Autoblog

Ford family keeps special voting rights

Jonathon Ramsey — Fri, 10 May 2013 18:30:00 EST

Filed under: Etc., Hirings/Firings/Layoffs, Ford

Ford Motor Company has a dual-class stock structure of Class A and Class B shares. The roughly three billion Class A shares are for the general public like you and me, while the roughly 71 million Class B shares are all owned by the Ford family. Each Class A share gets the shareholder one vote, each Class B share is worth 16 votes, the result being that Common Stock holders control about 60 percent of the company while the Ford family controls 40 percent even though it holds far fewer shares. The only way that could ever change would be if the Fords sell their Class B shares, but even so, Class B shares revert to Class A when sold outside the family, so they'd have to sell a whole bunch of them.

A contingent of Class A shareholders think the dual-class system is unfair, and for the past few years a vote's been held during the annual shareholders meeting to end it. It has failed every time, as it just did again during the meeting held this week. A smidge over 33 percent voted to end the dual system, outvoted by the 67 percent who are happy with the way Ford is going - unsurprising in view of a corporate turnaround that will be part of business-class curricula for years to come.

On the sidelines, Ford elected Ellen R. Marram to the post of independent director, the first woman to hold the job. The former Tropicana CEO and 20-year Ford board member replaces retiring board member Irvine Hockaday who helped bring Alan Mulally to the CEO position.

Ford family keeps special voting rights originally appeared on Autoblog on Fri, 10 May 2013 18:30:00 EST. Please see our terms for use of feeds.

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Why Tesla will need more loans to make it through 2013

Jonathon Ramsey — Fri, 28 Dec 2012 08:44:00 EST

Filed under: Earnings/Financials, Tesla

It's fun to bet against Elon Musk and Tesla - that's the best reason we can find for so many people doing it even though the man, his company and his cars are still here and still very popular. The latest name inscribed in the column labeled "Skeptical of Tesla" is John Shinal at Market Watch who, in year-end commentary on Tesla's financials, says that the "carmaker's financials are reminiscent of a dot-com's." He does not mean that in the good way.

To be fair, Shinal isn't exactly betting against Tesla, he's saying that if you check the bottom lines, the only thing keeping Tesla alive is the hundreds of millions in Federal Department of Energy loans it has received. Based on its filings, he says the company has less than six months of cash on hand, hasn't produced as many cars as it promised and had to lower its revenue forecast for 2012, has had a "year of net losses and negative operating cash flow," and was underwater by at least $37 million at the end of the third quarter.

But Shinal's not done there, summarizing Tesla as an operation with "a poor habit of failing to deliver to customers the cars it has promised them, while simultaneously raising the prices of those yet-undelivered cars," and "a lousy level of customer service." He says there are more damning things to be found in Tesla's SEC registration settlement from September, but we'll have to wait for his next column to find out what those are. The takeaway, in Shinal's opinion, is that even though Tesla will keep getting money from the government, that investors have no business dealing in Tesla stock.

Early in his piece, Shinal says Tesla's financials are worse than those of Zynga and Groupon, two hot dot-coms that have fallen on their faces since their IPOs. Shinal knows far more about finances than we do, but we wonder if it makes the most sense to compare a brand new car company developing brand new technologies - with the colossal amounts of up-front cash each one of those things requires, and a company with Tesla's record so far - to a social media game developer and an online coupon distributor. Head over to Market Watch to read the full piece.

Why Tesla will need more loans to make it through 2013 originally appeared on Autoblog on Fri, 28 Dec 2012 08:44:00 EST. Please see our terms for use of feeds.

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Ford reports 58% drop in Q2 profits on European losses

George Kennedy — Wed, 25 Jul 2012 10:58:00 EST

Filed under: Car Buying, Europe, Ford, Lincoln, Mercury

Ford Motor Company announced Wednesday that it has posted a $1 billion profit for the second quarter of 2012. That sounds like good news for the Blue Oval, until you take into account that Ford posted a $2.4 billion profit for Q2 a year ago. That is a substantial 58 percent loss.

