Hedge Fund Takes GM Stake

Hegde fund Hayman Capital Management has taken a stake in General Motors.You're starting to see them take market share back,said Hayman founder and managing partner Kyle Bass.With their new 2014-15 product line,they're gonna increase dividends and buy back stock.Given how cheap the stock is,we think it should be trading in line with Ford.When you look at the enterprise value,it's about 47 billion dolars.
A 100 basis point move takes eight points away from their pension liability.We think that could actually go down to 17 billion dollars.We just think from a catalyst-driven timing perspective,now is the time to invest in GM.
The new GM products will take North American sales back.You have them really working on all cylinders.Motor Trend gives it the New Product of the Year last year.We think it's incredibly cheap and it's gonna move much higher next year,Mr.Bass noted.*
The federal government has announced it has exited its stake in GM,as Mr.Bass predicted it would by the end of the year.The taxpayer lost 10 billion dollars on the bailout of the automaker.*
GM shares closed at 40.90 in Monday trading,up 1.82%.

Ford Comes Recommended

Ford Motor Company has reported its Q1 earnings.Ford is without question the auto manufacturer that I want to own,says Gary Bradshaw of Hodges Capital Management.Their numbers are excellent and I think Ford will build on that momentum going forward.
I think we're still early in the cycle.Out a couple of years,we could see earnings at 3+.At that level,I think Ford is an excellent value.
I think there's a lot of pent-up demand for cars;you can't just drive them forever.Ford had great margins as well as revenue.Alan Mulally and his team have done a great job of being profitable.He's doing everything right at the moment.I think he is the best manager there is out there,Mr.Bradshaw concluded.
Ford had its best quarter since 1998.Profits were up 22%.CEO Alan Mulally said they're gonna add 7,000 new jobs over the next two years.When you have the strength of the product line,it shows the power of free cash flow.We have paid back 15 billion in debt the past year,Mr.Mulally pointed out.
Ford cautioned,however,that the cost of production and materials will go up again next year.That could crimp profit margins.
Ford Motor Company(F)

Industrial Management:A New CFO for General Motors

Chris Liddell,the widely respected chief financial officer of General Motors,has announced his resignation.Company treasurer Dan Ammann has been chosen to succeed Mr.Liddell.
Harry Wilson,a former member of the White House auto task force,said Mr.Ammann knows the company quite well.I would expect him to be long term.
The speculation was that Mr.Liddell was looking beyond the CFO position.That was reasonable given his age and accomplishments.He certainly did a good job in his 14 months at the company.
GM's was the biggest cultural change of any organization in U.S. corporate history.It went from mediocrity to success,which was played out on the world's biggest stage.
Mr.Liddell was the only outsider there.The others were holdovers.
The challenges GM and Mr.Ammann will face are:
1.Maintaining its high level of profitability
2.Continuing to revamp its product line
3.Stabilizing its executive ranks.
General Motors(GM)

Automakers Critical To Canada

The Canadian government,on both the national and provincial level,has been watching the U.S. automakers with great concern.The automotive industry is Canada's largest manufacturing segment,directly employing more than 150,000.The industry contributes more than 14% of Canada's manufacturing output,sustaining 12 Ontario communities.In consequence,the Canadian authorities are providing 3.29 billion dollars U.S. in loans to Canadian subsidiaries of General Motors and Chrysler.The federal government will give 2.09 billion,while Ontario will provide another 1.2 billion,said Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty.President Bush is authorizing 17.4 billion in aid to the struggling automakers.Ford Motor Company is not included in the loan packages,as it only needs a back-up line of credit at this time.

Paulson Reacts To Cut

We're all very fortunate that we have a Federal Reserve that's willing to do what is necessary,Treasury Secretary Hank Paulson feels.To date,we've stemmed a cycle of financial failures.The president's made a decision that the failure of automakers would not be a good thing,but no single action is gonna be a silver bullet.A lot of consumer finance takes place outside the banking system.I'm worried consumer credit will be cut off.Much of consumer lending is based on the capital markets.The Federal Reserve can rescue banks,but we didn't have the tools to rescue non-financial firms,Mr.Paulson reflected.