Although such a move has been rumored for some time, the speed of Dana?s demise will further dampen sentiment toward the auto industry. |
Although such a move has been rumored for some time, we believe the speed of Dana's demise will nonetheless further dampen sentiment toward the sector. |
Although we are becoming more upbeat on the pace of restructuring, we worry about Ford North American production outlook, particularly in 2007. |
Assuming $8,000 variable contribution margin/unit, we estimate this translates into an earnings-per-share hit of 1 cent for every day of lost production. However, we also note that much of this lost production could be made up via overtime production once the plants are up and running again. |
Beyond guidance for favorable structural cost performance in 2006, and details on material cost savings goals, no specific guidance on the extent or cadence of structural cost savings was given. In addition, the company offered only limited details on the timing of plant actions. |
By forcing a health-care inflation cap for salaried workers, GM is bringing forth the issue of similar caps for hourly workers, which our talks with (GM) management suggest is a top priority. |
However, near-term worries on slowing diesel penetration and Western European production could weigh on the stock. |
It should not be difficult to agree on the bargaining points. |
One of the likely sticking points in the pending sale of GMAC may well be resolution on Delphi, further emphasizing GM's interest in avoiding a labor dispute. |
That said, we continue to favor GM over Ford due to the former's more favorable 2006 product cycle and its more aggressive restructuring approach. |
That said, we continue to favor GM over Ford due to the former's more favorable 2006 product cycle, and its more aggressive restructuring approach. |
That said, we continue to favour GM over Ford due to the former's more favourable 2006 product cycle and its more aggressive restructuring approach. |
The company's announcement that it will not provide earnings guidance going forward, however, came as more of a surprise, making it notably more difficult to isolate and gauge the impact of restructuring. |
The company's specificity on 2006 cost targets ... is likely to reassure the market, and heightens our belief that the company will see a meaningful earnings rebound in 2006. |
The long-term outlook, particularly given end-market strength in the controls business, remains robust. |