UPDATE: The Bloomberg story below is now all over the place. The Detroit News are running it right up front. So are Automotive News.
The Detroit News report as follows:
A GM spokesman declined to comment on a report Wednesday that the automaker was considering whether to eliminate its Pontiac, Saab and Saturn brands as a way to cut costs and improve its chances of getting as much as $12 billion in emergency federal aid.
….and further on….
GM has 1,071 outlets for Pontiac, 400 for Saturn and about 105 for Saab among its 6,400 dealers, said Susan Garontakos, a spokeswoman. GM has been trying to combine Cadillac/Hummer/Saab and Pontiac/Buick/GMC brands into consolidated dealerships that would benefit from greater sales and lower marketing costs.
Only 105 for Saab? Seriously?
Anyway, the whole story amounts to around 300 words when it could have just said “no comment”.
I wrote to SaabUSA and Saab Sweden for a comment on the story. As at the time of writing, Jan-Willem at SaabUSA’s probably still eating his Wheaties. Eric Geers from Saab Sweden was in the office, though, and replied as follows:
Well, we knew speculations like these would come up and probably some other scenarios as well as we come closer to Dec. 8. It’s as much unfortunate as it is a surprise. Note they don’t come from us and here in Sweden we work as usual and focus on the plans we have today.
I’ll add JWV’s comment as soon as it comes in, though I may be catching Z’s by then and have to do it in the morning.
Back to the original story. They all might be covering it now, but it’s been here for hours 🙂
There’s many mixed signals in the GM Crisis Media (TM) today. Here’s the daily precis from around the web:
Bloomberg are reporting that GM are now considering cutting loose a number of brands in order to satisfy the US congress that it has the right plan for a profitable future (i.e. a future that sees them pay back the money they want to borrow:
General Motors Corp., working to cut costs to win $12 billion in government loans, is studying whether to shed its Saturn, Saab and Pontiac brands in addition to Hummer, people familiar with the matter said.
Selling or dropping brands would save money and reduce overlap as the biggest U.S. automaker struggles to avoid running out of operating cash by year’s end, said the people, who didn’t want to be identified because no decision has been made.
Much as I’d like to see Saab in some hands that care a little more, I just don’t see them changing tack so dramatically at the last minute.
We’ll wait for inevitable “Saab is not for sale” article, probably due in the next 24 hours.
An unexpected vote of confidence?
JP Morgan are saying that GM bonds might represent some very good value right now. They consider the company has a very good chance of recovering to the point where they can realise a lot of savings they’ve got locked in for around 2010.
JPMorgan analysts rate GM’s bonds a “buy.”
“We believe GM has several sources of liquidity it can access to bridge the company to 2010 when it realizes considerable cost cuts,” analysts Eric Selle and Atiba Edwards said in a report.
These include an overfunded pension plan, possible asset sales, capital market transactions, equity injections, cost cutting and government loans, they said.
Deutsche Bank also believe that GM’s chances have improved and their latest commentary has sparked a jump in GM’s share price (and Ford, too).
From Automotive News (subs req’d)
Shares of General Motors and Ford Motor Co. jumped today after Deutsche Bank said chances have improved for the struggling U.S. automakers to receive a government bailout.
“There is growing concern about the risks to the U.S. economy that would be derived from inaction,” Deutsche Bank analyst Rod Lache said in a research note.
“The proximity of these bailout hearings to the Citigroup bailout may have also tipped the scales somewhat,” Lache said, referring to the massive government rescue of the bank announced Sunday.
Shares of GM, which hit a 70-year low of $1.70 last week, surged 35.1 percent today to close at $4.81 a share — up$1.25 a share on three times the stock’s normal trading volume on the New York Stock Exchange. At one point the stock reached $5.87 before retreating during the afternoon.
Is it just me, or do these banks and commentators have far too much influence? Someone’s made a killing selling GM shares today and all because of a few positive words.
So, in artist’s terms, we’re looking at mixed media.
Maybe the report on jettisoning a few brands led to the positive outlooks seen later in the day.
Only a week or so to go until we all get to hear the basics of the General’s plans.