GM - General Motors

[MYDemaray]

Don't forget the underfunded pension plan, which eats up most of the cash...

[PlanMaestro]

Canada: once dominant General Motors fell to third behind Chrysler.

http://business.financialpost.com/2013/01/03/ford-hangs-onto-canadian-sales-crown-in-2012-chrysler-bumps-gm-down-a-notch/

 

“We believe Ford’s top selling three-peat is the first such occurrence in the almost one-hundred years since GM overtook Ford to become the number one vehicle retailer in Canada,” he said. He said he believed Chrysler had not held the No. 2 sales spot either since sometime in the 1960s.

 

Despite GM’s troubles, Mr. DesRosiers said he believed Canada auto sales may reach a new peak in 2013, aided by the sales surge at South Korean and European brands.

 

“By any measure, it is safe to say that 2012 was the year that the European brands took the market by storm, followed closely by the Koreans,” he said. “Korean brands have established a significant presence at the bottom end of the market while the Europeans have gained footholds in the lucrative middle and high end segments.”

[PlanMaestro]

Reuss: Judge us in mid-2014

http://www.autonews.com/apps/pbcs.dll/article?AID=/20130107/RETAIL01/301079969/reuss-judge-us-in-mid-2014

 

That was the message last week from GM North America President Mark Reuss as he fended off questions about GM's 17.9 percent U.S. market share for 2012. That's down from 19.6 percent in 2011 and the first time GM has slipped below 18 percent since before the Great Depression, with the exception of the World War II years.

 

By mid-2014, GM will have executed the most extensive overhaul of its vehicle lineup in its history -- and maybe in the industry's history, Reuss says. That should help claw back market share that GM ceded in 2012, he implied.

 

"Our portfolio is the very oldest in the industry right now," Reuss told reporters and analysts after GM released its December sales figures. "If there's a switch that you're going to throw and say 'Judge us,' give us 18 months. And you're going to see the whole portfolio turned."

 

GM's December sales rose 5 percent, to 245,733 vehicles, trailing the industry's 9 percent growth. GM's sales for the year were up 4 percent, well below the industry's 13 percent gain.

 

Reuss and other GM executives acknowledged that the aging vehicle lineup -- made worse by product-development and investment delays stemming from GM's 2009 bankruptcy -- has hurt market share. They also cited the rebound of Japanese competitors, which reclaimed share they ceded after the March 2011 earthquake in Japan.

 

Despite those pressures, Reuss said GM did not want to resort to its old ways by dumping big incentives on vehicles in order to protect market share.

(…)

 

GM's major launches in the next 18 months will include:

 

• The next-generation Chevrolet Impala and Silverado and the GMC Sierra this spring.

 

• The next-generation Chevrolet Corvette by late summer.

 

• The Buick Encore crossover by February.

 

• The Chevy Suburban and Tahoe, GMC Yukon and Cadillac Escalade expected by the first half of 2014.

 

[Edward]

I love the Chevrolet Spark EV, coming in 2014 for 32,500$ before tax incentives. It has 100 kW (130 hp) motor, providing 400 lb-ft of torque, which is insane for such a small car.

http://www.autoblog.com/2012/11/27/chevy-spark-ev-unveiled-priced-under-25k-with-tax-incentives/

 

 

[Guest hellsten]

As you all probably know, there's a story on GM in Grant's Interest Rate Observer Winter Edition:

http://www.scribd.com/doc/118345999/Grants-Winter-2012

 

I'm including some relevant excerpts from the article in this discussion:

 

One doesn’t have to assume growth in vehicles per household to get there, only continued population growth of a little under 1% per year. At that rate the automakers would return to the good old days of 16 million sales as soon as 2015

 

At 11 years, the average car and truck on American highways in 2011 was the oldest on record

 

To purchase and finance an average-priced new car required 23.2 weeks of median family income as of the first quarter…That was within a whisker of the all-time most affordable period

 

the company, as of year-end 2011, owned $47.2 billion of deferred tax assets before valuation allowances…

GM is unlikely to be paying taxes to the U.S. government for another six years at least

 

Daniel F. Akerson, chairman and CEO, pledged to “make GM great again,”…

The impact of new vehicles will be especially profound in the United States, where about 70% of our name plates will be new or freshened over the course of 2012 and 2013.”

 

while Ford will be revamping low-margin vehicles, GM will be fo-cusing on high-margin ones.

