Breakingviews

A fat and happy GM is a dangerous company

February 12, 2015

It’s an irony bordering on conflict of interest that Harry Wilson, who helped Uncle Sam convert debt to equity in bankruptcy, is pressing the carmaker to reduce its cash cushion. Yet absent externally imposed fiscal discipline, GM runs the risk of repeating mistakes of the past.

Rob Cox: When CEOs are worth more as former CEOs

February 5, 2015

Investors this week applauded the abrupt exits of bosses at Ally and Petrobras, whose market value surged by $8 bln. Ousters at McDonald’s recently and Microsoft in 2013 earned similar welcomes. The common thread seems to be relief after a CEO becomes entrenched and inflexible.

Rob Cox: It took the Grim Reaper to restructure GM

January 14, 2015

The carmaker’s swift bankruptcy sparked less soul-searching than the process of determining who died from faulty ignitions. Bringing Ken Feinberg in will go down as CEO Mary Barra’s smartest decision. She should go a step further and memorialize the dead in the lobby of GM’s HQ.

GM’s former finance arm better suited for IPO

February 22, 2012

The business now known as Ally is now considering a sale - and it would fit well with some banks or even its previous owner. But the ResCap unit remains troubled. And at $25 bln, it’s no easy deal in this environment. Waiting for an opening in public markets is a better option.

Peugeot’s $1.3 bln cash call inspires confidence

March 7, 2012

Underwriters sought a 32 pct discount to the theoretical ex-rights price for the carmarker’s fundraising in its alliance with GM. That seems steep, but reflects a challenged industry. Indeed, for a company raising a third of its market value, the 6 pct share price drop is muted.

Ally’s mortgage misery needs a clean ending

March 27, 2012

The home loan mess still ails GM’s ex-finance unit and is still hampering its ability to repay $14 bln of taxpayer aid. Bankruptcy should be the ideal solution. But as an activist investor points out, that could get messy. Without greater clarity, Ally may want to hold fire.

White House in a pickle over its GM exit plan

April 20, 2011

It's no secret the Obama administration would prefer to offload the U.S. government's remaining stake in General Motors. Adding a successful exit from at least one of the automakers it bailed out to the profits made on Uncle Sam's banking exploits would be a handy feather in the president's cap as the election season heats up.

CFO departure throws spanner in GM’s gears

March 10, 2011

General Motors is starting to look careless with its senior executives. Last August Ed Whitacre stepped down as CEO after only a few months on the job and right before the automaker was set to go public. Now the Motown manufacturer has lost its well-regarded finance chief Chris Liddell.

Fiat pegs Chrysler as most undervalued carmaker

January 14, 2013

CEO Sergio Marchionne’s latest offer to buy a stake in Chrysler from the UAW trust sets the U.S. manufacturer’s worth at $6 bln. True, it lacks the cash and margins of Ford or GM. But it’s a purer play on a recovering U.S. market. Fiat can safely value Chrysler more generously.

Investors shouldn’t get too sweet on dolled-up GM

November 10, 2010

GM's $2 billion profit is impressive, but the quarterly results have been boosted in ways that will be hard to reproduce.