TOP 100 TRANSPORTATION AND LOGISTICS SITES
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| Why are Banks Playing Hardball with Chrysler? Ryan Avent submits: The American government is notably trying to help Chrysler through a difficult situation (for better or worse). This involves attempts to get concessions from many of the automaker's stakeholders, including labor and suppliers. And, of course, creditors. Unfortunately, they're not playing ball. Having offered Chrysler's creditors 15 cents on the dollar, the government found itself with an aggressive response -- a mere 35% write-down and equity in the company, among other things. Felix writes:JP Morgan, Citigroup, Goldman Sachs, and Morgan Stanley between them hold $4.3 billion of the $6.9 billion in debt, and are ultimately calling the shots. They're saying that they're perfectly happy to see Chrysler descend into a chaotic and destructive liquidation, because they'll still end up with more money that way than they would if they accepted the government's offer.Complete Story » seekingalpha.com |
Obama's Auto Incentives Are Off the Mark Casey B. Mulligan submits: The AP reportsConsumers could receive rebates of up to $4,500 for turning in their gas-guzzling cars and trucks for more fuel-efficient vehicles under a House proposal.Complete Story » seekingalpha.com |
Sonic Automotive Q2 2009 Earnings Call Transcript Sonic Automotive, Inc. (SAH)Q2 2009 Earnings CallJuly 28, 2009 11:00 am ETComplete Story » seekingalpha.com |
Cash for Clunkers: It Actually Worked The "cash-for-clunkers" program has been the subject of more negative comments and bad puns than anything an administration has put out for a long long time. Most of the comments have focused on the program's inevitable failure to permanently raise the level of spending for autos and/or anything else. By extension, the reaction is that Obamanomics is a complete bust. Political rage absent of thought to other possibilities is not the best way to go through life, unless your goal is to get crankier as you get older. The chart below plots out auto industry inventories, sales, and the inventory/sales ratio.The cash for clunkers program moved the auto industry out of depression and into recession at an extraordinarily rapid pace. This saved a lot of investors, public and private, a lot of money. We can see now that the program was never really intended to be a permanent boost to sales, I think even Larry Summers and Ben Bernanke knew that. The cash for clunkers trade was meant to alleviate an extraordinary overhang of unsold cars under which an entire industry was about to collapse. Normal recession metrics for sales, inventories, and production are now in play and they will be for some time but the government accomplished what it set out to do -- saving an industry and giving it the time to do what's necessary to save itself short-term and for the long haul. It will be a while before we know whether the auto industry finally gets it right, but at least they now have the time to figure it out.Complete Story » seekingalpha.com |
Is the World Really Flat for Airlines? Robert Salomon submits: I have enjoyed reading Thomas Friedman’s work over the years, but I have to say that I am not a big believer in the Flat World hypothesis. Although intellectually appealing in many ways, it is not supported by scientific evidence. Decades of international business research has demonstrated that companies that span national boundaries face enormous risks and challenges. Moreover, a casual glance at the popular press on just about any given day provides countless examples of companies whose international expansion efforts have foundered because they failed to account for the additional costs imposed by institutional distance (for background, see my posts So You Want to Do Business in a Developing Country, Tata and Jaguar, Tesco’s Venture into the U.S.). In fact, just this week I received an email from Mike Malone of ABC News calling my attention to a recent article addressing the Flat World debate (see Navigating a Flat and Bumpy World). Mike writes:Complete Story » seekingalpha.com |