Category Archives: news analysis

Hyundai and Kia Caught in EPA Mileage Rating Fraud

Posted on 2 November 2012 by Ken Zino

The U.S. Environmental Protection Agency (EPA) today announced that Hyundai Motor America and Kia Motors America will lower their fuel economy (mpg) estimates for the majority of their model year 2012 and 2013 vehicles after EPA testing found “discrepancies” between agency results and data submitted by the company. The fraud produced mileage claims that could be as much as 6 mpg higher than EPA tests showed. About 900,000 vehicles are affected in the largest mileage scam to date. Continue reading →

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Ford’s Mulally to Remain as President CEO through at Least 2014

Posted on 1 November 2012 by Ken Zino

Ford Motor Company Executive Chairman Bill Ford said today that Alan Mulally plans to continue to serve as Ford president and CEO through at least 2014. Mark Fields was named the company’s chief operating officer effective 1 December. The announcement has industry observers debating whether Fields is ultimately talented enough to lead the U.S.’s second largest automaker. Fields will continue to report to Mulally, as will the company’s chief financial officer, general counsel and group vice president of Human Resources and Corporate Services. Continue reading →

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Ally Financial Repays $2.9 Billion of FDIC Debt

Posted on 31 October 2012 by Ken Zino

Ally Financial today announced it has repaid $2.9 billion in debt issued under the FDIC’s Temporary Liquidity Guarantee Program (TLGP). The bank holding company issued this debt on 30 October 2009 with a maturity date of 30 October 2012. The final Ally debt guaranteed under the TLGP will be repaid in December 2012 and totals $4.5 billion. Continue reading →

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General Motors Posts Q3 Profit of $1.5 Billion, off -$200 Million. Ideologues Out in Full Force for Halloween and the Election

Posted on 31 October 2012 by Ken Zino

General Motors Co. (NYSE: GM) today announced third quarter net income of $1.5 billion, a drop of -$200 million from the same period in the prior year. This works out to $0.89 per share including special items, which reduced net income by $100 million and cut earnings per share by $0.04. In the third quarter a year ago, GM’s net income was $1.7 billion or $1.03 per share. The results represent a turnaround especially in view of Q1 of 2009 when GM lost almost -$10 per share.

In spite of wild claims – critics say deliberately false – from the repudiated Republican right about the auto bailout, GM is not going bankrupt. GM’s debt-to-equity ratio is only 25% of the overall auto industry average, and it now has more than $37 billion in liquidity. GM in the context of the current travails of the global auto industry is performing reasonably well. Continue reading →

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Fiat Group Doubles Q3 Profit to €286 Million. Revenue €951 Million

Posted on 30 October 2012 by Ken Zino

The Fiat Group in Turin today recorded a Q3 profit of €286 million or $371 million (2011 €112 m) as Chrysler earnings in North America offset losses in Europe. Without Chrysler, Fiat would have lost -€281 million in the quarter. Continue reading →

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Ford Motor Posts $1.6 Billion Profit in Q3. Europe Loses $468 Million

Posted on 30 October 2012 by Ken Zino

Ford Motor Company said today that Q3 profits were $1.6 billion based on revenues of $32.1 billion. Q3 pre-tax profit was $2.2 billion, or 40 cents per share, an increase of $200 million from Q3 2011. Ford Credit reported a pre-tax profit of $393 million, a decrease of $188 million from third quarter 2011. The positive results, as they have for years now, came almost entirely from North America, which achieved its highest quarterly profit, pre-tax $2.3 billion and operating margin 12%, since 2000 when the Ford Motor started reporting the region as a separate business unit. Continue reading →

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Japanese Top CR Reliability Survey Again. Ford, Lincoln Plummet

Posted on 29 October 2012 by Ken Zino

Toyota Motor Corporation’s three brands – Scion, Toyota, and Lexus took the highest places in the latest reliability survey released today at the Automotive Press Association in Detroit. The Toyota brands were followed by four other Japanese makes: Mazda, Subaru, Honda, and Acura, respectively. All of the models produced by the top seven Japanese brands had average or better reliability according to Consumer Reports, based on a survey of 800,000 owners who reported on 1.2 million vehicles up to ten years old. Of the 90 Japanese models reflected in the Consumer Reports brand comparison, 86 were average or better, with 35 earning the highest rating. Continue reading →

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GM and BMW Diagnostic Tool Counterfeiter Arrested in Virginia

