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GM Death Watch
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Author GM Death Watch
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PostPosted: Tue Jan 10, 2006 1:53 pm    Post subject: GM Death Watch Reply with quote

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

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rffrydr
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PostPosted: Sat Jan 30, 2016 7:18 am    Post subject: Reply with quote

Nice to have a picked an industry that has perhaps never been so profitable in generations yet so beset upon. Fashion and ageism as prevalent in the stock market as any avenue in life. The "Max Letter" is answered in Sergio M.'s earnings thusly:

Quote:
And we want to start with the Slide number 3 which includes the quotation of a statement that was published by Mark Twain a number of years ago. This was introduced in the pitch in the last couple of days and it follows the announcement that was made by Max Warburton that he will be leaving this industry after 16 years after spending 16 years trying to understand the car business.

And in connection with his departure he has issued the longest dear John letter I have ever seen in my life, 422 pages, what is described or his call for the demise of this industry in a very negative view on the sector going forward.

Apart from the fact that Max has probably outlived the most automotive CEOs in this business. I think he is the longest serving non-CEO, CEO that I’ve ever seen in the sector. I think, over the last few years, we have had heat of exchanges and diametrically opposed views about how this business will evolve, I think it’s been done, it’s been done well.

I think we are going to miss Max certainly out of FCA he has provided a good sparring partner for the development of our strategy. We do wish him the best. But, just as a general remark about the type of literature that is not coming out, not only from analysts, but also in the press about the negative side of this industry.

We are not inside FCA of the view that this industry is facing an impending demise and I think that part of this presentation today is designed to provide you with some comfort that we have appropriate or adequate controls over the strategic development of those business that we do feel that we will be able to navigate through these rough waters and that we will come out of this process as better organizations.

And I made the comment not just on behalf of FCA but I think on behalf of the industry which I think is unfortunately been the subject of some severe criticisms in some cases justify


But what really got the ball rolling, was darling of the industry and best spokesman for on the bunch, Mike Jackson's Auto Nation's sour grapes on otherwise celebratory December industry numbers. Yes, he called NA "plateau" (which I consider a gift), and the turn to SUV/Trucks (a gift to Detroit) but struck worry with his abrupt decline in margins and sales--all to the high end German imports it turns out. Post August stock market would seem to account for that, but what really stunk up AN was his leveraged expansion into luxury areas in the oil belt--particularly Texas. So the greasy stuff pops up its greasy head once again.

Disheartening as it is to see these companies suffer more than, say, China oil, or Macy's, or almost anything outside coalash, all in all will serve these company's capital allocation plan well. On dividend alone what GM will save with its buyback program smashes it's "cost of capital". China is the "big question" (ironically thriving with tax support) while gasoline is considered nothing.

Market doesn't think much of move toward Silicon Valley. And that is probably correct. The idea however that Ford will become some kind of anonymous "chip" supplier to king brand "Apple" is absurd however. Apple needs desperately to burn some cash to put down upitty shareholders. Cars can do that. So we'll see more. But for all those bemoaning "CapEx" it's here in spades in the car industry. --and gets treated as such.

"Software" in all its forms, has really spoiled the equities markets. The sooner Amazon ramps up its own Walmart distribution platform, the sooner we'll have squared the "Bricks and Mortar" circle, the better![/quote]

http://video.cnbc.com/gallery/?video=3000489597

http://video.cnbc.com/gallery/?video=3000471829
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rffrydr
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PostPosted: Tue Jan 26, 2016 10:05 am    Post subject: Reply with quote

"Peak Car". So it was a value trap all along....

Don't agree with the gist or details of this but fairly represents current "market" thinking (if not the industry's). Volkswagen/Hyundai is probably the closet fit, but would (and am, big time) lean against it (option writes allow a good "lean")

Quote:


We have now enjoyed one of the longest economic expansions in history. Global car sales
in 2015 reached 87 million units (up 35% on 2009 levels) and the main OEMs will report
total EBIT of over US$130 billion — both all-time record highs. Perhaps global industry
earnings can hold up in 2016, but thereafter, we believe a decline is inevitable. We are at
the end of an era of super-normal Chinese pricing, global capacity shortages, cheap
money, and at the end of an era that has seen conventional vehicle technology still prevail.

