| Toyota's Global Positioning Sweetens Prospects Chris Krasowski submits: The car maker from Japan, the country's largest, suffered a drop in August output, but the pride of Toyota City remains primed to continue its automotive leadership worldwide. Global output from Toyota (TM) fell around 9% year over year, but conditions economically are more stable and the additions of government programs, such as the U.S. Cash for Clunkers and Japan's subsidy program, are helping efficient automakers move more units.In fact, Toyota has reaped the biggest benefit of the majors from such programs and has raised its 2009 calendar year production run. The rise of 8% means the manufacture of 6.45Million vehicles total for this year. It was widely reported that Toyota owned the largest percentage of new vehicle sales under the Cash for Clunkers program in the United States, with the brand owning 3 of the top 5 new car spots, a testament to the message of Toyota as a fuel-efficient, safe and reliable car maker. Moreover, in Japan, Toyota enjoyed a 9% sales rise in August due to the Japanese subsidy program, that similar to the U.S, offered nearly $3000 towards the purchase of a fuel-efficient vehicle.Complete Story » seekingalpha.com |
Lear Corporation Q3 2009 Earnings Call Transcript Lear Corporation (LEA)Q3 2009 Earnings CallDecember 18, 2009 11:00 am ETComplete Story » seekingalpha.com |
Spartan Motors, Inc. Q4 2009 Earnings Call Transcript Spartan Motors, Inc. (SPAR)Q4 2009 Earnings Call TranscriptFebruary 18, 2010 11:00 am ETComplete Story » seekingalpha.com |
Was the GM Bailout a Success? Chip Krakoff submits:General Motors’ (MTLQQ.PK) return to profitability had to jostle for attention with other big stories in last week’s newspapers -- notably the burning of Bangkok, the resurgence of Iceland’s volcano, and the Greek crisis and bailout -- but it stood out nonetheless. Here was a bankrupt company, delisted from the New York Stock Exchange and deprived of its 83-year place in the Dow Industrial Average, now owned by an unholy trinity of the U.S. and Canadian governments and the United Autoworkers, showing a respectable first quarter profit almost exactly a year after it filed for bankruptcy protection. Although axing various brands like Hummer, Saturn, and Pontiac, closing plants, and laying off thousands of workers played a big part in the turnaround, no less significant was a nearly 50% increase in GM sales, from $22 billion in the first quarter of 2009 to over $31 billion in the first three months of this year.GM’s position – on its own and via several joint ventures – in the Chinese market is a big part of the story, but nowhere near as miraculous as the $1.2 billion quarterly profit of its North American operations, which seemed to exemplify all that was wrong about the company, from its arrogant and hidebound management to its ruinous labor practices and retirement benefits that by some estimates added $1,500 to the cost of every car. Who would have predicted that such a potent example of irreversible industrial decline could be so quickly…reversed?I was skeptical about the GM bailout/takeover from the beginning, and I gave voice to my apprehensions in this blog and elsewhere. I believed, and I still believe, that government has no business being in business, something the Swedes were ready enough to say when faced with the collapse of Saab, but which the Obama White House and the Congress were not. I also objected because GM’s senior creditors got a tiny fraction of what they were owed (and were denounced by the President as greedy speculators when they dared complain) while the union was handed a 17.5% ownership stake in the company (not worth much at that time, but likely to be worth a great deal if and when GM recovers).Honesty, however, obliges me to ask if my original assessment was wrong; if my view that government should keep its nose out of business is nothing more than a quaint superstition – like abolishing the Fed or returning to the gold standard – in an evolving “post-capitalist” world. Leaving aside the question of whether last quarter’s results confirm a rosy future for GM, shouldn’t the results be allowed to speak for themselves? Shouldn’t we judge the bailout at least a qualified success?Not so fast. As a shareholder, albeit minimally and involuntarily, I of course hope GM will succeed, but its success would prove nothing. Remember the $7,600 coffeemaker, the $700 toilet seat, and the $436 hammer that caused a military procurement scandal in the 1980s? No doubt the coffeemaker served up a perfectly adequate cup of java, but it probably wasn’t the most effective or least costly option. So the question is not so much whether the bailout will succeed, but how it stacks up against the alternative, which would have been to let GM go into bankruptcy without government assistance. First, we would have saved not only the $56.7 billion official price tag of the bailout, but also the $17 billion in TARP funds poured into the restructuring of GMAC (GMA), the finance arm of GM, as well as other items that may leave little change from $100 billion.Before going into Chapter 11, GM employed 91,000 people in the U.S., and has since cut nearly 23,000 jobs, bringing the current total to around 68,500. Supporters of the bailout argued that job losses would have been much greater if GM went into an unstructured bankruptcy, which could have led to liquidation, eliminating all 91,000 jobs plus as many as a million more in parts suppliers and other companies that depend on GM for their livelihood. But that outcome was never remotely likely; Americans buy a certain (if smaller) number of cars each year, most of which will be assembled in the U.S. with a high proportion of U.S. components. Whether those cars bear a GM or a Honda (HMC) nameplate is almost beside the point. Most of the famous British automobile marques that still exist are owned by foreigners and built mainly in places like China and India, but the auto industry employs an estimated 800,000 people in Britain, less than the one million plus of the 1960s, but a substantial number all the same. It’s just that they are making Nissans and Hondas instead of Morris Minors.My worst fears about the consequences of a government takeover of GM may never come to pass, but it’s probable that the most apocalyptic fears of the supporters of the bailout would not have materialized either. Having spent a fair chunk of my career nosing through the wreckage of state-owned companies in Africa and Eastern Europe, I can attest that the odds are highly stacked against the success of state ownership and management of businesses.So was I wrong? In the specific case of GM the answer is "maybe," partly. But in general, "no." A far more likely outcome of government bailouts is what happened to Chrysler, which in 1979, technically bankrupt, received government loan guarantees of $1.2 billion, and then limped along from one ill-conceived deal to the next for the subsequent 30 years until it went bankrupt for real, at which point the government once again stepped in with over $3 billion in loans and emerged sharing majority ownership with the UAW.It turns out that what our parents told us is true, for companies as well as individuals. If you never have to suffer the consequences of your mistakes, you will go on making them over and over again.Disclosure: No positionsComplete Story » seekingalpha.com |
CH Robinson Worldwide Q2 2010 Earnings Call Transcript CH Robinson Worldwide (CHRW)Q2 2010 Earnings CallJuly 27, 2010 5:00 pm ETComplete Story » seekingalpha.com |