Category Archives: news analysis

Bankrupt Hawker Beechcraft Pensions Only 56% Funded

Collectively, Hawker Beechcraft’s three pension plans are only 56% funded, with $769 million in assets to cover $1.4 billion in benefits. If Hawker Beechcraft ended the plans under the bankruptcy, the Pension Benefit Guaranty Corporation of the U.S. Federal government would pay $533 million of the $611 million shortfall. PBGC is the company’s largest creditor. Continue reading

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U.S. Treasury to Sell $5 Billion of AIG Stock. Taxpayers Still Owed $39 Billion from Controversial Bailout of Company

Today’s announcement is part of Treasury’s ongoing efforts to wind down the Troubled Asset Relief Program (TARP). More than 81% ($338 billion) of the $415 billion funds disbursed for TARP have already been recovered to date through repayments and other income – before including any expected proceeds from today’s announcement.

Ideologues will never admit it, but TARP is looking like an effective government intervention in the failed capital markets. Little has been done to make sure that it does not happen again in the view of critics. Continue reading

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April Marks Third Straight Month of Declining U.S. Job Growth as Unemployment Remains at an Official and Understated 8%

The struggling U.S. economy added a measly 115,000 jobs last month, the third straight month of declines in job growth. More than 15 million Americans are unemployed or underemployed. This poor performance comes years after Washington declared the recession caused by the reckless and unpunished practices of Wall Street officially over. Continue reading

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GM Makes $1 Billion in Q1. Down from $3.2 Billion in 2011

GM stock has been trading $22-$23 range, well down from the $33 level of GM’s 2010 initial public offering, to say nothing of what is happening to small investors who subsequently bid the stock – which pays no dividend – up to $39 before reality took hold. Continue reading

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Offshore Brands Down Slightly in U.S. Market Share in April

Auto brands from offshore automakers held a 55.3% of the U.S. auto market in April, a slight decrease from a 56.3% in March. In raw numbers this accounted for 654,086 units, compared with 791,169 in March.

This is hardly a ‘Buy American’ trend though, because in the first four months of 2011, foreign-owned brands averaged a strong 55.6% share of the U.S. auto market. Simply put the Detroit Three in spite of the demonstrably best most fuel efficient car offerings in history haven’t laid a glove on the invaders. Continue reading

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PBGC, Bendix Reach Settlement, End Litigation over Pensions

Critics of the federal agency say it has been lax and ineffective in protecting pensions. Under today’s settlement, PBGC won’t require Bendix to put up collateral for the remaining $8.4 million in pension liability, provided the company remains financially strong until the end of the year. Continue reading

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Ford Motor U.S. Sales Drop 5% in April. Car Sales off 11%

Ford Motor U.S. sales decreased 5% in April to 180,350 vehicles, with car sales dropping 11% at 64,790. Fleet sales were 37% of the mix. Overall, Ford Motor Sales were buoyed by trucks and sport utilities, but Ford is now facing a strong challenge from Toyota Motor Sales, which is expected to be up almost 12% in April when Toyota reports later today. Toyota is closing in on Ford’s Number Two U.S. sales ranking. Continue reading

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Air Fares Soar 10% in Q4 as 2011 Prices Highest on Record

The slow economic recovery the U.S. is enduring isn’t all good for embattled consumers as the average price of U.S. domestic air fares increased to $368 in the fourth quarter of 2011, up 10% from $335 in the fourth quarter of 2010, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today. The latest price hike was far above $320 average fare during the same period in 2009 as the Great Recession took hold. Continue reading

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Ford Motor Q1 Profit $2.3 Billion, Down $500 Million

With successful businesses in North America ($ 2.1 billion profit) and Ford Credit ($452 million profit), Ford has now been profitable on a pre-tax operating basis for 11 consecutive quarters. The North American operating margin was 11.5% compared to overall results of a 6.4% margin. Continue reading

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Ford Moves to Decrease Its $15 Billion in Unfunded Pensions

Ford took another step today to solve its huge problem with unfunded global pension plans, by announcing that it will offer to about 90,000 eligible U.S. salaried retirees and U.S. salaried former employees the option to receive a voluntary lump-sum … Continue reading

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Another DENSO Exec Guilty of Price Fixing and Bid Rigging

According to the latest charge, Hattori participated in the conspiracy from at least as early as July 2005, until at least July 2008. During the conspiracy, Hattori was an assistant manager in the Toyota Sales Division at DENSO from July 2005 until December 2006, and a manager in the Toyota Sales Division from December 2006 until at least July 2008. Continue reading

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Mazda BT 50, Ford Ranger Pickup Capacity Upped in Thailand

Ford Motor, of course, once dominated the compact pickup truck market in the U.S. until years of product neglect combined with an assault by Toyota and Nissan pushed it to a footnote in the segment. This first forced the closing of Ford’s Edison, New Jersey plant. The remaining plant in Minnesota did not survive the Ford UAW contract last year. It was and remains a stunning amount of business to cede to the competition. Continue reading

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Chrysler Provides Most of Q1 Fiat Group Profits of €866m

The weak consolidated Fiat-Chrysler Group return of 4.2% on sales of more than €20 billion stood in stark contrast to Chrysler Group’s return of 7% on €872 million in revenues during the quarter reported earlier in the day. Simply put, courtesy of U.S. and Canadian taxpayers, a reorganized Chrysler, now 58.5% owned by Fiat, is providing the profits for the newly created Fiat-Chrysler Group. Continue reading

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AutoNation, Penske Report Strong Q1 Earnings from Dealers

The two largest auto dealer groups operating in the United States reported large increases in Q1 earnings and profits today. It was the latest sign that a slow recovery is well underway in the auto industry. However, the new luxury vehicle business, where broken out, had relatively weak results compared to other segments. Luxury cars, of course, were once thought to be recession proof and discount proof, but that is no longer the case as discounts are increasing along with competition from non-luxury autos with high levels of equipment. Continue reading

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Fitch says Ford Motor Company Debt is No Longer Junk

Fitch Ratings has upgraded the Issuer Default Ratings (IDRs) for Ford Motor Company (Ford) and its Ford Motor Credit Company LLC (Ford Credit) captive finance subsidiary to BBB- from BB+. This means that Ford Motor and Ford Credit debt is investment grade for the first time since 2005 when Ford Motor was losing billions of dollars. Continue reading

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