Breakingviews

Tech drive strips old-school carmakers of clout

By Breakingviews Columnists
March 2, 2015

Apple is the latest to take an interest. From Tesla to Google, the shift to connected, self-driving vehicles may take a while, but it could shake up everything from systems to materials to car usage. The winners may be able to rev up returns far higher than current performance.

Mary Barra gets a second first year at GM’s wheel

December 24, 2014

The carmaker’s ignition-switch fiasco crashed her debut as CEO. The crisis may, though, have speeded up much-needed changes. Barra needs to show these will stick. She also has to prove the Motown firm is prepared for what may be some of the biggest changes the industry has faced.

GM can find small comfort in Toyota’s ride

April 1, 2014

The U.S. automaker recalled more cars and doubled the estimated cost for the first quarter ahead of boss Mary Barra’s Capitol Hill grilling. Even so, Toyota’s recent fiasco suggests the financial fallout should be manageable. GM’s culture will be harder to repair.

GM navigates smart route to CEO succession

December 10, 2013

New boss Mary Barra has a reputation for both good design and keeping a firm handle on costs. That’s what the automaker, freshly liberated from the U.S. government, needs as it chases more profitable rivals. GM also appointed an independent chairman for good governance measure.

U.S. Treasury stake not the millstone GM makes out

September 17, 2012

The automaker argues the government’s 26.5 pct ownership hurts its image and its ability to hire people. The former is overblown, the latter manageable. And Uncle Sam isn’t weighing heavily on the company’s stock price, either. The Treasury can afford to exit on its own schedule.

U.S. natural gas looks irresistibly cheap vs oil

March 5, 2012

With crude prices rising and gas sliding further, oil is now eight times dearer than gas based on energy content - the biggest gap since the 1950s. Global shifts dictate the price of the black stuff but, as news from Detroit shows, local market forces should work on American gas.

Would President Romney sell Uncle Sam’s GM stake?

February 16, 2012

Sure, governments should try not to hold stakes in private firms. But selling now, as Political Romney just proposed, would cost taxpayers $14 bln. That’s a hit Private Equity Romney would surely avoid. As long as D.C. leaves GM alone, it’s smarter to wait for a better price.

GM needs to double earnings to repay taxpayers

August 18, 2010

General Motors' much anticipated initial public offering filing finally landed on Wednesday. But investors shouldn't get too caught up in the hype. Sure, the automaker looks in pretty decent shape thanks to last year's bankruptcy clean-up, and car sales are motoring away from last year's lows. But to repay U.S. taxpayers in full, GM needs to at least double its earnings.

Get ready for EBITDAPO

June 28, 2010

What's the best way to value General Motors as it prepares to go public again? The usual price-to-earnings ratio seems to have lost favor with bankers, as has enterprise value-to-sales, an auto industry favorite. Instead, GM's advisors are plumping for enterprise value as a multiple of something called EBITDAPO.

General Motors’ new start not as fresh as it looks

April 7, 2010

The new start at General Motors isn't as fresh as it looks.