(Adds GM comment, details from filing, CEO and CFO comments on Cruise from earnings call, background, byline) By Ben Klayman DETROIT, Feb 6 (Reuters) – The head of General Motors Co’s Cruise self-driving car unit stands to make more than $179 million over the next decade if the technology subsidiary experiences a change in ownership… Continue reading UPDATE 1-GM Cruise chief could earn $179 mln in long-term incentives
Tag: Morgan
GM unveils Chevy Silverado HD as Detroit’s Big 3 battle for big profits in big pickups
Rebecca Cook | Reuters
General Motors President Mark Reuss introduces the Chevrolet 2020 Silverado HD pickup truck at the GM Flint Assembly Plant in Flint, Michigan, February 5, 2019.
General Motors and Ford are raising the stakes in the war to win over buyers of heavy duty pickups, full-size trucks coveted by America's contractors, cowboys and commercial buyers alike.
GM unveiled Tuesday its new heavy-duty Chevy Silverado at the company's plant in Flint, Michigan where the truck will be manufactured.
“They are very purpose built,” Mark Reuss, president of General Motors told CNBC. “Things like snowplows, going to work at a construction site, using the power out of the bed. These are tools, but they are also refined tools.”
The new Silverado, complete with a ten-speed transmission rolled out just hours after Ford announced new capabilities and technology for its F-Series Super Dutypickup truck.
Phil LeBeau | CNBC
Chevy Silverado HD
“Our new Super Duty has more power, more payload and towing capability and better technology than ever to help these customers build a better world,” Kumar Galhotra, Ford's president of North America, said in a new release announcing the new truck.
Not to be outdone, Fiat Chrysler has a new Ram Heavy Duty 2400/3500 pickup heading into showrooms this spring. It comes complete with a new Cummins engine and the capability to tow 35,100 pounds, roughly the weight of five African elephants according to Fiat Chrysler.
There's a reason the Detroit Big 3 automakers are in a arms race when it comes to big pickups. These are among the most profitable models the automakers sell.
“Pickup trucks, the full-size and then the heavy duty, combined account for well over 100 percent of global auto profit,” said Adam Jonas, auto analyst with Morgan Stanley. “We like to joke sometimes the Ford F-150 is called the F-150 because it accounts for 150 percent of Ford's global profit.”
Jonas estimates some of the newest full-size pickups each bring in $10,000 to $15,000 in profits for automakers, depending on the model. He calls the profit margins “Ferrari like.”
All of which explains why the Big 3 are pouring billions into rolling out newer, more capable and higher-priced heavy duty pickups. For example GM is adding a thousand jobs to its plant in Flint to help with production of the new Silverado. Many of those jobs will be filled by GM employees working at some of the six plants the company is idling in a North America.
Last year, roughly one out of every four full-size pickups sold in the U.S. was a heavy duty model according to IHS Market, the Ford's heavy duty F-Series being the most popular.
There is one other reason why GM, Ford and Ram believe their new heavy duty pickups will rack up strong sales this year. The economy remains strong, so businesses and contractors looking to invest in new work trucks are primed to upgrade their heavy duty trucks.
“Construction starts, anything with building, anything with servicing. All those areas are very healthy and that helps out truck business and in particular, the heavy duty business,” said Reuss.
Phil LeBeau | CNBC
Chevy Silverado HD
CNBC producer Meghan Reeder contribute to this report.
Questions? Comments? BehindTheWheel@cnbc.com.
Saudi Arabia — which Elon Musk claimed would back a buyout — cut its Tesla exposure: FT
Bobby Yip | Reuters
Tesla Chief Executive Elon Musk stands on the podium as he attends a forum on startups in Hong Kong, China.
Saudi Arabia has reportedly taken out an insurance policy on its investment in Tesla, which dramatically cuts its net exposure to the stock, just months after CEO Elon Musk claimed the kingdom was prepared to back a deal to take the electric car maker private.
