock indices, having been a laggard for so long. On the bullish side, that's precisely what it has done for the past three weeks...