Daily Archives: June 16, 2007

Will Cerberus Put Ford’s (F) Luxury Operation Together With Chrysler

Cerberus, the US hedge fund that will be taking control of Chrysler from DaimlerChrysler (DCX) is looking at buying the two luxury divisions that The Ford Motor Company (F) has on the block. The two brands are Range Rover and Jaguar.

The deal could make some sense. Without it Daimler association, Chrysler will not be affiliated with a parent that has a luxury brand (Daimler owns Mercedes). While a bid might face some opposition in the UK where the two brands are based, the opportunity of putting the two companies could be compelling in terms of cost savings and marketing. The British are not anxious to see any jobs cut by a new owner.

But, if Cerberus plays its cards right, it could own three auto operations that would give it a full spectrum of brands running from $100,000 luxury cars to pick-ups and SUVs to inexpensive sedans.

In other words, a real car company.

Douglas A. McIntyre

Posted on: June 16, 2007 – 11:12 am in Uncategorized

GM (GM): The Diesel Goes Green

GM (GM) is investing $100 million in a new plant to build reduced carbon-dioxide diesels that are also more fuel-efficient than current models. "It will meet the stringent 2010 emissions standards, and it will be compliant in all 50 states, making it one of the cleanest diesel vehicles ever produced," said Tom Stephens, GM’s vice president of global powertrain and quality.

While the new engines will initially be put into SUVs and pick-ups, the technology may give the company a leg up on "greener" vehicles and could eventually be used in cars.

Perhaps the hybrid is not the wave of the future.

Douglas A. McIntyre

Posted on: June 16, 2007 – 10:58 am in Uncategorized

Toyota’s (TM) New Truck Is Broken

GM (GM) and Ford (F) have had problems selling their Silverado and F-series pick-ups because fuel prices and falling home values have slowed the traffic to dealerships.

The problem has caught up to Toyota (TM) which launched it uber-pick-up, the Tundra, to much fanfare. The Japanese company believed that it could take share away from its US competition in the most lucrative product segment, further weakening their ability to compete.

It has not been that easy. Toyota has announced that it will offer $3,500 rebates on the truck along with all sorts of nifty interest-free financing.

Toyota continues to do well with small, more fuel-efficient cars, but its debut in the truck field has, so far, been a failure. It may be that the segment is a more "buy American" crowd, and that is a lock that is hard to pick.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: June 16, 2007 – 9:30 am in Uncategorized

Comcast’s (CMCSA) Secret Sauce

Comcast (CMCSA) has decided to put money into a tech start-up which increases the speed at which data moves across broadband connections. Time Warner (TWX), Cisco (CSCO) and Intel (INTC) have already invested in the firm, BroadLogic, according to Reuters. The news service reports: "The company (BroadLogic) makes two main types of chip-sets, the TeraPIX video processor and Wideband Receiver, which recover bandwidth for cable operators and enhance their platforms, according to Comcast."

If the new technology lives up to its promise, it will add to the arsenal that cable companies have to give fits to AT&T (T) and Verizon (VZ). The two telephone companies are building fiber-to-the-home infrastructures which create ultra-fast internet. The firms hope that their networks will help them deliver HDTV, VOD, broadband, and voice in bundled packages, something cable can do now.

One of the marketing messages from the telecoms is the fiber creates a faster connection than the cable companies can currently offer. But, BroadLogic may help even that playing field.

With landline business dropping as cable VoIP takes customers, AT&T and Verizon have had to look to cellular and, in the future, fiber, to continue their growth.

Comcast & Company may have found a way to undercut one of telecom’s advantages.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

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Posted on: June 16, 2007 – 9:11 am in Uncategorized

Pearson (PSO) To Bid For Dow Jones (DJ)?

As 24/7 Wall St. wrote on May 19, Pearson (PSO) is attempting to put together a bid to buy Dow Jones (DJ). Hearst, which co-publishes SmartMoney with Dow Jones, and GE (GE) which has a partnership through its CNBC website, have been approached to join the group making the bid.

Pearson is already in closely related businesses. It owns the Financial Times, FT.com, and 50% of the global magazine, The Economist. The company, which was founded in 1844, has many of the same principles as Dow Jones on matters of editorial independence. A bid from the company would be viewed as preferable to selling the company to Rupert Murdoch.

Pearson is much larger that Dow Jones. Last year, it had revenue of $8.1 billion and operating income of $1.1 billion. Its market cap is over $14 billion compared to Dow Jones at $5 billion.

A combination of the two companies could involve substantial editorial and distribution savings.

Douglas A. McIntyre

Posted on: June 16, 2007 – 2:10 am in Uncategorized