Ford also posted $465 million in international losses, with $404 million of those losses coming directly from Europe. The automaker also increased its European loss projections to $1 billion for 2012, due in large part to the economic crisis overseas, which has resulted in increased unemployment and decreased consumer confidence.

The $404 million loss actually beat out loss projections for this quarter, based on estimates from a month ago. The result was a 1.8 percent increase in Ford's stock, based on pre-market trading this morning.

Ford's North American unit posted a profit of $2 billion in Q2 - the second economic quarter in a row in which the company posted profits in excess of $2 billion.

Additionally, the investor service Moody's returned the Blue Oval's investment grade to its 2006 status. If you recall, that was when the company leveraged nearly everything, allowing it to avoid government bailout. Before this news, Fitch Ratings had restored Ford's investment grade as well.

Continue reading Ford reports 58% drop in Q2 profits on European losses

Ford reports 58% drop in Q2 profits on European losses originally appeared on Autoblog on Wed, 25 Jul 2012 10:58:00 EST. Please see our terms for use of feeds.

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Blue Oval no longer in hock as Ford credit rating upgraded

Jeff Sabatini — Tue, 22 May 2012 18:30:00 EST

Filed under: Ford, Earnings/Financials

Moody's upgraded Ford's credit rating to investment grade today, the final step for the company to be able to reclaim its Blue Oval. Ford had offered its globally recognized trademark as part of a 2006 loan package. According to the Detroit Free Press, the collateralized logo and the rest of Fod's assets and intellectual property would not return to the automaker until it achieved an investment-grade credit rating with at least two of the three major agencies. Last month, Ford's credit was upgraded by Fitch.

At the time the loan was issued, the move was viewed as bold and risky, as Ford literally bet the farm that it could pay back the $23.5 billion. But as it turned out, the automaker's head start on restructuring allowed it to weather the financial crisis and resultant industry downturn in 2008 without declaring bankruptcy and needing government intervention like its cross-town rivals.

The upgrade from Moody's is said to potentially help Ford by lowering its borrowing costs, and certainly having its assets back should allow everyone in Dearborn to sleep peacefully tonight.

Scroll down to read Ford's official statement.

Continue reading Blue Oval no longer in hock as Ford credit rating upgraded

Blue Oval no longer in hock as Ford credit rating upgraded originally appeared on Autoblog on Tue, 22 May 2012 18:30:00 EST. Please see our terms for use of feeds.

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Ford no longer junk at Fitch as bonds return to investment grade

Jonathon Ramsey — Wed, 25 Apr 2012 13:01:00 EST

Filed under: Ford, Earnings/Financials

No doubt Ford has seen the light shining at the end of its turnaround plan for a while, but now The Blue Oval is getting so close to the daylight it might even be able to smell the fresh air. By the end of 2005, Ford bonds were rated so low by the three major ratings agencies they was floating in the cistern below the basement of junk status. After Mulally came onboard, the company put up everything to get the money to work his plan, from the company logo to its real estate. In order to get it back, two of the three agencies need to rate Ford bonds as investment grade, and one, Fitch, has just done so.

Fitch has certified Ford bonds as BBB-, the first investment-grade level, and issued a stable outlook for the company and its finance arm. Ford remains just one step below investment worthy with both Standard & Poor's and Moody's, but with "a solid Q1" predicted by by Citigroup and Morgan Stanley analysts (they expect earnings to match Q1 2011 in spite of European and Asia-Pacific sales doldrums), the final turn might not be far away.

When it does, Ford will have achieved what it laid out as Job One for 2012. As well as getting its assets out of hock, Dearborn will also greatly reduce its borrowing costs. Ford's head of investor relations, Michael Seneski, vowed in December that Ford would return to investors' good graces by showing "authoritative and highly credible insight into our automotive business and Ford Credit." We're of the opinion that an increasing flow of good products haven't hurt, either.

Ford no longer junk at Fitch as bonds return to investment grade originally appeared on Autoblog on Wed, 25 Apr 2012 13:01:00 EST. Please see our terms for use of feeds.

