UAW

GM Misses Earnings - Burns over $3 Billion in First Quarter

It appears that General Motors is trying to remedy one of the latest criticisms against them. That criticism is that the company has way too large a “cash hoard” and most recently came from former Obama Auto Task Force member turned shareholder activist, Harry Wilson. Well Harry, be at ease; GM has managed to reduce that so-called hoard by over $3 billion in just three months as first quarter earnings flopped on Wall Street.

Regulatory Capture: NHTSA Tows GM Line on Brake Corrosion

The verdict is in from the National Highway Traffic Safety Administration (NHTSA) on General Motors’ corroding brake line problem. Despite having received thousands of complaints from motorists regarding brake failure due to brake line rust, the agency claims GM does not have higher failure rates than other manufacturers. The clear evidence to the contrary makes this a classic case of what economists call "regulatory capture." First identified by Nobel laureate George Stigler (in photo) in 1971, it's when a government agency tasked with protecting the public interest instead acts to the benefit of an industry or particular company.

Harry Wilson’s Teamsters Connection and the Return of Government Motors

Harry WilsonIs the fix in? General Motors is acting like it faces a major decision in responding to the self-nomination of Harry Wilson for its board of directors. Wilson was one of the key members of President Obama's Auto Task Force, and purports to be acting at the behest of hedge funds who want GM to spend the "cash hoard" that was made possible by US taxpayers.

Ironically, Wilson was one of the people who determined how much of a "hoard" GM would accumulate, an amount he now criticizes as being excessive. During, and just prior to, GM's bankruptcy process, taxpayers supplied about $50 billion to "invest" in the company. Canadian taxpayers chipped in about $10 billion while GM had its balance sheet cleared of about $30 billion of debt. The liabilities owed to the politically-favored UAW remained intact.

Harry Wilson to the Rescue of GM— or UAW?

Harry WilsonHarry Wilson, the nemesis of General Motors bondholders who were wiped out in the government-orchestrated GM bankruptcy, is back on the scene. On the front page of today's Wall Street Journal, Wilson is portrayed as an "activist" investor, who seeks to maximize shareholder value. While his suggestion that GM buy back $8 billion of common shares would give a temporary boost to share price, Wilson's motivations may not be entirely pure. His real agenda could be to expand the already-favored position of UAW shareholders, and to bolster the political fortunes of unions in general.

Wilson was a retired banker elected to serve on President Obama's Auto Task Force and was the driving force behind preventing old GM bondholders from receiving due process during the GM bankruptcy process. His involvement led to his current status as a "restructuring expert" and CEO of the MAEVA Group. It now seems that our friend Harry is back to make lots of money for hedge funds, as well as for himself.

GM Earnings Not as Rosy as Portrayed

General MotorsThe trumpets sounded this morning as General Motors reported its 2014 fourth quarter earnings. GM's bottom line earnings exceeded expectations (although revenue missed and was down from last year) and the pre-market share price of GM immediately jumped over a dollar a share. Despite the victory laps being taken by GM and its friends in the media, it would be wise for individual investors to think twice before jumping on the GM bandwagon.

GM Shareholders Shafted as UAW Cashes in on Preferred Stock Buybacks

Dennis WilliamsGeneral Motors recently announced that it bought back preferred stock from the UAW Retiree Medical Benefits Trust and the Canadian government. The deal closed in December of 2014 and supposedly will result in a reduction to GM's fourth quarter earnings to the tune of $800 million. GM had the option to redeem the shares at face value after December 31st of 2014. The timing of the deal brings into question the motivation behind the move and also leads us to reexamine a previous preferred share buyback that occurred in late 2013.

Chevy Malibu Problems Epitomize GM's Struggle

Government MotorsGeneral Motors is now approaching its fifth year of existence since emerging as a new entity as a result of the 2009 auto bailouts which saw taxpayers fund a bankruptcy process to the tune of $50 billion. Much has been debated about the "success" of GM since the controversial government-orchestrated restructuring. While GM management recently announced a dividend in an attempt to ensure investors of financial stability, a more telling indicator of the likelihood of future profitability may be found through an analysis of how competitive the company's vehicles are.

Curious Timing for GM Dividend Announcement

The internet was ablaze Tuesday evening with stories presenting a perceived positive move by General Motors' outgoing government-appointed management. All hail! "General Motors to pay first dividend since 2008," trumpeted the headlines. GM shares immediately spiked up in after-hours trading with shares rising about $1.60 or 4% on the news. Unfortunately for those duped by the proclamation, GM followed the story hours later with a profit warning. For the time being, the bad news outweighed the good with GM shares reversing course and ending the day Wednesday with a loss of over one and a half percent on a day that the market rallied.

Obamacare Pork to UAW Rolled Out Without a Glitch

Obama UAWWhile the Obama Administration is still pumping resources and taxpayer money into the implementation of Obamacare, the initial disbursement of pork included in the bill was successfully doled out almost a full two years ago. And the main recipient of taxpayer largess was, once again, the UAW.

The Obamacare pork came in the form of a program called the Early Retiree Reinsurance Program or ERRP. $5 billion of taxpayer money was allocated to help pay for healthcare costs to retirees between the age of 55 and 65. Number one on the union-dominated list of recipients was the UAW, which received $387.2 million for its VEBA fund, which was set up to pay UAW retiree health care costs. This amount was still not good enough for the UAW as they penned a letter to Congress in February of 2012 requesting an increase in ERRP funding to $10 billion.

GM Spends $1.3 Billion to “Create or Retain” 1,000 Jobs

Just days after the US government announced their exit from General Motors, the company announced a move that sounds like it could have come directly out of the Obama Administration playbook. GM is boasting about "creating or retaining" roughly a thousand jobs at the cost of approximately $1.3 million per job in a move that could only be viewed as a positive from a political point of view.

Syndicate content