PM


The most important factor behind the extraordinary growth in industry returns has been
the China boom. Many OEMs have enjoyed margins of over 20% in China — far above
global norms. But Chinese profitability has clearly begun to fall. The second key factor has
been the strong growth in U.S. market profitability in recent years. The U.S. government’s
response to the GFC was highly effective and allowed the industry to “reboot,” lowering
costs and lifting pricing. But volumes have now recovered, financing has been pushed to
the limit, new capacity is coming on stream, and there are early signs of deteriorating
pricing. With Chinese and U.S. profits set to roll over, it is hard to see what can provide an
offset. Almost all other emerging markets — many of them previously handsomely
profitable — have deteriorated. Europe is a bright spot, but since capacity was not
addressed in the crisis and the vehicle mix remains biased toward small cars, contribution
margins remain dismal.

PM


On top of negligible global volume growth, the industry is also about to face multiple new
challenges from tough emissions standards, diversifying powertrain options, connectivity,
autonomous driving, and perhaps even new industry entrants. Things are about to get
much more complex — both technologically and strategically. But that means it’s going to
become a lot harder for OEMs and investors to make money. Do we have the right
expertise and skills to deal with this new era? We’re not convinced. Investors used to want
us to analyze capacity, pricing, and costs. Now, everyone just wants to talk about

Apple iCar, Uber, and the sharing economy. It’s all very interesting, but it doesn’t
necessarily lend itself to financial analysis.


We recommend a cautious stance on the sector. Stocks look fairly cheap on earnings
multiples, but that’s because at some point soon, industry earnings will begin to roll over.
There will be very few OEMs that can out-run these conditions and make money for
investors. We will look back on the last few years as a true “golden era” for industry
profitability, and possibly for auto sector analysts.


--Bernstein Max Warburton via alphaville
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PostPosted: Thu Oct 22, 2015 5:18 am    Post subject: Reply with quote

Imagine what they'll do when that currency translation comes back....next quarter Twisted Evil

"GM profit tops estimates on strong truck demand, improved China" - http://www.reuters.com/article/idUSKCN0SF1CE20151021

And the commodities efficiencies. ... and a profitable europe. All highlighting the potential of these enormous autos revenues. --Bit the would be a tale of unrequited love. --A tale if sound and fury.
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PostPosted: Sat Oct 10, 2015 10:53 am    Post subject: Reply with quote

Yadda Yadda yadda:

Forbes Now: Rolling In Value With General Motors. http://google.com/newsstand/s/CBIwpZes1yI
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PostPosted: Wed Sep 30, 2015 10:54 am    Post subject: Reply with quote

The "big" bear case:





[/list]
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PostPosted: Tue Sep 15, 2015 8:36 am    Post subject: Reply with quote

Quote:
Auto debt owed by U.S. households in the second quarter this year rose above $1 trillion for the first time, fueling car purchases and a Lazarus-like revival for an industry brought down by the 2007-2009 financial crisis.


Called that debt move (maybe the only monetary passthrough of this historical "easing". Called that Lazarus... Show me NO money. That's what playing the game by the rules gets you. Twisted Evil

Thank you options and your wonderful melting premium.

http://www.wsj.com/articles/after-speedy-recovery-will-fed-tap-the-brakes-on-u-s-auto-sales-1442314801


This "yes-butting" has been going on since '10, hot and heavy in '12. But the cycle marches on. Note: the paradigmatic couple in article did NOT buy at 0.00%
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PostPosted: Mon Sep 14, 2015 6:33 am    Post subject: Reply with quote

Follow the money:

http://on.wsj.com/1QyVx0l




NOT:







Rolling Eyes
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PostPosted: Mon Aug 24, 2015 10:22 am    Post subject: Reply with quote

Well looks like I'll be "put" my shares, what I wanted Confused

This china big bang will actually be good for the autos... major capex expansion still slated is getting unslated as we speak. And, like Apple, the Retail economy will power on. Most of the stock market burn is already behind them not because most of the margin washout is behind them, which it is, but most of the buying isn't related to stocks or "markets" of any kind.
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PostPosted: Thu Jul 23, 2015 7:32 am    Post subject: Reply with quote

Quote:
-- GM Europe reported EBIT-adjusted of $(0.0) billion. This compares with
EBIT-adjusted of $(0.3) billion in the second quarter of 2014, which
included $0.2 billion for restructuring costs.



