| GM: What Its Progress Report Doesn't Say Rick Newman submits:General Motors has some genuine good news. The automaker's June 1 bankruptcy filing hasn't been nearly as ruinous as GM executives once feared. New vehicles like the Chevrolet Camaro, Cadillac SRX and Buick LaCrosse are wowing reviewers and drawing buyers. The Chevy Volt, an electric plug-in that could help move the car industry away from gas-powered engines, remains on track for launch late in 2010. Fewer dealers and a streamlined workforce are finally bringing GM's size in line with its customer base. But unlike its rival Toyota (TM), GM has a long history of exaggerating its virtues and denying its liabilities. Since GM is now a privately owned company, CEO Fritz Henderson's recent briefing on GM's progress offered useful insight into the company now 60 percent-owned by American taxpayers. But there's more to the story. Here are a few important things Henderson didn't mention:Complete Story » seekingalpha.com |
YRCW Avoids Bankruptcy, Serious Challenges Remain Ockham Research submits: Trucking services firm YRC Worldwide (YRCW) was able to complete the necessary debt for equity swap with its bondholders in a deal that came down to the wire after six extensions were required. The deal will convert debt into 37 million shares of common stock and 4.35 million of class A convertible preferred shares, allowing YRC to avoid paying $19 million in interest payments and fees. Also, this deal will permit them to tap into $160 million from its credit facility which should enable operations to continue. Of course, management is heralding this as a means to a turnaround, but they will need to find a way to slow their cash burn quickly or it could be just a band-aid for a company that has lost $17 billion over the last 5 quarters. Industry analysts such as David Ross of Stifel Nicolaus had speculated that if this agreement with bondholders the company would have been required to close its doors as early as this weekend. That cannot inspire confidence in the businesses who rely on YRCW to transport their goods, and whose merchandise would be in limbo if the company were to shutter operation. The negotiations with creditors have been made quite public over the past few weeks, with multiple extensions needed to come to agreement. Excess capacity in the transportation services sector would suggest that YRCW clients would be foolish not to at least investigate other alternatives in the event that they do need to file bankruptcy in the near future. Competitors of YRCW have reported business is improving so some may already have started to defect.Complete Story » seekingalpha.com |
Toyota’s Best Strategy From Here Andrew Butter submits: What was happening at the grilling of the President of Toyota (TM) was pretty clear early on. When I tuned in, the chairman of the committee was explaining that she owned a Camry Hybrid, and that the only reason she had bought it was that, although she has wanted to buy American, the American manufacturers didn’t make that model. One of the inscrutable Japanese executives remarked, quite innocently, that the car she had bought was American.“Ah…err…but it has your (dirty Japanese) name on it”“Yes but it was made in America using American made components with American workers”Complete Story » seekingalpha.com |
Bombardier: Revenues, Earnings Slide in Q1 Bombardier (BDRAF.PK) reported on its Q1 performance today, saying both of its groups performed well despite declines in revenues and earnings, which fell from C$4.5 billion to C$4.2 billion and from C$235 million to C$224 million, respectivel. Conditions in the jet market are showing signs of stabilization with the level of business aircraft cancellations decreasing.Net income reached C$153 million, compared to C$158 million for Q1 2010. Diluted earnings per share (EPS) were C$0.08 for Q1 2011, compared to $0.09 for the equivalent period of the previous year. The overall backlog totalled C$44.4 billion, compared to C$43.8 billion as at January 31, 2010.Complete Story » seekingalpha.com |
Three Reasons It May Take Tesla Years to Climb Higher Timothy Lutts submits: While Thomas Edison is arguably the best-known American inventor, a cult following has grown up around Nikola Tesla, the Serbian engineer whose skills as an inventor, perhaps superior to Edison’s, were undermined by his inferior business sense. And this cult may have reached its peak on June 29, when the electric car company named Tesla Motors (TSLA) came public, raising $226 million from investors large and small who see great profit potential in the business.Complete Story » seekingalpha.com |