Posted on 26 October 2012 by Ken Zino

The seller of Chinese-built counterfeit tools was indicted yesterday by a federal grand jury in the Eastern District of Virginia for alleged participating in a conspiracy to sell U.S. consumers more than $3 million worth of counterfeit General Motors (GM) and Bavarian Motor Works (BMW) automotive diagnostic tools, electronic keys and fobs. Continue reading →

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Daimler Posts Q3 Profit of €1.2 Million, a €155 Million Drop

Posted on 26 October 2012 by Ken Zino

The Eurozone crisis expanded into Germany in Q3 as Daimler AG (DAI) posted Group earnings of €1,921 million, off from Q3 in 2011at €1,968 million. Net profits for the period were €1,205 million (Q3 2011: €1,360 million), leading to declining earnings per share of €1.03 (Q3 2011: €1.21). Daimler sold 528,600 cars and commercial vehicles worldwide in Q3, surpassing the prior-year total by 1%. Revenue of €28.6 billion was 8% above the prior-year level. Adjusted for changes in currency exchange rates, the increase amounted to only 3%. As a result, of the weakened results and prospects for the future, Daimler said that it will not match 2011’s earnings. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars tried to be optimistic in a statement: “Considering the significantly more difficult market conditions, Daimler achieved good earnings in the third quarter.” The earnings release was sent out ahead of schedule because of the accidental issuing of an e-mail. Continue reading →

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Presidential Run Gets Uglier – Labor Ads “Romney a Traitor”

Posted on 25 October 2012 by Ken Zino

The United Auto Workers Union among other labor groups is applauding and promoting new advertisements that call presidential candidate Mitt Romney an economic traitor who desecrated teh American flag. The ads – both television and online were unveiled today by a front group called Workers’ Voice and Patriot Majority Continue reading →

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French Government Backs €7B in PSA Peugeot Citroën Debt

Posted on 24 October 2012 by Ken Zino

The French State will provide up to €7 billion in refinancing guarantees for new bond issues during the 2013-2015 period. It is the latest example of a taxpayer bailout of an ailing auto company facing increasingly limited credit options in the private capital markets, if they now exist at all. The subsidy is subject to EU approval by the Competition Commission in Brussels, and is vehemently opposed by the German state of Lower Saxony, the second largest owner of VW, the largest automaker in Europe by far. Continue reading →

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NADA Chairman Says Automakers Use Unfair Business Practices

Posted on 23 October 2012 by Ken Zino

The new chairman of the National Automobile Dealers Association, Bill Underriner, said today that automakers need to stop intruding into dealerships. After noting the Tigers are back in the World Series at the Automotive Press Association in Detroit, he said there’s “good energy here. The auto industry is doing its part to lead the economic recovery. But we still have a long way to go – not just here but all around the country. Auto sales are up, but financial pressures are too…especially on dealerships.” Continue reading →

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Ally Financial Sells Its Canadian Auto Financing Business

Posted on 23 October 2012 by Ken Zino

Notably absent as buyers were Ford Credit and General Motors. Ally has other international operations in Europe and Latin America on the block, and GM has submitted a bid for the business. Ally expects to announce the buyer after the U.S. Presidential election next month. Continue reading →

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BMW to Build a Car Plant in Brazil Prompted by Tough Legislation

Posted on 22 October 2012 by Ken Zino

The BMW Group plans to build a new auto plant in Brazil, based on the government’s new industrial policy under the so-called “Inovar Auto” legislation just adapted. The hard-nosed legislation strictly limits the amount of money that can be counted toward local content, imposes tariffs and requires specific R&D and production investments as a percentage of sales that increase from now until 2017. It is the latest example of protecting a local auto industry against pillaging by global companies in the view of supporters. Critics counter that consumers will pay higher prices. Continue reading →

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Toyota to Buy Cascade Corporation, a Leader in Materials Handling

Posted on 22 October 2012 by Ken Zino

Toyota Industries Corporation (Tokyo Stock Exchange: 6201) (“TICO”) and Cascade Corporation (NYSE: CASC) (“Cascade”) today announced that they have entered into an agreement under which TICO will acquire 100% of the shares of Cascade for $65 per share in cash. The transaction is valued at $759 million in the tender offer. The purchase price is a 23% percent premium over Cascade’s volume-weighted average share price for the last 60 days. No wonder, the buyout has been unanimously approved by the Boards of Directors of both TICO and Cascade. Continue reading →

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