Musk settled fraud charges with the Securities and Exchange Commission in September over the claim, agreeing to step down as Tesla's chairman, pay a $20 million fine and appoint new board members.
In recent weeks, Saudi Arabia's Public Investment Fund has hedged nearly its entire 4.9 percent stake in Tesla, the Financial Times reports. That means the PIF still holds the shares, but it has taken out other positions that protect it from a drop in Tesla's stock price.
Tesla tanks after Elon Musk lays out a 'difficult' road ahead
5:37 PM ET Fri, 18 Jan 2019 | 05:31
The Financial Times first revealed the PIF's stake in August. Almost immediately after that, Musk tweeted that he had secured funding to take Tesla private at $420 per share, later explaining that the Saudis would back the buyout. The SEC later charged the remarks were “false and misleading.”
According to the FT, the PIF put the hedges in place after the market closed Jan. 17 with the help of J.P. Morgan bankers. The following day, Tesla announced layoffs and warned of “very difficult” times ahead. Tesla's stock price has fallen about 15 percent since then.
Musk told the FT that there hasn't been communication with the PIF in months and Tesla is not aware whether the kingdom still holds the shares. The PIF and J.P. Morgan declined the FT's offer to comment.
Tesla's stock initially dipped by more than 2 percent on the FT report, but the shares ended the day down modestly.
While Saudi Arabia is the world's largest oil exporter, its investment in electric car pioneer Tesla is part of Crown Prince Mohammed bin Salman's drive to diversify the nation's economy. The PIF has become a major investor in tech companies under Crown Prince Mohammed.
Read the full story here.
Musk not worried about Tesla Model 3 demand, Wall Street thinks otherwise
(Reuters) – Tesla Inc shares fell on Thursday as Wall Street wondered if demand for its mass market Model 3 sedan could be sustained while it tries to make substantial inroads in China. FILE PHOTO: A Tesla logo is seen at a groundbreaking ceremony of Tesla Shanghai Gigafactory in Shanghai, China January 7, 2019. REUTERS/Aly… Continue reading Musk not worried about Tesla Model 3 demand, Wall Street thinks otherwise
Surprise exit of Tesla CFO unnerves analysts: ‘Significant loss of institutional knowledge’
Watch three Tesla experts debate the electric car maker's mixed earnings report
4 Mins Ago | 01:58
Tesla's announcement that Chief Financial Officer Deepak Ahuja is retiring has unnerved Wall Street's top analysts and overshadowed the company's sales beat in the fourth quarter.
Many viewed the loss of the longtime executive as the most significant in a string of high-profile departures as the electric car manufacturer struggles to retain talent. The company said in September that chief accounting officer Dave Morton was leaving the company after less than a month on the job, while head of human resources Gabrielle Toledano decided last year not to rejoin the company after a leave of absence.
Others chose to highlight Ahuja's unseasoned replacement, Zack Kirkhorn, who will take the financial reins of the $53 billion public company just six years out of business school.
“We see the departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO,” wrote AB Bernstein analyst Toni Sacconaghi.
To be sure, Tesla reported better sales in the fourth quarter than Wall Street analysts had expected with revenues of $7.23 billion, more than double its $3.29 billion in revenue during the same quarter in 2017. And while profit fell short of projections, the company's stock crept higher immediately following its earnings announcement based on the solid sales numbers and a decent 2019 outlook.
However, the equity quickly declined after CEO Elon Musk announced during the earnings conference call that Ahuja is leaving after almost 11 years at the company. The stock fell 3.7 percent Thursday morning.
Here's what Wall Street analysts thoughts about Deepak Ahuja's departure.
AB Bernstein (Market Perform)
“Surprisingly, Tesla's CFO Deepak Ahuja announced that he was retiring, and would be succeeded by Zack Kirkhorn, Tesla's current VP Finance. We see the departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO, just six years removed from business school.”