 

Full-size trucks are where the money is…GM will sell more of these trucks and at a better price point

 

If management can find its way to a 10% operating margin, roughly 220 basis points more than it is posting today, there in lies $2 billion to $3 billion of improvement in operating profit, equal to $1.11 per share to $1.67 per fully diluted share—none of which will be taxed for a long, long time.”

 

pension obligations of $134 billion, the company faces an unfunded liability of $25 billion

 

it’s a stretch to call GM a back-door play on rising interest rates, there is some element of truth in that notion, at least in the matter of pension obligations

 

This publication, as bearish as it is on China, regards GM’s exposure to the People’s Republic as perhaps the greatest risk the market has not adequately discounted

 

Hurdle No. 3 is the overhang of U.S. Treasury-owned shares, 500 million, or just over 30% of the total. Many ask:Why get into GM before the government gets out? To get out whole, Secretary Geithner would need a price of $53 a share.

 

What you’re left with is an enterprise value of $21.66 billion. We assume that ‘core,’ or non financial GM, can produce $12 billion in EBITDA. Dividing $21.66 billion by $12 billion, we find that an investor can buy GM at 1.81 times EBITDA, compared to the 3.5 times EV-to-EBITDA multiple at which the likes of Magna International, Delphi and Tenneco change hands.”

 

Note that the article was published August 10, 2012.

 

That Mohnish, Einhorn, Tepper and BRK own the stock is a good sign for coattail investors like me:

http://www.dataroma.com/m/stock.php?sym=gm

 

Warrants have doubled since summer:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=GM.WS.A&insttype=Stock

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=GM.WS.B&insttype=Stock

 

I'm still researching GM, so I haven't bought any shares.

[hyten1]

i own decent amount of the B shares seem like a better deal than common

[PlanMaestro]

GM’s Girsky must solve Opel conundrum

http://www.ft.com/intl/cms/s/0/4870dcf6-5b1b-11e2-8d06-00144feab49a.html#axzz2HeGkstUR

 

 

[Palantir]

dude...this is cheap. 24B of net cash, EV of 23B...?

[hyten1]

don't forget pension liability

[thomcapital]

Interview with Dan Akerson in the WSJ from earlier this week:

 

http://online.wsj.com/article/SB10001424127887323482504578229852571958928.html?mod=WSJ_qtoverview_wsjlatest

 

 

WSJ: What are a few things you want to accomplish during your tenure?

 

Mr. Akerson: I would like to see Cadillac become a global brand. I would like to see Opel cut its losses this year by anywhere from one-third to one-half. I would like to see Chevrolet become a true global brand. It is number four in the world today. I think it has to move up. I am not going to tell you where I think it ought to be, but I am not satisfied with fourth place. I would like to get to investment-grade rating this year. I would like to purchase the remaining shares, or have the government exit in one form or another. It is pretty ambitious for '13 going into '14.

 

[PlanMaestro]

2014 Corvette.

 

http://www.autonews.com/apps/pbcs.dll/article?AID=/20130111/OEM04/301119797/gm-aims-new-corvette-beyond-successful-plumbers

[MYDemaray]

I'm not a huge car guy, but I think the new Corvette looks great, and have heard similar things from friends.  Seems like the halo effect may work.

 

Thought this piece in the WSJ about GM's learning from Disney was interesting:

http://online.wsj.com/article/SB10001424127887324081704578235612630814172.html?mod=ITP_marketplace_1

[hyten1]

c7 corvette looks nice

 

this is how i describe it

 

batmobile  is for batman

c7 corvette is for bruce wayne

[MYDemaray]

batmobile  is for batman

c7 corvette is for bruce wayne

 

haha. Nice. Kind of like "drive a Bentley, be driven in a Rolls".  The $50k'ish price tag everyone keeps quoting seems very accessible for the machine...

[hyten1]

the new cadillac elr (electric vehicle)

 

http://www.autoblog.com/2013/01/15/2014-cadillac-elr-is-making-green-sexy-in-detroit/

[PlanMaestro]

All-New Corvette 'Unapologetically American'

http://www.bloomberg.com/video/car-makers-unveil-their-latest-models-TBm5wQ06R8GBMVQsLf3mhw.html

[PlanMaestro]

 

 

General Motors (GM) told analysts at a Deutsche Bank industry conference in Detroit yesterday that it expects a modest increase in pretax profits in 2013 and believes global auto sales will also grow modestly this year, the Associated Press reports. The automaker sees pretax profit margins in North America rising to 10% from 8% in three to four years.

[PlanMaestro]

The U.S. Treasury Department has hired JPMorgan Securities and Citigroup Global Markets to sell its remaining stake in General Motors and bring an end to almost four years of partial government ownership of the car maker.