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GM leads worst performing auto stocks of 2011

Jonathon Ramsey — Tue, 03 Jan 2012 10:29:00 EST

Filed under: GM, Earnings/Financials

In spite of General Motors standing poised to retake the top sales spot, Chevrolet perhaps breaking its all-time sales record, and an anticipated Buick and two new Cadillac models coming, GM's stock price got beat like a goat in 2011. On January 2, 2011 the stock traded at $37.06, on January 2, 2012, it hovered a few dimes above $20, making GM the worst-performing auto-industry stock of 2011: with a 46.1-percent drop, it edged out Cooper Tire (-41.7), TRW Automotive (-40) and Ford (-37.3).

The Motley Fool suggests the decline could be due to the Treasury's ownership of hundreds of millions of shares, keeping investors wary about buying. Europe is also considered a sore spot, with GM's operations on The Continent still in the red and there being no clear plan to turn that around (particularly with the Euro threatening to implode).

However, there is most likely more to it than that: many investors likely remaining unsure about company fundamentals, and they are likely concerned that GM (like Ford) is rated just below investment-grade by Moody's rating service, which keeps some large institutional investors out of the pool. The good news for 2012: The General' stock is trading at five times less than earnings and the outlook from all observers is uniformly positive.

GM leads worst performing auto stocks of 2011 originally appeared on Autoblog on Tue, 03 Jan 2012 10:29:00 EST. Please see our terms for use of feeds.

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Ford reinstates dividend, first one in half-decade

Jeff Sabatini — Thu, 08 Dec 2011 15:29:00 EST

Filed under: Ford, Earnings/Financials

In another sign of its success, Ford has announced that it will be paying out a quarterly dividend, the first time it will do so in over five years. The five-cents-a-share dividend will begin on March 1, 2012.

According to The Detroit Free Press, the move will cost Ford about $200 million per quarter. Ford is the first Detroit carmaker to pay a dividend on common stock since General Motors suspended its dividend in 2008. GM has been paying dividends on preferred stock this year.

Ford's stock remains just below investment grade, but Ford officials think resuming paying a dividend should help signal the company's financial strength.

Continue reading Ford reinstates dividend, first one in half-decade

Ford reinstates dividend, first one in half-decade originally appeared on Autoblog on Thu, 08 Dec 2011 15:29:00 EST. Please see our terms for use of feeds.

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Delphi planning $550M IPO

Chris Shunk — Mon, 07 Nov 2011 08:32:00 EST

Filed under: Plants/Manufacturing, Earnings/Financials

It took Delphi four years to exit bankruptcy, but after a major restructuring and staggering losses, the parts maker is once again ready to sell shares to the public. The Detroit News reports that Delphi will offer a $550-million stock offering later this month. The move comes after Delphi announced in May of 2011 that it would seek an Initial Public Offering, though the $550 million sum is nearly half of the originally announced $1 billion IPO.

Though Delphi suffered massive losses over the past decade, the past two years have been very solid. The parts maker made $703 million in 2010, and through nine months of 2011 Delphi has earned $911 million. Investors will likely like the fact that the $911M in profits came on only $12.1 billion in sales. That's a very healthy margin of 16.3 percent, and with auto sales seemingly only going up, future profits could look even more impressive.

Delphi's labor costs are another reason for the vastly improved profits margins. Delphi got rid of 45,000 U.S. employees during bankruptcy, and now 90 percent of the auto supplier's workforce is located in low-wage countries. That's not a good sign for U.S. manufacturing jobs, but it's likely exactly what investors want to hear.

Delphi planning $550M IPO originally appeared on Autoblog on Mon, 07 Nov 2011 08:32:00 EST. Please see our terms for use of feeds.

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Williams F1 team considering IPO stock issue

Noah Joseph — Mon, 24 Jan 2011 08:57:00 EST

Filed under: Motorsports, Earnings/Financials

Rubens Barrichello tests the Williams FW32 with new Pirelli tires at Yas Marina Circuit in Abu Dhabi

What's the best way to make a small fortune in Formula One? Arrive with a large one. Williams has another idea though, and it's a radical one in the field of motor racing: The British outfit may float shares on the stock market.

