Auto Update

First, let's be clear that the domestic auto makers problems are not just incompetent management. No one is making money selling cars right now, not even Toyota, which posted its first quarterly loss in 59 years, $7.74 billion in the quarter ending in March, and, as the picture shows, is looking at more losses in the future, while Nissan posted a $2.4 billion loss.

Of course, the sight of GM executives frantically selling stocks as a trading window opened to allow them to sell their stocks without insider trading concerns.

They are also sending terms of sale sheets to the dozen or so bidders for the Saturn brand brand. It's primarily the sale of a dealer network and brand, rather than a sale of designs or factories.

Meanwhile, across the pond, Fiat is still negotiating a deal to buy GM's Opel division, and most of this is about how much can be extracted from the German government.

At the nexus of the two failed auto makers, both GM and Chrysler will be cutting dealers, which makes sense, and it's the urban dealers that will see most of the cuts, which, surprise means that minority owned dealerships will see it landing them.

Same old, same old.

In any case, it now appears that the 2 month bankruptcy is a fiction, with media reports that the bankruptcy will take 2 years, though the sale of assets to the new operating company should be finished well before this.

Meanwhile, Ford, which saw the storm coming, and accumulated cash to weather it, is now looking to sell 300 million shares of common stock in order to fund the Voluntary Employee Beneficiary Association (VEBA) that it negotiated with the UAW.

Finally, we have Ferrari threatening to pull out of Formula One because they do not like the new rules, most particularly the £40 million budget cap, which is intended to make more teams competitive.