Earnings | TheDetroitBureau.com- htxurl.info

Archive for the ‘Earnings’ Category

Musk, Tesla Board, Move Forward on Privatization Plan

Carmaker hires Goldman, Silver Lake to advise.

by on Aug.14, 2018

Whether Elon Musk could justify tweeing "funding secured" is a matter of hot debate.

Even as questions mount about CEO Elon Musk’s plan to take the automaker private, the car company’s board is beginning the necessary steps to evaluate a proposal, with investment firms Silver Lake and Goldman Sachs brought in to offer advice on what appears to be a Saudi-funded buy-out.

Those developments come just a week after CEO Musk tweeted his interest in taking Tesla private while also hinting that “funding (is) secured.” Precisely where the funding will come from has become a central question, though Musk on Monday put up a blog post indicating he has been meeting with managers of the Saudi Arabian sovereign investment fund who have expressed interest in backing the plan.

Tesla News!

Tesla, meanwhile, now faces a probe by the SEC, as well as at least two lawsuits filed last week questioning whether the South African-born executive’s proposal was, in reality, a “nuclear attack” on by short-sellers.

(more…)

Rising Inflation Challenges Profitability for Automakers

Car companies getting hit on rising material costs due to Trump tariffs.

by on Aug.14, 2018

Trucks are still protected in the U.S. by a 25% tariff, despite a lower tax on all other vehicles.

A rising rate of inflation now poses an additional threat to an auto industry already under pressure from new tariffs and trade restrictions.

From June 2017 to June 2018, the U.S. Consumer Price Index for All Urban Consumers rose 2.9%, the largest 12-month increase since the period ending February 2012, the U.S. Department of Labor. The Congressional Budget Office, in a report in which it indicated it expects U.S. economic growth to slow next year, also said this week it expects the rate inflation to top 3.1% through the last half of 2018.

News You Can Trust!

U.S. workers’ paychecks are worth less than they were a year ago, the Labor Department reported Friday, as modest wage gains have not kept pace with inflation. (more…)

Tesla Stock Tumbles Hard as Questions Mount About Proposal to Go Private

Investors are “raising a lot of sensible questions,” while the SEC also begins sniffing around.

by on Aug.09, 2018

Investors -- along with the SEC -- are raising concerns about CEO Musk's proposal to take Tesla private.

Barely two days after euphoric investors started snapping up Tesla stock, buoyed by a tweet from CEO Elon Musk suggesting the company was ready to go private, gravity has set in. After nearing an all-time record, Tesla’s share price settling back to barely above where it started.

While the battery-carmaker’s board – along with at least one major investor — has cautiously backed the idea, saying it will now explore the idea of taking Tesla private, there appear to be more questions than answers. One of the uncertainties is how the SEC is viewing what happened this week, the federal agency set to take a close look at Musk’s suggestion that “Funding (is) secured” to make the transition once Tesla stock hit $420 a share.

Subscribe Now!

That number was certainly a big jump from where TSLA shares began the day on Tuesday, just over $340 a share. By the end of the day it had rocketed close to Tesla’s record closing of $389.61. But concerns were apparent almost immediately with some analysts pointing, among other things, to the “420” in Musk’s tweet, a number more often used as slang for marijuana.

(more…)

China Retaliates; New Tariffs Hit U.S. Auto Exports, Jobs

BMW, Mercedes, Ford, other makers could be hard hit, forced to cut American production.

by on Aug.09, 2018

The BMW X5 is the #1-selling American-made vehicle in the Chinese market.

The auto industry has found itself at Ground Zero as the U.S. and China escalate their trade war.

After the latest move by the Trump Administration to target Chinese imports, the Beijing government has announced it will strike back with 25% tariffs on $16 billion in imported U.S. goods. China previously enacted new duties on $34 billion worth of goods, bringing the total to $50 billion. And with the White House threatening to add another $200 billion to the U.S. list, the trade war could escalate rapidly.

Breaking News!

The latest round sees the Chinese Ministry of Commerce placing an additional 25% duty on a list of American products that includes coal, crude oil and metal scrap, as well as automobiles and motorcycles. A number of automakers could be hit hard by the new sanctions, including Ford Motor Co., Mercedes-Benz and BMW.

(more…)

Former Worker Countersues Tesla Over Sabotage Claim

Martin Tripp alleges automaker tried to cover up quality problems.

by on Aug.06, 2018

Former employee Martin Tripp claims he was fired after trying to report problems at Tesla's Gigafactory.

A former employee at the Gigafactory battery plant has sued Tesla after it claimed he committed sabotage and stole intellectual property.

Martin Tripp was fired by the battery-carmaker in June and subsequently sued by Tesla for allegedly sabotaging the company’s manufacturing system and also stealing its intellectual property. In turn, Tripp has filed a whistleblower complaint with the Securities and Exchange Commission, while also filing a lawsuit against Tesla.

