By Kevin Miller 

I don’t know why it had to be Saab that caught my eye in the late 1980s and made me a fan – and driver- for life. I wrote about it once upon a time for Autosavant, that post is linked here. Whatever the reason, I’ve been caught up in my favorite brand’s gut-wrenching decline for two years. Even in December 2009, I had practically written my favorite brand’s eulogy. Although the Swedish brand’s fate was delayed for two years, it now, unfortunately, seems to be for real. Continue Reading

By Chris Haak

As a fan of diversity and healthy competition in the global automobile industry, it’s not easy to write this.  I think there would be nothing better than a healthy, self-sustaining Saab, pumping out the new 9-5 sedan (and soon, a 9-5 SportCombi), GM-built 9-4x crossover, and new Saab-developed models such as the next-generation 9-3 and a potential smaller 9-2.  However, the reality is that Saab is an extremely sick company, one that hasn’t buit a car in five months (and therefore has no incoming cashflow) and whose short-term existence is dependent upon the good graces of the Chinese government in approving investments of Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. in the struggling Swedish automaker.

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By Chris Haak

Last week, about two years after exiting bankruptcy protection, Chrysler Group LLC has repaid its outstanding government loans.  Between a $5.9 billion USD repayment to the US government (principal plus interest) and a $1.7 billion USD repayment to the Canadian government, the company repaid $7.6 billion USD of its obligations to the two countries’ taxpayers.  Today, Fiat announced that it has purchased the 6 percent of Chrysler owned by the US government for $500 million USD.

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By Chris Haak

Probably due to its much larger size, GM’s bailout and repayment of some government loans has drawn far more attention than the assistance provided to Chrysler has for the past several years.  Chrysler doesn’t even get the perk of a derogatory nickname like “Government Motors” has.

Former “Car Czar” Steven Rattner’s book described how the Obama administration was split nearly 50-50 on whether Chrysler was even worth rescuing, and not everyone is certain of the viability of the now Italian-American automaker in the coming years.

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By Brendan Moore

The chatter in Washington is that the U.S. Treasury Department is going to sell most of its shares it received in General Motors stock in 2009 as part of the auto industry bailout package, perhaps as early as this summer. The reasons are either political or financial, depending on whom you ask. Some will tell you that the Obama administration wants the sale this year so that the federal bailout of GM is a non-issue in the 2012 presidential election, and some say that the sale is going to happen this year because the Treasury department thinks the current stock price is as high as it’s going to get for the foreseeable future.

Either way, unless the share price climbs above an unlikely $53 a share before the sale date, the Treasury’s dream of making a profit on the bailout is not going to be realized. At $53 a share, the federal government breaks even on the $50 billion it “loaned” GM, but at the current share price of approximately $30 (well below the $33 IPO price of last November, which raised around $20 billion), taxpayers would lose around $11 billion.

The U.S. Treasury currently owns 500 million shares of the reconstituted GM, which represents 33% of the company’s worth.

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By Chris Haak

Just over a year into its new life as an independent company (forgetting the fact that it’s actually held by Spyker, a boutique automaker of sports cars), Saab is again facing financial difficulties.

Spyker’s annual report released today – which is not an April Fool’s joke – said that the company’s continuity is uncertain unless it receives additional funds to finance operations and fund its business plan.  In fact, the situation is so serious that production had to halt for several days earlier this week because some key suppliers stopped delivering parts to Trollhattan due to non-payment.

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By Chris Haak

Ford has been releasing some increasingly attractive earnings reports lately, dating back seven quarters, showing only black ink on its GAAP financials since the second quarter of 2009.  And with the book closed on Ford’s fourth quarter results for 2010, the company announced its largest annual net income – a hefty $6.56 billion – in more than a decade.  The good results are a product of Ford getting three key areas right:  volume, product mix, and pricing.  Also, Ford now has zero “net debt,” which means that the company now has more cash on its balance sheet than it does debt.  Without the benefit of bankruptcy the purge the balance sheet like GM and Chrysler “enjoyed,” Ford has been at a competitive disadvantage by having to pay larger interest payments than its rivals did.

But amid the hype about Ford’s annual results for 2010, the company’s fourth quarter 2010 results were somewhat pedestrian by the standards that it’s set over the past two years.  Fourth quarter GAAP earnings were “only” $190 million.  Ford reported net income of $886 million in the fourth quarter of 2009, which is nearly an 80 percent decline.  But, as is usually the case, the headline numbers don’t tell the whole story.

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By Chris Haak

Less than a year and a half after its predecessor, General Motors Corporation, collapsed under the crushing weight of declining sales and market share, unsustainable debt levels, and enormous labor costs, General Motors Company has completed its initial public offering.  Starting this morning, you can hit up your broker for a few shares of GM (the company got its old ticker symbol back) and ride what may or may not be the company’s ascent toward business success.

The company sold 478 million shares yesterday, priced at $33 per share.  That price was well above the original expected price range of up to $27 per share, and also at the top end of the revised $30-33 per share.  The revised range, and the higher price, reflect considerable IPO demand for GM’s stock.  On top of the 478 million shares, GM’s bankers were expected to also sell another 71.7 million shares as an “overallotment,” which is allowed when demand for shares is stronger than expected.  The 478 million shares raised $15.774 billion, and the 71.7 million shares raised another $2.366 billion, for a total common stock sale of $18.14 billion.

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By Charles Krome

Let me deal with one thing before I even start: I was definitely in with the bailout crowd back during the depths of the global economic meltdown, and I remain a firm believer in government providing the occasional boost to U.S. industry. But that being said, I’m starting to get a bad feeling about how things are playing out at General Motors.

Consider: The General recently teased its third-quarter financial results—the final numbers will be released on Wednesday—and the early line is that the company expects to see a “net income attributable to common stockholders” of about $2 billion. That’s a swing of more than $3 billion as compared to GM’s results during the same time last year, although the automaker’s 2009 third-quarter numbers were more hazy and haphazard than usual, due to the whole “going through bankruptcy” business.

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By Chris Haak

Less than a week after the German government declined to provide the state aid that Opel requested to partially fund its restructuring, GM’s European arm has decided to withdraw all requests for state aid.  Instead, the automaker will fund its €3.6 billion restructuring program with money from the parent company, according to GM Europe CEO Nick Reilly (pictured).

Though the company did not say so, most of the change of heart is probably an attempt to shed the “loser” image that Opel increasingly seems to find associated with itself, as its initial request for aid dates back prior to GM’s bankruptcy, or more than a year ago.  In the ensuing months, Opel has begged, pleaded, and cajoled Berlin – not to mention other European capitals and other German state capitals – to open the purse strings to improve Opel’s competitiveness, from a cost and a product standpoint.

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