Category Archives: financial results

U.S. Auto Sales Shift to Efficient and Less Profitable Cars

One potentially negative result because of the downsizing and easier credit trends is declining profits at automakers. The shift to smaller vehicles—in addition to the increase in financially less-qualified new–vehicle buyers, who tend to be younger and with less money to spend—means the average transaction price for new vehicles has dropped substantially in the recent quarter. Continue reading

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Ford Motor Pays CEO Mulally More than $29 Million in 2011

Ford Motor Company paid Alan Mulally, president and CEO, $2,000,000 in salary and $5,460,000 in cash bonus in 2011. Mulally’s total compensation, including the value of long-term stock options, was $29,497,572. Continue reading

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AIG Repays Taxpayers $1.5 Billion, Still Owes $45 Billion

During the financial crisis, overall support for AIG through Treasury and the Federal Reserve Bank of New York totaled approximately $182 billion. The remaining $45 billion investment consists of Treasury’s investment ($35.7 billion) for which it holds 1.248 billion shares of AIG common stock a whopping 70% of outstanding common stock. Then there is the Federal Reserve Bank of New York, which lent $9 billion to AIG. Continue reading

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Taxpayers Make Money on Treasury Bailout of Mortgages

While this is good news in a slowly recovering economy, taxpayers are still on the hook for billions upon billions advanced to Freddie Mac and Fannie Mae – up to $100 billion each in capital – to prop up their $5 trillion in outstanding mortgage debt, of which an unknown amount will never be repaid. Continue reading

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Ford Extends Its $9 billion Revolving Credit Line with Lenders

In a separate transaction, Ford announced its first renminbi-denominated bond issue aimed at RMB investors in Hong Kong, Singapore and elsewhere outside the United States, with total proceeds of RMB 1 billion or about USD $158 million. Ford is losing money in the Asia-Pacific region. In the fourth quarter of 2011, Ford Asia Pacific Africa reported a pre-tax operating loss of $83 million, compared with a profit of $23 million a year ago. Continue reading

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Ally Squeals after Flunking New Fed Capital Stress Test

Taxpayers still own more than 70% of Ally, with the owner – the Fed – saying it does not have enough capital to endure a theoretical recession that would produce an unemployment rate of 13% percent, a 21% drop in housing prices and as economic slowdowns in Europe and Asia. This admittedly severe test – surpassing even the Bush Administration’s dismal record of economic stewardship – may or may not be anything more than an academic exercise.

In what I take to be a gratuitous insult to taxpayers, Ally said, “Further, the Federal Reserve has not objected to the ongoing payments of preferred dividends and interest on the trust preferred securities and subordinated debt.”

Darn right we expect you to pay interest on the loans. Continue reading

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Volkswagen Group Posts Record 2011 Results – €11.3 billion

Consolidated operating profit rose to a record €11.3 billion, an improvement of €4.1 billion compared with 2010. This profit does not include the Group’s €2.6 billion (€1.9 billion) share of the operating profit of its communist-government-required Chinese joint ventures. These companies are accounted for in the financial result, which rose by €5.8 billion to €7.7 billion last year. Operating margin improved from 5.6% to 7.1%. Continue reading

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Airlines Profitable as Passenger Fees Continue to Rise

As part of their third-quarter revenue, the airlines collected almost a billion dollars – $898 million – in baggage fees and $603 million from reservation change fees from July to September 2011. Baggage fees and reservation change fees are the only ancillary fees paid by passengers that are reported to BTS as separate items. Other fees, such as revenue from seating assignments and on-board sales of food, beverages, pillows, blankets, and entertainment are reported in a different category with other items and cannot be identified separately. Continue reading

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BMW Group Posts Best Year in History – Ups Dividend

Strong sales of sport utility vehicles and luxury cars, the booming China market and cost cutting were all factors in the blowout year. The BMW Group continues to contradict the conventional wisdom that scale is required to succeed in the global auto industry, since it operates largely in premium segments or gets a premium for its products in other segments. Continue reading

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GM Buys 7% of PSA Peugeot Citroën to Share Parts, Vehicles

PSA already has partnerships with Ford on diesel engines, and Toyota, BMW, and Mitsubishi on components and engines. A previous GM venture started in Europe with Fiat in 2000 failed in 2005 when GM spent $2 billion to buy its way out of a put option in the deal that allowed Fiat to sell its automotive company to GM for market value. Globally, alliances have had mixed results at automakers. Continue reading

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Fisker Automotive Makes Tom LaSorda CEO

Nevertheless, the future of Fisker is not clear. In 2010, the U.S. Energy Department awarded Fisker $529 million in loans as part of an effort to help development of so-called advanced-technology vehicles. Part of the loan was for redeveloping a closed General Motors plant in Wilmington, Delaware – home state of vice president Joe Biden – to build a small electric car, code named Nina – that has yet to appear. Fisker said that about one-third of the total loan amount – $190 million – has been drawn, mostly for Karma design and development. Continue reading

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GM Annual Report Says No Dividend is Planned for Common

Even though GM common stock traded as high as $39.48 a share – arguably irrational exuberance by small investors after what now appears to be a high IPO price of $33 in November of 2010 – the financial condition of the GM is not strong enough to distribute money to common shareholders. This affirmation comes even though GM posted a record $9.1 billion profits in 2011. Continue reading

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Volkswagen Group Posts Record Profit of €11.3 Billion

Volkswagen Group is now the second largest vehicle maker in the world behind General Motors Company and just ahead of Toyota Motor Corporation, which struggled to maintain production because of natural disasters last year. GM earned a record € 6.78 billion ($9.1 b) in 2011; Toyota – on the Japanese fiscal year that ends in March of 2012 had profits of €1.50 billion (¥162.5) during first 9 months. Continue reading

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PSA Peugeot Citroën in Alliance Talks with GM

Neither General Motors nor PSA have officially confirmed the talks, other than to say that discussions with other automakers routinely occur. Last week Peugeot posted weak results as Group operating income declined to €1,315 million from €1,796 million in 2010. GM has been losing money at Opel for more than a decade – $700 million in 2011 alone. Continue reading

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GM to Freeze U.S. Pension Plans and Convert to 401Ks

GM’s global pension plans were underfunded by $24.5 billion, an increase from $22.2 billion at the end of 2010, GM reported today in its year-end results. Of that potentially crippling debt $13.4 billion is in the U.S. Continue reading

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