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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: Wed Jul 27, 2016 3:22 pm    Post subject: Reply with quote

1.24%....UH-OH!

I'm long this after writing 6-mos puts, after being long the preferreds from anos pasados. Look forward to dividend and buyback plan while I wait. Ironically, it's a Millenial play!
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PostPosted: Thu Jul 21, 2016 6:33 am    Post subject: Reply with quote

https://www.gm.com/investors/earnings-releases.html

One headline had to spell out that was billions, with a "B"

It's been a month of "peak auto"; three month of "sub-prime abyss", six months of "falling off a chinese cliff"... nearly a full year since "the looming recession" started to price in. Been doing the divvy handoff between Ford and call write....waiting. Made sure to go into earnings clean as Mary's body-language has been unmistakable.

Still--has to stick for the day. If not, I'll be "putting" myself some more.
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PostPosted: Wed Jul 06, 2016 11:16 am    Post subject: Reply with quote

Bought the Jan 18, Fiat 7.00 strikes this morning
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PostPosted: Mon Jun 06, 2016 8:11 am    Post subject: Reply with quote

It has now become an article of faith that next on the Silicon Valley disruptive "hit list" is a biggie, the Auto Industry. Why? Because Elon says its so. Nevermind the Model S was designed and "built" in Detroit; that the Google Jellybean was designed and built by Roush performance in Detroit and that the same has just entered a joint venture with Fiat to build its first batch of cars. Nevermind that "automated" driving is current technology and has been in wide deployment over the past half decade. Traction control IS automated driving. Last week, taking a drive in a friends Mercedes the car braked in the middle of the freeway when we chose to bypass its preferred exit for the next one. The same car's steering wheel vibrates intensely when you lane drift (last thing I want is think I've gotten a flat or broken suspension in that circumstance) So much for safety. No, any of this is beside the point.

Ridesharing, the end of autos? Of course we're all just taking out of our asses at this point. Indeed, there is every reason to believe that ridesharing, long before "autonomy" is achieved will actually increase the number of vehicles in demand as we gather up the sick and infirm and all the rest out of the loop. Uber currently lets drivers buy a new car and have the payments automatically deducted--and since drivers here naturally tend toward the jalopy challenged.... Is this not the "company store" reinvented? One thing we do know: the average driver in the US drives 15000 miles/year. Uber breaks down to about $1.50/mi. "The Future" does not compute.

The most formidable challenge of all still lies ahead, not the trial lawyers in themselves, but that all-important scheme in the auto biz, that there be somebody to blame for all our shortcomings. Currently "progressive" California has basically legislated hands-on drivers for any and all "autonomy". Google is appealing.

No. None of those are "it." The great wizard Elon says? Elon has been good for the whole industry and irreplaceable in the promotion of electric propulsion. And what do we got? 3% of sales. And Elon crying not to use his superchargers, which already aren't for us anyway (after helping specify what was supposed to be the "standard" plug in the first place!) As a driver, and lover, of an electric car I can tell you "range anxiety" is real. And so is the charging anxiety--and that's where we bump up against that greater social trend that is pulling us toward autonomy in driving in the first place: Woman. More properly the rise in the "liberated" modern purchasing agent: woman and her wishes and wants in all things traditionally bequeathed to the men of the world. Indeed full autonomous driving has long been in practice: Husbands and Fathers. It's coming to the point where the last vestige of manly duties is the continuous plugging of phones etc. in addition to taking the drudgery out of driving, becoming the family chauffer. And there it is, for Women, and by extension, Millenials, driving is drudgery. And without autonomous vehicles there is no divorce! But now we're back to plugging the damn thing in. My experience shows that woman just can't be counted on to do this in the way required. The cables are big, dirty, wet, cold and DANGEROUS. When baby is on board, that is just a risk too far. Enter the man once again!

Model "X" how about the recalls on those doors. Model "3" in 2018, when you actually take delivery will the $35,000 buyer pony up the additional $7500....will they pay the subscription rate for the chargers and the $3000 "option" for supercharging--let alone "autonomous" mode???