 

The government, which got its stake in a $49.5-billion bailout of the company in 2009, still holds 300 million shares of GM common stock, giving it 19% of the auto giant. Treasury officials revealed hiring JPMorgan and Citigroup on Wednesday in documents posted on the department's website.

 

The banks will get one cent for every share they sell for a fee of up to $3 million.

 

The documents gave no timetable for sale of the remaining shares, but the government has said it intends to be out of GM by early next year. Contracts with the two banks run through Jan. 14, 2014, but can be extended in 90-day increments or through mutual agreement. Extensions can't go longer than Jan. 14, 2017.

 

 

[PlanMaestro]

New book coming.

 

http://www.amazon.com/American-Turnaround-Reinventing-Way-Business/dp/1455513016/ref=tmm_hrd_title_0

 

Excerpt: http://management.fortune.cnn.com/2013/01/23/ed-whitacre-american-turnaround/

[PlanMaestro]

In Brazil, clues how GM will look under Akerson's global brand push

http://www.autonews.com/article/20130126/GLOBAL/301269998#ixzz2J3YlPC5M

[txlaw]

AutoNation CEO on record results:

http://video.cnbc.com/gallery/?play=1&video=3000143937

[PlanMaestro]

These are better days baby … tonight this fool's halfway to Heaven and just a mile outta Hell.

 

GM's January U.S. sales rose 16%.

http://www.marketwatch.com/story/gms-january-us-sales-rose-16-2013-02-01

 

Broadly, U.S. new-auto sales for January are expected to increase 15% from a year earlier and drop 23% from the prior month, according to Edmunds.

 

GM reported it sold 194,699 vehicles in January, up from 167,962 a year earlier and 21% below December's total of 245,733.

 

Chevrolet sales were up 11%, as GMC sales increased 23%. Total Buick sales climbed 32%, and total Cadillac sales jumped 47%.

 

Month-end dealer inventory in the U.S. stood at 737,885 units, up 2.9% from the prior month. January had 25 selling days this year and 24 selling days a year ago.

 

[…]

 

Earlier Friday, Chrysler Group LLC reported its U.S. auto sales rose 16% during the month, driven by jumps at its namesake and Dodge brands, while Ford Motor Co.'s (F) U.S. new-vehicle sales rose 22%, as gains by its namesake brand continued to offset declining Lincoln sales.

 

 

 

[PlanMaestro]

GM Said to Seek Deals in China to Reach 5 Million Goal

http://www.bloomberg.com/news/2013-02-05/gm-said-to-seek-deals-in-china-to-reach-5-million-goal.html

 

The Chinese auto industry is overdue for consolidation and General Motors Co., with local partner SAIC Motor Corp., is interested in acquiring ailing automakers, according to four people familiar with the companies’ thinking.

 

GM, already the top foreign carmaker in China, aims to increase sales by about 75 percent by 2015 to 5 million, and a deal with another automaker is one possible way its ventures can expand, said the people, who didn’t want to be identified because the plans are private.

…

 

China has the world’s most overcapacity. Factories in China are able to produce about 10 million more vehicles than they currently make, according to LMC Automotive. That’s more than the number of autos made in any country other than China or the U.S.

 

GM and SAIC have plans to open two assembly plants in China in 2014. Even then, their joint ventures may be capable of making only about 4 million cars, sport-utility vehicles and microvans a year. One way to stay on track with the 5 million target set when growth was more exuberant would be by taking over assembly plants that aren’t operating at full production.

[racemize]

Ed Whitacre on the DailyShow:

 

http://www.thedailyshow.com/full-episodes/wed-february-6-2013-ed-whitacre

 

Pretty odd responses from them, particularly at the end.  I was hoping for more substance...

[PlanMaestro]

Do I understand it correctly that there is no adjustments for cash dividends?

 

There is no definition for "ordinary cash dividend" in the agreements, and that means something completely different for the other TARP warrants.

 

As

registered 136,363,635

expiration July 10, 2016

exercise price of $10.00

 

Bs

registered 136,363,635

expiration July 10, 2019

exercise price of $18.33

 

Adjustment of numbers after IPO (including exercise date and strike): http://www.sec.gov/Archives/edgar/data/1467858/000119312511103292/d8a12b.htm

 

Original registration As: http://www.sec.gov/Archives/edgar/data/1467858/000119312510078119/dex1031.htm

 

Original registration Bs:

http://www.sec.gov/Archives/edgar/data/1467858/000119312510078119/dex1030.htm