Archive for the ‘Financials’ Category

Automotive Consumer Debt Continues to Rise

Despite selling fewer vehicles, loan originations rose last quarter.

by on Feb.14, 2018

Americans borrowed more money to buy new vehicles in 2017 despite the fact that they bought fewer vehicles.

The amount of money Americans borrowed to finance the purchase of new vehicles increased again during the fourth quarter of 2017, according to new figures published by the Federal Reserve Bank of New York.

The Federal Reserve Bank of NY said the value of auto loans approved during the fourth quarter increased by $8 billion over the same period in 2016 when sales were of vehicles were relatively stronger. In addition, the value of automotive loans or debts held by lenders increased in 2017 by $64 billion to $1.22 trillion even though overall new vehicle sales dropped last year.

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The percentage of delinquent auto loans also dropped in the fourth quarter to 2.3% from 2.4%, the report noted. (more…)

GM Shutting One Korean Plant, Considering Fate of Others

Government open to aid offer – but demands investment guarantees.

by on Feb.13, 2018

The Gunsan plant has produced several GM models, including the Chevy Orlando shown here.

Facing rising costs and declining sales, General Motors today said it will close one of four factories in South Korea and, as part of an ongoing restructuring program, the automaker is weighing the fate of the remaining three facilities.

South Korean government officials expressed “deep regret” at the news. The country’s trade minister left open the possibility of financial aid but cautioned that any assistance will depend on whether GM plans to invest in its operations in Asia’s fourth-largest economy. But it appears all sides are playing a game of brinksmanship, the U.S. automaker waiting to see what stakeholders, including its unions, might be willing to offer.

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“As we are at a critical juncture of needing to make product allocation decisions, the ongoing discussions must demonstrate significant progress by the end of February, when GM will make important decisions on next steps,” Barry Engle, GM executive vice president and president of GM International, said in a statement.

(more…)

Tesla Loses Big Money in 2017: $1.96B

Model 3 production issue escalate expenses, offsetting record revenues.

by on Feb.07, 2018

Production of the new Model 3 has run into some snags, according to Tesla.

Tesla reported its revenues rose in the final quarter of 2017 to $3.3 billion, which was better than last year’s Q4 result of 2.3 billion. However, the increased revenue also brought a bigger loss of $675 million, or 4.01 a share, compared with $619 million, or $3.70 a share.

For the full year, revenue rose 55.7% to $11.7 billion due in large measure to achieving record sales results for its Model S and X electric vehicles; however, the company still lost money for the year and is well behind early production goals for the Model 3.

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The company lost $1.96 billion, or $11.83 a share, this year compared with $694 million, or $4.68 a share, in 2016 as its operating expenses were nearly double from the year-ago figure. (more…)

US Tax Windfall Doubles Toyota’s Q3 Profits

Automaker revised full-year earnings forecasts for third time.

by on Feb.06, 2018

Despite giving the Camry a stylish makeover the sedan continued to lose sales momentum last quarter.

Toyota reported a 54% increase in operating profit in Q3 despite weak sales in the U.S. However, it was the U.S. that help to double its profits from the year-ago period, courtesy of President Donald Trump’s recently passed tax plan.

Operating profit was 673.6 billion yen, or $5.98 billion, in the quarter that ended Dec. 31, an increase of 214.7 billion yen, or $1.91 billion. Additionally, net income rose nearly 94% to 941.8 billion yen, or $8.36 billion, the company said.

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The results pushed Toyota to revise its full-year earnings forecast for the third time, although its prediction for sales remained unchanged at 8.95 million for the year ending March 31. (more…)

Accounting Adjustment Masks Record Full Year Earnings for General Motors

Workers will get $11,750 in profit-sharing.

by on Feb.06, 2018

GM CEO Mary Barra has pushed for major changes in GM's strategy, and the 2017 numbers suggest her approach is paying off.

General Motors officially reported a net loss for 2017, but the real numbers were masked by a series of accounting adjustments and actually climbed into record territory for the year.

The adjusted, $12.8 billion in pretax profits, which worked out to $6.62 a share – an 8.2% year-over-year gain – comes as good news to workers as well as investors at a time when economic uncertainty has shocked Wall Street. About 50,000 U.S. hourly employees will share the maker’s success with profit-sharing checks averaging $11,750 apiece. That bonus actually dipped from $12,000 last year.