Forgetting all that, let's consider the two cultures: Silicon Valley has a thing known as "beta testing". Samsung just announced that its desktops can't function properly on Windows 10: this after how many years?! And what little company are we talking about??? The guinea pigs are what makes the Valley's Bayesian vision click. Your phone crashes, becomes insecure, drops your precious memories? Update. Your car?

There are already innumerable "computers" on board your vehicle. And the chip demand in the auto industry is as large as any. Google teamed with Fiat because it is Fiat that has the very heavy infrastructure to make real world work... work every day, rain shine or snow (which Google's jelly bean car is already challenged). A car's lifecycle currently is around 11yrs. A phone??? How many different operating systems does it have to work with for friend and family?

Apple has no interest in building cars. This entire adventure as more to do with liberating itself from the tarry grip of Ican and his ilk. Want to ringfence $60B in cash? Plans for building cars will do that. By the time Apple partners up with whomever and actually gets one of these off the ground (2021-2025) they will have moved on to whatever it is in Consumer Interfaces that they really want to accomplish (the long heralded "TV"?)

Auto companies are tools of the nation state. They work and function in ways antithetical to "disrupters" of any net worth. The Silicon Valley opposition, like all oppositions is false. And the family car, already being taken up in droves by the "carless" Millennials will be with us for a long long time. Meanwhile there is a global economy that just maybe move into synchrony. Imagine what that could do for automaker profits. And what of our Liberated Woman purchaser? All roads lead to Mr. Right. Wink
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PostPosted: Fri May 20, 2016 9:45 am    Post subject: Reply with quote

"That's a worry too..." jeeziz!
http://www.bloomberg.com/gadfly/articles/2016-05-20/negative-equity-hits-the-car-market
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PostPosted: Fri May 13, 2016 9:03 am    Post subject: Reply with quote


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PostPosted: Thu Mar 24, 2016 7:34 am    Post subject: Reply with quote



The "about due" rears it's ugly head once more in NY Auto show:

Quote:
A bit of a warning arrives from J.D. Power on the staying power of the U.S. automobile recovery. J.D. notes that the U.S. auto industry is in year seven of its recovery which lands in the middle of the typical post-recession recovery period of six to nine years.


I'm marking 8-9 off 2012. And Autos will be the disprover of such prattle.
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PostPosted: Thu Mar 10, 2016 5:02 pm    Post subject: Reply with quote

Yawn...

Los Angeles Times: Car ownership isn't dead, yet. http://google.com/newsstand/s/CBIwzaXNsyQ
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PostPosted: Thu Mar 03, 2016 6:26 am    Post subject: Reply with quote

There's the headline. ...and then the article:

http://www.bloomberg.com/gadfly/articles/2016-03-02/auto-sales-jump-on-incentives
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PostPosted: Fri Feb 26, 2016 1:55 pm    Post subject: Reply with quote

Leaning against this.... yet again (remember the inventory panic of 2012?):

Quote:
Since late third quarter, we’ve seen slight but noticeable deterioration in SAAR quality (slower ATP growth, higher incentives, rising inventories, slightly worse credit quality) that points to peaking volumes. It’s been primarily on the car side, but that can’t be discounted, given the difficulty of meaningfully adjusting near-term production mix. And catalysts in the near-term are likely to be negative, as the industry grapples with this shoulder phase: 1) Car Pricing will get worse to clear inventories; 2) Negative news flow around production cuts is likely; 3) Production cuts will drive negative est revisions (we believe 3rd-party est’s of 3%-4% NA production growth in ’16 are too high); 4) Could begin to see mgmt teams selling personal shares or slowing down buyback pgm’s.



A level SAAR with increasing truck mix and falling inputs is a money machine--and so is selling puts on these guys Idea
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PostPosted: Tue Feb 16, 2016 10:53 am    Post subject: Reply with quote

Hello big short subprime autos: the automobile is a depreciating assets. Always has. Always will. And they're doing just fine.

Meanwhile:

http://www.acea.be/uploads/press_releases_files/20160216-PRPC_1601_FINAL.PDF

Shoot first:



http://ftalphaville.ft.com/2016/02/26/2154488/delinquencies-rev-up-in-us-subprime-auto/
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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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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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