--BINGO! Very Happy

Of course GM's selloff was far greater than either Volkswagen, who's really taking it in China (those sky-high margins have further to fall)... or, amazingly, GM's Chinese partner SAIC. --But maybe not so amazing when you consider the hand on tiller, Goldman. This must be a half-dozen times a Goldman downgrade has led into a strong equity reversal within a few week. That they acquired nearly 5% of the company in April is just the stick that stirs the pot. The mysterious jump in short interest into "what everybody expected to be a strong earnings" was the stick in the eye.

This is not a game for the fair or faint of heart. Twisted Evil

[Next up: the collapse of the American market to 14m SAAR in '17]. Not gonna happen.com
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PostPosted: Thu Jul 09, 2015 8:29 am    Post subject: Reply with quote

For all the hoopla china is the place that covers GM's azz in Europe and... not much more at this point. Why? "Joint Ventures". China's stocks go up: sell GM, they all want Audis now. China's stocks go down: sell GM because the buyers have lost all their money and jumped out of skyscrapers.

All the while high-high margin pickups (which when everything else is going well gets cited as the problem) not only keep marching higher, actual share is being earned on Ford's delays

I'll take the 4.7% yield if the market will give it to me. Have modest holding on Bankrupt rump MTLQU and have comfortably been buy-writing into dividends this last year: now willing to go big again. Selling ATM puts basis Sept and Dec this morning. Looking for the US cycle to go another 3 years. Worst case modest recession and dividend stays. Free option on (incredibly) Marchionne union. Activists don't want it.... but I think everyone would take it at this point. Culture is the enemy here. But Obama is the irony.

Embarassed

Labor and forthcoming DOJ $2B hit will keep price underwater for a quarter or two.
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PostPosted: Wed Jun 17, 2015 5:36 pm    Post subject: Reply with quote

Irony of Ironies... Of irony:


http://finance.yahoo.com/news/exclusive-gm-fca-line-financial-210527084.html
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PostPosted: Fri May 01, 2015 12:42 pm    Post subject: Reply with quote

http://www.fcagroup.com/en-US/investor_relations/events_presentations/quarterly_results_presentations/SM_Fire_investor_presentation.pdf

This is being met with the ridicule it doesn't deserve. Culture, regulation and pride would lean against it. Self-driving car and everything becomes possible.
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PostPosted: Tue Mar 10, 2015 11:42 pm    Post subject: Reply with quote

Good deal. Smart Harry. And they're not really paying anything since it's all out of future cashflow--with a $5B if all goes well (doubt we see that though).

Good buy-write, nice dividend and we ain't going into recession for a few years anyway.
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PostPosted: Tue Feb 10, 2015 9:11 am    Post subject: Reply with quote

...and, of course, that just whet the appetite. An activist investor! Here! Here, a company of "stakeholders" (by which is meant NOT shareholders) and a Board composed of Rear Admirals and UAW thugs! Yes it's ripe for it: both in numbers and time--and the false promise of the IPO ....but that's really beside the point with this company. GM's weak attempt to call it's treasury buyout (and VEBA note call for that matter) a "return to shareholders" almost mocks the meaning.

But it really does need that 20+ billion in automotive cash; and it really does need that 9Billion in Cadillac. And it really does need that upgrade to Europe and model flow...

Sold out last time this company was "in play" and will this time as well. My bet is Harry goes packing--all depends if Buffett wants to ride on the Hedges' dirty work Twisted Evil
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PostPosted: Thu Feb 05, 2015 11:54 am    Post subject: Reply with quote

Well, blow me down, GM, the ultimate traditional "economies of scale" company has found a way to at last "deliver value"..... yield. Call writes (and a timely full sell Dec, 28 '13) have been serving that end for myself with $1.50-$1.70 (annualized) coming in the second half, after UAW agreement negotiations, and oil/miner/CAT trading at 3.50% yield should be dragging the share value up another 10-20% kicking and screaming.

The cash freed up form that unconscionable VEBA note (that in any other biz would be fiduciary crime) and, yes, breakeven Europe 2016 and no more government stakes after Ontario, no pension obligations (15% on 100B ain't bad '14 return for bonds!) this year and most of next provide a nice stash. Coming off the investment cycle next year with a true "platform-model", housing recovery and sub $3 gas with a cycle that could easily go tot 2018 might even kick us into "investment grade" at long last. Not counting on that... but has Amazon fills Radio Shack stores and keeps getting hauled before labor boards we will see greater and greater pull of "infinite margins" down into the real world. To what potential? How about 8% on $150B in revenues in four years???? Look for buying op around Q1 negative cash-flow print w/ DOJ fine for $1.3B.. Europe falls apart all bets off, of course.
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