General Motors was the world’s number one automaker in 2011 and this year, its share value has increased by more than 25 percent to around US$25.50. The good news is that this figure outperforms the Standard & Poor’s 500 index 16 percent rise; the bad news is that it falls below its 2010 public offering of US$33 per share.
Its cash-burning European operations and the alliance with PSA Peugeot Citroen, which has still not crystallized, along with worries over China’s new car market rate of growth slowing down are, according to Reuters, making Wall Street nervous.
Moreover, there are worries that CEO Dan Akerson is not changing GM’s culture as fast as he promised and that the U.S. Treasury’s 26 percent stake in the company is “holding it back”.
GM's stock is rated as “buy” by many securities analysts, as the group plans to refresh or replace more than 70 percent of its U.S. line-up until the end of next year and Akerson is trying to reduce bureaucracy.
"People thought this new company would have this new sense of energy and momentum and in both cases you don't feel it", Citi analyst Itay Michaeli told Reuters. Nevertheless, he rates GM stock a "buy" as he considers it undervalued and believes that management has handled the European crisis quite reasonably.
On the other hand, Morgan Stanley’s Adam Jonas, who has said that GM should get rid of Opel ASAP, rates the stock as “overweight”.
Probably the truth lies somewhere in the middle; as Gabelli & Co. analyst Brian Sponheimer points out, “They’re moving in the right direction, but…there’s still a lot of wood to chop.”
By Andrew Tsaousis
7 Comments:
How can someone like Akerson know jacksh!t about GM's culture? Seriously, he's just another pencil pusher in an executive position that he was never qualified for and should have been placed in to begin with. Corporate problems are always in direct relationship with those at the top. The top currently at GM and what was the Old GM were inept—hence, the bailout. GM received a bailout because those at the top withheld pertinent information, yet they received golden parachutes and some serious deadweight (e.g. Lutz) were even retained as consultants (can you say milk the system?).
um. its a pretty easy problem looking at it from outside. GM is just mainly competing with itself. The new malibu and ALL of buick competes mainly with itself. That new Malibu is clearly just a watered down buick with a design from 1998. the entire buick lineup is just for china. Cadillac is getting better again- but for how long?
Wall Street should talk! They need to sweat bullets for a while after the shit "they" pulled. All they care about is money, money, and more money and they want it NOW!
I like the direction GM is going. It's a big ship and does take time to swing around. The Buick designs are fresh, at least to the US, and really stand out in a sea of cars that amazingly look so similar to one another. Can't say that about too many Fords or Chryslers these days.
Why does anyone listen to wall st? We already know there a bunch of overpaid idiots
Have you even looked at a Malibu and ANY new Buick? None of them look the same.
As for 1998, what, if any, design from then is evident today? The W-body is gone and the Epi2 platform is available in SWB and LWB forms. What is this somehow "shocking" when GM does it but not when Toyota does it with the Camry and Lexus ES?
I swear you armchair capitalists have never bothered to even do a cursory Wikipedia read before you type out nonsense.
It never ceases to amaze me how often people criticize GM for basing multiple products off the same platform with shared underpinnings and cite that as the problem because "they are competing with themselves" and yet EVERY manufacturer does it. If you want to criticize a company for blatant 'badge engineering' aim your ire at Toyota and Subaru regarding the FR-S/BRZ/GT86. The worst you could say is that Buick tends to step on high-end Chevrolets and low-end Cadillacs price-wise, but the target market is different from either brand. As for GMC eating at some of Chevrolet-Truck sales truck buyers are pretty picky and very brand loyal, which is about the only two brands that compete against each other directly. Worst offender in my mind for competing with itself is VW, where in Europe you have the VW Golf competing against the Audi A3, the Seat Leon, and the Skoda Octavia. The key is to have a defined market and go after it. GM lost a lot of good will in the 70's thru early'00s because it was far too obvious that the cars were the EXACT same with some different trim bits and front/rear fascias (see Cavalier/Sunbird/Firenza/Skyhawk/Cimmaron or the Celebrity/6000/Ciera/Century to name 2 lines). It is a stretch to suggest that the new Malibu competes with the Regal given the 2.5 kids family nature of the former vs the sports-sedan aimed at DINKs for the latter. The only car line that currently is problematic is the upcoming Impala which I will agree creeps too close to the Lacrosse and the new XTS. GM would have been better served to have not based the new Impala off the same platform of the Lacrosse and XTS and rather had it be applied to the upcoming SS which is a style-tweaked Commodore. That move would have allowed GM to offer a broader price range for the car thus allowing for more sales (since the SS will likely initially be imported then manufacturing transferred to likely the Oshawa plant that builds the same-plateform Camaro costs to produce and ship will decrease).
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