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“The actions we took to further strengthen our core business and advance our vision for personal mobility made 2017 a transformative year,” said GM Chairman and CEO Mary Barra, in comments during a media and analyst conference call. “We will continue executing our plan and reshaping our company to position it for long-term success.”

(more…)

Toyota Recalls 654K Vehicles for Airbag Issue

Airbag issue unrelated to Takata's ongoing problems.

by on Feb.01, 2018

Toyota is recalling certain Priuses among 645,000 vehicles globally due to an airbag issue.

Toyota issued a recall for approximately 645,000 vehicles around to world due to an electrical problem that may prevent the vehicle’s airbag from inflating during a crash.

The action covers certain Toyota Prius and Lexus RX and NX SUVs. Also covered are some Toyota Alphard, Vellfire, Sienta, Noah, Voxy, Esquire, Probox, Succeed, Corolla, Highlander, Levin and Hilux models. All were produced between May 2015 to March 2016.

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An open electrical circuit could occur over time, the automaker warned, that would set off an airbag warning light and could stop the side and front air bags from deploying. (more…)

German Union Digging in for Tough Auto Negotiations

IG Metall preparing for industrywide strike as part of talks.

by on Jan.31, 2018

German workers are being prepared to take a strike vote in talks with automakers.

German carmakers and suppliers are in a major battle with IG Metall, the powerful metalworkers union, which is demanding higher wages and shorter hours. The negotiations are turning into the biggest confrontation between labor and management in more than a decade.

So-called “warning strikes” – short-term walkouts lasting no more than 24 hours – have already hit Daimler AG and Porsche this week as well as major suppliers such as Bosch and ZF. In all, an estimated 260 metalworking firms have been targeted by IG Metall and more than 120,000 workers at Volkswagen AG are poised to go on strike for 24 hours, starting Thursday.

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The walkouts, which stretch across Germany’s industrial centers, follow a failed set of negotiations, where neither the employers nor the union could agree on a formula for a new wage agreement, observers in Germany noted. (more…)

Hyundai Posts Disappointing Earnings Results

Lack of SUVs hurts sales outside South Korea, driving down results.

by on Jan.25, 2018

Sport-utility vehicles, like the Hyundai Sante Fe, dominated sales in 2017. The maker's lack of utes crimped its 2017 profits.

Hyundai Motor reported that its Q4 revenue of $23 billion and earnings were $970 million, or just a 3% increase, which was lower than the company predicted. Its full-year earnings were just $3.8 billion, a 25% drop and its worst result in eight years.

The South Korean automaker noted that it was hurt by overseas sales, particularly in China. The two countries are in the midst of a standoff over South Korea’s deployment of a missile defense system. The country’s use of the system is in response to North Korea’s ongoing display of missile launches.

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The automaker sold 4.5 million vehicles in 2017, which is a 6% from last year. The drop is all from its non-domestic sales, which fell 8%. While last year was difficult, this year is likely to be worse at the company predicts its sales will fall to their lowest levels since 2008. (more…)

Fiat Chrysler Doubles Profit in 2017

CEO Marchionne says company will be debt-free by end of Q2.

by on Jan.25, 2018

Sergio Marchionne said FCA will be debt-free by the end of the second quarter of this year.

Fiat Chrysler Automobiles N.V. profits nearly doubled in 2017 as a more profitable model mix helped overcome a sales decline in North America.

“We were the only leveraged automaker in the world. We no longer are leveraged,” said FCA Sergio Marchionne, who said the company plans to outline new four-year plant on June 1. FCA will not only be debt-free this year, it will also have 4 billion euros in cash reserves.

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“I’m really looking forward to 2018,” he said. “FCA is well positioned to be a top performer.” (more…)

Ford Hourly Workers Getting $7,500 Profit Sharing Checks

This year's amount is lower than last year's $9,000 payout.

by on Jan.25, 2018

Ford announced it will be paying out profit sharing for 2017 averaging $7,500.

Ford Motor Co. expects to distribute profit sharing checks, averaging $7,500, to hourly workers despite the decline in the company’s earnings in 2017.

Ford posted a full-year net income for 2017 of $7.6 billion, which will result in $7,500 profit-sharing checks for an estimated 54,000 hourly workers covered by the United Auto Workers contract, the automaker said.

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The profit-sharing checks were roughly $1,500 less than the $9,000 payouts from a year ago and reflected the impact of higher costs for materials, particularly for the aluminum, which is a key ingredient in the company’s F-150 pick-up truck, which is at the heart of the company’s product line and profitability. (more…)