News Now!

In the lawsuit, the former employee said the carmaker took action after he “raised his concerns about the seemingly exorbitant amounts of scrap” being produced at the Gigafactory, though “no action was taken.” Tripp even sent an email to Tesla CEO on May 16, 2018 expressing his concerns and backing them up with “graphical charts.”

(more…)

Automakers Caught “In Limbo” As New CAFE Rules Face Major Legal Hurdles

Anticipated court battle could delay changes for years.

by on Aug.03, 2018

Automakers are caught in the middle over the CAFE debate and could face even more challenges if the proposed Trump rollback drags on in court.

Despite, or perhaps because of, the Trump Administration’s plan to roll back the Corporate Average Fuel Economy, automakers are finding themselves in what one long-time industry analyst calls “limbo,” and it could be a year or more before they’ll actually be able to incorporate the CAFE update into their plans due to anticipated legal challenges.

As a result, it could be well into the upcoming decade before the White House revisions actually have any significant impact, according to numerous industry executives who spoke to TheDetroitBureau.com, if any changes ever actually occur.

Insight!

There is the very real possibility that the courts could rule against the proposed changes or that the legal battle drags on long enough for a new administration to come into office and revert back to the guidelines established under the Obama White House. As a result, automakers and suppliers face a major conundrum when it comes to planning for products set to come out through the middle of the coming decade.

(more…)

Toyota Motor Reports Increased Q1 Profits

Strong sales in U.S. and cost-cutting efforts pave way to profits.

by on Aug.03, 2018

Toyota's Masayoshi Shirayanagi noted that increased trade tensions and U.S. tariffs will eat into Toyota's bottom line.

Toyota Motor Corp. rode a wave of increased sales and decreased costs to a 7.2% increase in net income in its fiscal first quarter of 2018. Revenues also increased 4.5% during the quarter.

The company also announced it was ending its partnership with Isuzu Motor Ltd. The companies built diesel engines, but with oil burners falling out of favor, replaced by EVs and potentially fuel cells down the road, the two sides will split.

We Keep You In the Know!

Toyota owns a 5.89% stake in Isuzu. (more…)

Tesla Q2 Losses Double, But Profits Promised in Q3

Investors happy to see capex spend drop, stock jumps nearly 5%.

by on Aug.01, 2018

Tesla CEO delivered enough positives in the second quarter to excite investors. The company's stock rose 5% in after hours trading.

Tesla Inc.’s mad dash efforts to meet its ever-shifting production quotas didn’t result in a narrowing of financial losses for Q2, not that CEO Elon Musk implied that. However, the end result was a doubling of losses on a year-over-year basis.

In the second quarter of 2018, Tesla’s automotive business saw revenue rise to $3.1 billion compared with $2 billion for the same period last year; however, losses jumped to $717.5 million, or $4.22 a share, from $336.4 million, or $2.04 a share.

News Now!

However, the letter produced to explain the quarterly results suggests that only good times are on the horizon despite the company missing analyst expectations for losses this quarter. Ultimately, shareholders were pleased with the results as the stock jumped nearly 5% after hours on the news.  (more…)

Could Ford Be Working Up a Sub-Ranger Pickup?

One option would be to go with a car-based package.

by on Aug.01, 2018

The Ford Courier pickup shared platforms with the automaker's Fiesta subcompact.

Several sources are reporting that Ford Motor Co., long reluctant to undercut its full-size F-Series pickup family, could soon have small trucks in its line-up, with a model even smaller than the upcoming Ranger to follow by as early as 2022.

Exactly what it would look like and where it would fit into the spectrum isn’t clear but Automobile magazine’s sources suggested Ford might be looking at a product like the old Courier pickup built in Brazil that was based on the same platform as the prior-generation Fiesta subcompact.

Insight!

Whether there’d be a market for something the size of the old Ford Courier is far from certain, though several automakers appear to be looking at their options, notably including Hyundai which has been slowly moving forward with a production version of the well-received Santa Cruz concept first shown at the Detroit Auto Show in January 2015.

(more…)

Auto Suppliers Growing Pessimistic About Near-Term Prospects

Trump trade policies causing negative outlook.

by on Jul.31, 2018

Auto suppliers are concerned about their near-term prospects due to Trump administration trade policies.

The near-term outlook among both large and small automotive suppliers is growing more pessimistic, according to a new survey.

Despite a relatively strong sales and production environment, the darker outlook prevails due to trade policy uncertainty across the automotive supply base in the third quarter of 2018.

Stay in the Loop!

The OESA Automotive Supplier Barometer, a quarterly survey of executives at North American automotive suppliers on their 12-month outlook, posted a negative reading of 43 for the third quarter of 2018, seven points below a neutral level of 50. (more…)