Williams insists the idea is being considered in order to secure a long-term future (as its team principals are some of the oldest on the grid) and not as an effort to raise funds in the short term. After selling part of the team to Austrian investor Toto Wollf, it suffered from the departure of a number of sponsors at the end of last season. But the team insists its budget is secure for the coming championship, having recently announced a deal with Venezuelan oil company PDVSA that followed the signing of Venezuelan driver and reigning GP2 champion Pastor Maldonado to replace Nico Hülkenberg for next season.

The Williams group consists of more than just the F1 team, encompassing Williams Grand Prix Engineering as well as the hybrid development business Porsche used for the 911 GT3 R Hybrid, the development and construction of the Formula 2 chassis and separate operations in Qatar, which would ostensibly all be part of the IPO if the company decides to go ahead with the move. At the moment, however, Frank Williams and company appear to be dipping their proverbial toes in the water. Follow the jump for the official statement.

[Source: Williams | Image: Glenn Dunbar/LAT/Williams]

Continue reading Williams F1 team considering IPO stock issue

Williams F1 team considering IPO stock issue originally appeared on Autoblog on Mon, 24 Jan 2011 08:57:00 EST. Please see our terms for use of feeds.

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Tata out to raise $1 billion to reduce debt and expand JLR product line

Jonathon Ramsey — Wed, 07 Jul 2010 06:58:00 EST

Filed under: Jaguar, Land Rover, Earnings/Financials, Tata

2011 Jaguar XJ - Click above for high-res image gallery

Ford spent a fortune to buy Jaguar in 1989 and Land Rover in 2000, then spent billions on each of them getting them into fighting shape. Tata spent billions to buy JLR in 2008, and has since been raising and spending billions to retain their fighting shape and get them even fitter. The Indian firm is planning a funding round via shares, equity and the like in order to scare up another $1 billion.

Tata is a massive conglomerate and the funds will go to reducing the company's overall debt-to-equity ratio, but the number we were most interested in was £600 million pounds - almost the entire amount of the funding round, $908 million. That's the amount Tata says it will spend this year on new product development at at JLR.

In May we were told that Tata would invest £1 billion per year on JLR, but we won't quibble about being short £400 million for now with the Evoque, a meaner XKR, an XE and maybe also an F-Type being forged. So even if the Ford and Tata initial experience with JLR sound familiar, we give Tata credit: for all those billions they're spending, there isn't an X-Type in sight.

Gallery: First Drive: 2011 Jaguar XJ

[Source: Bloomberg]

Tata out to raise $1 billion to reduce debt and expand JLR product line originally appeared on Autoblog on Wed, 07 Jul 2010 06:58:00 EST. Please see our terms for use of feeds.

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Report: GM gives $6.66M in stock to 14 top execs

Jonathon Ramsey — Sat, 03 Jul 2010 14:08:00 EST

Filed under: Earnings/Financials

Soon-to-depart pay czar Kenneth Feinberg limited the cash remuneration available to General Motors executives, making stock options a go-to supplement for company leaders. It was reported last month that GM would hand out enough shares to top brass to create a $13 million payday for those on the list, with the windfall being totally dependent on the share price when the inevitable IPO hits.

Current numbers in BusinessWeek have revised that potential payday to $11.6 million. There were 123,347 shares disbursed, priced at $53.98 each, giving that tranche a nominal value of $6.66 million. BusinessWeek assumes GM has 500 million total shares, and working backwards from analysts' valuation numbers and bond prices, concludes that GM paper is worth roughly $94 per share. If the IPO goes by that market rate, there will be $11.59 million in the kitty. Ed Whitacre received the largest haul, of course, awarded $2.31 million in shares based on the forecasted $94 rate.

[Source: BusinessWeek]

Report: GM gives $6.66M in stock to 14 top execs originally appeared on Autoblog on Sat, 03 Jul 2010 14:08:00 EST. Please see our terms for use of feeds.

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Spyker CEO Victor Muller reduces voting interest in company below 30 percent

Jonathon Ramsey — Fri, 26 Mar 2010 18:20:00 EST

Filed under: Government/Legal, Saab, Earnings/Financials, Spyker

After the Saab sale transaction went through, Spyker Cars CEO Victor Muller held a 34.3-percent stake in the Dutch sportscar maker. And according to local law, having more than 30 percent in equity meant that Muller would be obliged to make a public bid for the rest of the company's shares, so he transferred slightly more than one million shares to a Cyprus-registered company for what looks like safe keeping.