Goldman Sachs (Sell)
“Management announced that CFO Deepak Ahuja would be retiring from his position at the firm in 2019 and would be replaced by Zach Kirkhorn, who joined Tesla nine years ago. Mr. Ahuja had previously left his position as CFO of Tesla in 2015, but returned in early 2017. We believe the changeover may cause some uncertainty for investors as Tesla just saw two consecutive quarters of profitability and positive cash flow, and we see potential for a less stable path forward due to a sequential step-down in deliveries, working capital headwinds and convertible debt payment.”
J.P. Morgan Chase (Underweight)
“We expect investors to react negatively to the replacement of Deepak Ahuja, 56, as CFO with Zack Kirkhorn, 34, Tesla's current Vice President of Finance, given Mr. Ahuja's long automotive industry experience and 11-year tenure as the firm's CFO (across two separate stints), during which he provided relative stability to the firm's finance staff that has otherwise seen a great deal of churn.”
Barclays (Underweight)
“While the call had some positives around cash (largely due to under spending on capex and opex), those were overshadowed by the announcement of departure of the CFO and the absence of an experienced Silicon Valley (much less automotive experienced like ex-CFO Ahuja) vet to replace him. We remain underweight with a $210 price target.”
Morgan Stanley (Equal-weight)
“At the very end of the analyst conference call, Elon Musk announced that CFO Deepak Ahuja was retiring and will be replaced by Zack Kirkhorn who is VP of Finance and has been at the company for 9 years. CFO changes are significant events and we look forward to meeting Mr. Kirkhorn.”
— With reporting by
Michael Bloom
.
Investors Pour Money Into Self-Driving Cars to Capitalize on Data
Aria Systems/Tag Hartman-Simkins Strategic Investments When it comes to self-driving cars and other autonomous vehicles (AVs), investors are much more interested in the data they’ll collect than the cars themselves. The self-driving car bubble burst as technological reality fell far behind AV companies’ lofty predictions. But Wall Street investors are still interested in AV companies that… Continue reading Investors Pour Money Into Self-Driving Cars to Capitalize on Data
UPDATE 1-Scout24 rejects approach for car unit from Auto1 – sources
* Scout24 turned down approach by Auto1, sources say * Company previously turned down billion euro takover bid (Adds detail, background) FRANKFURT, Jan 30 (Reuters) – German online classifieds company Scout24 AG has rejected an expression of interest for one of its businesses from a rival, people close to the matter said. German used-car dealing… Continue reading UPDATE 1-Scout24 rejects approach for car unit from Auto1 – sources
Chinese EV carmaker NIO aims to raise $650 million via convertible bond
HONG KONG (Reuters) – Electric carmaker NIO Inc, among rivals to Tesla in China, launched a $650 million five-year convertible bond on Wednesday, aiming to use the proceeds to fund expansion. FILE PHOTO: A man is silhouetted in front of Nio cars at the auto show, in Shanghai, China April 20, 2017. REUTERS/Aly Song The… Continue reading Chinese EV carmaker NIO aims to raise $650 million via convertible bond
New Morgan ‘Wide Body’ sports car caught testing
Morgan is set to launch an all-new sports car this year, and the first shots of prototypes testing have emerged. As expected, the model’s design is a familiar adaptation of the 1930s-inspired look that Morgans have carried for decades, set to evolve further with a new range-topping model in 2020. But under the skin there’s substantial… Continue reading New Morgan ‘Wide Body’ sports car caught testing
Lyft, Gasparilla’s Exclusive Transportation Partner, is teaming up with Captain Morgan to provide pirate themed fun and free rides!
Ahoy Mateys! Lyft is the official transportation partner of Gasparilla 2019 and is teaming up with Captain Morgan (@CaptainMorganUSA) to provide pirate themed fun and free rides. Beginning Jan. 21, look out for specialty Lyft and Captain Morgan wrapped Lyft cars “sailing” (or driving) the Tampa seas. On Jan. 21, Monday of Gasparilla week, you… Continue reading Lyft, Gasparilla’s Exclusive Transportation Partner, is teaming up with Captain Morgan to provide pirate themed fun and free rides!