This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?
1st Gear: Success Breeds Confusion
Someone will be smart, and invest, and make lots of money in the automotive space. Some will go all Better Place, shoot their load, and wind up with nothing. Many of these people will already be wealthy so it won't matter to them.
I got up early and have barely touched my coffee so maybe I'm just a little screw-y right now, but all the big news stories revolve around the idea of value, of what a company is worth, of what's going to happen next. I don't want to manifesto right now, because the manifesto implies you know what the fuck is going on. I don't.
And the good news is: Few people do.
As Reuters reports, the biggest hedge funders in the U.S. are divided over what to feel about GM, which makes sense, since the whole concept of a hedge fund is sort of right there in its name.
John Paulson's Paulson Management LP increased its exposure to GM by 114.9 percent to 4 million shares and David Tepper's Appaloosa Management boosted its GM share figure by 58.7 percent to 7.9 million shares, regulatory filings showed on Thursday.
Not every big investor remained positive on GM. Barry Rosenstein's Jana Partners sold nearly all of its GM stake, cutting its holding by about 8 million shares to just 7,100 shares. And Warren Buffett's Berkshire Hathaway Inc decreased its share stake in GM by 25 percent to 30 million shares, while Leon Cooperman's Omega Advisors sold its entire stake of 1.05 million shares.
Huge cash resources. Unbelievable inertia. A ton of brand equity. We see a lot of people on Facebook who are like "Damn, let GM die" or "That's it for GM." That's naive, if not plain stupid. GM is a company that will never be allowed to fail as much as it needs to in order to change, because even though Buffett decided to back down a bit there are other well-connected, wealthy people getting into it. Not to mention all of us, collectively, through the tiny bits of wealth we put out through 401ks that get rolled into funds that are rolled into other funds that, at some point, are eventually rolled into GM directly or through related enterprises.
The world is made up of power structures that, mostly, none of us are in. They're not going to let GM go away any time soon, but then what is the real value of GM? It's inability to be killed? The promise of doing something better?
Tragically, there's been scarce good leadership at GM throughout its entire modern history, even from people we clearly like. And that's where the real value question comes in. Most of us won't know it when we see it, but if someone at GM was capable of changing the corporate culture, refine the mission, et cetera… if that happens, GM could go back to being one of the most valuable companies in the world.
Maybe it's happening now. Maybe all of the recalls being pushed through are part of an ernest effort to correct the sins of the past before moving onto the future. Or maybe it's knee-jerk CYA. I don't know.
2nd Gear: TrueCar Raises $70 Million In Initial Offering
TrueCar, the website that scares women into using it to help them buy cars…
I mean, the website that maybe doesn't always help you get the best price…
Has raised $70 million, giving the company a market value of about $639 million according to Bloomberg. This is at a price of about $9 each, below the $12-$14 they wanted.
What's the value of helping people extinguish the terrible user experience they're used to? Maybe that much, I'm not saying it's unfair.
3rd Gear: Volkswagen Raises $3.5 Billion For 'General Capital Purposes'
Volkswagen just issued enough bonds to rake in around $3.5 billion yesterday, and most of that debt was traded for dollars in what Bloomberg says is their largest "dollar-dominated" sale ever.
Don't read too much into this about the future of Volkswagen, because we all knew they were going to invest more money and target growth, especially in the United States.
What I'm more curious about what this says about the future of the dollar, and how that currency (despite a slight retreat thanks to Treasury yields) looks relative to the Euro. We've seen the chaos wrought by asian currencies, so it's worth keeping an eye on USD-EUR.
Hell, you could argue the Aussie Dollar killed the Aussie car industry for good, or at least accelerated its decline.
4th Gear: Auto Production Is Slowing Down, But By How Much?
Even though sales are rebounding from the crazy winter, that doesn't mean we've suddenly burned through all the cars produced at the end of 2013 and into early 2014.
You can't just stop a factory when sales dip a bit, and by not predicting the weather we saw the amount of unsold cars rise last quarter despite besting prior year's sales. Where are we now?
From Karl Henkel comes word that inventories are at about 69 days, which is a little over the 60 to 65 days people like to see, but an improvement over the 76 of March.
This presents a challenge for automakers. Idle too much during the summer and you don't have the products you need if there's a sales boom in the fall. Don't idle enough, inventories rise and you'll have to rebate to get them moving.
You know what still has value? The American consumer.
5th Gear: Skoda Gets More Awards
You know what's a great value? A Skoda.
Thus I'm happy to report that both the Skoda Octavia and Skoda Yeti have won awards from a website I've never heard of called honestjohn.co.uk which, I swear claims they determine their awards this way:
The data used to make the awards is taken from Google Analytics. It calculates the number of page views each car review has had in the 12 months from April 2013 to April 2014. The site gets around 1.6 million visits every month, with the majority of these users viewing car reviews.
That is insane, but at least more scientific than the way we score cars.
Reverse: Maybe GM Wasn't So Bad In The '50s Thanks To Sloan And Earl
On this day in 1956, executives from the Detroit-based automotive giant General Motors (GM) dedicate the new GM Technical Center in Warren, Michigan. Costing around $100 million—or about half a billion in today's dollars—to develop and staffed by around 4,000 scientists, engineers, designers and other personnel, the GM Technical Center was one of the largest industrial research centers in the world.
Neutral: Is Now The Perfect Time To Buy GM?
Or your last chance to get out?
Photo Credit: Getty Images