Under the terms of the move, Muller can buy the shares back any time from Dorwing Solution Limited, the company that purchased them, for the same price at which he sold them. Full press release is after the jump.

[Source: Spyker]

Continue reading Spyker CEO Victor Muller reduces voting interest in company below 30 percent

Spyker CEO Victor Muller reduces voting interest in company below 30 percent originally appeared on Autoblog on Fri, 26 Mar 2010 18:20:00 EST. Please see our terms for use of feeds.

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Taking Stock: GM shares hit 75-year low, Visteon delisted after trading at 2 cents

Chris Paukert — Fri, 06 Mar 2009 16:26:00 EST

Filed under: Trends, Government/Legal, Hirings/Firings/Layoffs, Earnings/Financials

With both evidence and speculation mounting that General Motors and Tier-1 supplier Visteon Corp. have bleak futures, both companies' stock shares continue to get hammered, with GM's shares trading as low as $1.40 Friday morning and Visteon dropping from 7 cents to 2 cents on Thursday. For GM, that's its lowest price since May 23, 1933, and the price for Visteon is so low that the New York Stock Exchange delisted it - its last day on the exchange was yesterday.

Investors are dumping their shares as both companies look increasingly like bankruptcy is in their futures unless additional government support can be secured - in fact, Visteon's declaration all but a lock. The supplier is widely expected to default on a $15+ million interest payment soon, a move that would trigger bankruptcy.

[Sources: Detroit News; Detroit Free Press | Image: Spencer Platt/Getty]

Taking Stock: GM shares hit 75-year low, Visteon delisted after trading at 2 cents originally appeared on Autoblog on Fri, 06 Mar 2009 16:26:00 EST. Please see our terms for use of feeds.

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GM and Ford take a beating on Wall St.

John Neff — Thu, 09 Oct 2008 16:58:00 EST

Filed under: Ford, GM, Earnings/Financials

General Motors and Ford just concluded an absolutely brutal business day on Wall Street, which echoed the performance of the markets in general as the Dow Jones Industrial Average slid another 678.91 points to close below 9,000 at 8,579.19 points. GM closed the day at 4.94 after having dipped as low as 4.72 just minutes before the bell rang at 4PM, while Ford ended today at just 2.14. Analysts are noting that GM shares haven't been this cheap since the 1950s and that a single share of Ford stock costs less than a gallon of gas at the moment. We are most certainly not financial analysts, but we do know these companies are heading in the wrong direction fast and that a brighter future is not weeks but months and years away.

[Source: AOL Money and Finance]

GM and Ford take a beating on Wall St. originally appeared on Autoblog on Thu, 09 Oct 2008 16:58:00 EST. Please see our terms for use of feeds.

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Analyst gives bump to Ford; says GM nearing end of its upward run

Eric Bryant — Wed, 16 Aug 2006 06:53:00 EST

Filed under: Earnings/Financials

An analyst with Bear Stearns delivered an interesting assessment of the domestic automakers today, stating that Ford's credit rating deserves a boost on the basis of its upcoming expected turnaround performance. The stock's rating was cranked up two notches from "underperform" to "overperform", and indeed its value has enjoyed an increase of nearly 15% in the last month (granted, it's coming off a slump that saw it nearly touch on its 52-week low, and it's still over 20% down from its peak in the last year).

General Motors, on the other hand, is viewed as having reached its peak in the near term, and was knocked down from "overperform" to "peer perform". That automaker's stock is up 50% since the beginning of the year on the basis of GM's turnaround efforts, but that ride is considered to be mostly over, and any further gains are now viewed as being incremental and tied to sales results.

Also interesting is Bear Stearns' strategy towards making money from domestic automaker stocks. Instead of looking for returns from holding onto the stocks over the long term, the firm looks to shift its money around as the restructuring cycles roll through Detroit.

[Source: Marketwatch]

Analyst gives bump to Ford; says GM nearing end of its upward run originally appeared on Autoblog on Wed, 16 Aug 2006 06:53:00 EST. Please see our terms for use of feeds.

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