Fiat Gets Going with Google; April Showers Bring Great Car Sales; Building-A-Profitable-Bear

Behind the wheel…

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It might just have been a bit of good luck that car company Fiat gets to team up with Google to engineer some self-driving cars. The company will supply Google with 100 Chrysler Pacifica hybrid minivans and it will mark the first time that Google shares its inside information with outside entities. If you’re thinking of saving up to buy one, don’t bother. They won’t be for sale. Besides, they’re minivans. Google has dealt with other car companies, like Toyota, except Google did the work on the cares rather than working together with Toyota. This collaboration is a sweet deal for Fiat, which has a lot of catching up to do in the way of technological advancements in their vehicles. Besides, the company is kind of low on cash and wouldn’t have had enough of it to make a meaningful investment towards tech upgrades. But with this new collaboration in the works, it doesn’t have to worry about raising money for that. How very convenient.

New car smell…

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Speaking of Fiat, global sales of the company sank around 2%, keeping up with the rest of the grim state of the global economy. But all was not lost as sales in the U.S. picked up 5%, selling 200,000 cars and trucks while dealing a minor blow to analysts’ estimates of a paltry 4.6% increase. Sales of Jeep also scored big compared to the same time last year as it increased 17%. But that’s minor compared to sales of Compass and Renegade automobiles which more than doubled. Sales of automobile in the U.S. in April were so good that it just might be coming off of the best April. Ever. Car sales are considered a fairly accurate barometer of consumer spending and last months’ numbers indicate that the economy, the U.S. economy, that is, is looking good and healthy. Individual sales of cars throughout the industry was up 3%, with a lot of help from SUV and pick-up truck sales. Unfortunately I did not contribute to any sales growth. The volume of cars sold told a very different and unpleasant story by dropping 3.5%. Some companies have also lopped off major chunks from their incentive programs seeing as how they tend to eat the bottom line. Not that this should come as any great shock but VW was down 9.7% as it continues its brutal journey back from its emissions scandal. Some analysts thinks the car industry is about to hit a peak. But apparently it’s just a cyclical issue and nothing that should cause you to lose sleep. Unless of course you’re in the business of selling cars.

Bear market…

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Build-A-Bear just released its earnings – yes, it is a publicly traded company – and the results didn’t exactly leave investors feeling…warm and fuzzy. Ya dig? The DIY stuffed animal biz that boasts some 400 stores picked up $3.53 million in profit, adding 22 cents per share. Too bad the company missed expectations of 37 cents per share and didn’t perform nearly as well as last year at this time when the company scored a profit of $6.82 million with 40 cents per share added. Revenue was up 1.7% to $95 million for the quarter compared to last year, but again, the workshops missed estimates of $96.6 million, fuzzy ears and all. To be fair, however, it will probably still get a fourth straight year of profitability, even if the numbers don’t wow investors. In the fiscal blame game, the company pointed the finger at some expenses tied to store remodeling, international expansion and the ever-pesky high tax rate. The board announced that it hired advisers to come up with “a full range of strategic alternatives.” Which is basically code for trying to figure out a bunch of ways to make more money. Investor J. Carlo Cannell, who happens to own an 8% stake in the company, feels that the board is the real problem and called them and their actions “financially unsophisticated, lacking in proper corporate governance and shareholder unfriendly.” Don’t hold back now, J. Carlo.

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By Jetta! 800,000 More VW’s Offend; B(u)y Jeep-ers! U.S. Auto Sales Don’t Offend; Call of Duty About to Get a Whole Lot Sweeter

This thing just keeps growing and growing…

Image courtesy of  fantasista/FreeDigitalPhotos.net

Image courtesy of fantasista/FreeDigitalPhotos.net

Just when you thought it was okay to start thinking about buying a Volkswagen, the company announced that yet another 800,000 vehicles are getting caught in the toxic wind of the company’s emissions probe. This revelation was the result of an internal probe and while those cars are currently out and about, Volkswagen wants to reassure the public that the cars are still safe to drive. Just don’t breathe around them. The auto company set aside close to $7 billion hoping that amount will be enough to cover the repairs and lawsuits. It won’t be. It’s estimated that there are 11 million Volkswagens worldwide that currently have the illegal software installed. Now it’s up to newly crowned CEO Matthias Mueller, who came over from Porsche, to help save the embattled car company, which already lost a third of its value and reported its first quarterly loss in 15 years.

Speaking of cars…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

But on this side of the pond, car companies are having a much better day than Volkswagen. In fact, GM and Fiat Chrysler are currently in the wonderful throes of their best two month stretch. Ever. Well, in 15 years anyway. Even if you weren’t one of the lucky ones to have purchased one of those vehicles, it’s still good news since increased automobile sales indicate that the U.S. economy is in fairly decent shape. Ford did okay and Nissan did a little better. But nothing like GM, whose sales were up a nice beefy 16%, even though analysts only thought its sales would increase 12%. The company did especially well with a little help from its pricey truck lines and SUV’s. Fiat Chrysler’s sales were up a very respectable 15%, selling over 195,500 cars just last month. However, the company had a humongous boost from its Jeep brand which saw a massive 33% increase. This makes it the 67th consecutive month of increased sales for Fiat Chrysler. But, what exactly, is the reason why all these people are running out and buying up cars? If you answered low gas prices, then score one for you. The national average gas price hit a new low of $2.20 a gallon, 85 cents less than last year at this time.  But low interest rates and a slew of manufacturer incentives in order to move out the 2015 inventory also helped matters. A lot.

Call of Candy Crush Duty…

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Image courtesy of foto76/FreeDigitalPhotos.net

What happens when you cross the “Call of Duty” with a bunch of confections? You get the biggest acquisition of a mobile-game. Ever. Even bigger than the much-hyped Microsoft acquisition of Mojang, maker of the very beloved “Minecraft.” That’s right, Activision Blizzard, video-game maker of perennial fave games, including “Call of Duty” and “Skylanders,” scooped up King Digital Entertainment, the force behind the highly addictive “Candy Crush,” for a whopping $5.9 billion. Activision Blizzard is getting the mobile confection game maker for $18 a share, a premium over its $17.84 closing price and $4.50 less than its $22.50 IPO.  But many are wondering if Activision’s purchase will pay off. On the one hand, this is a great way for Activation to get into the $20 billion mobile gaming industry. On the other hand, King Digital failed to impress with Candy Crush follow-ups, Farm Heroes Saga and Pet Rescue, leaving many to wonder if the company’s got anything left to show.  After all, its third quarter earnings weren’t exactly sweet and monthly active users came in at 474 million, down from last year’s 495 million.

Activist Investor Sets His Fiscal Sights on Congress; Ferrari Races to IPO; UPSet

Icahn do it…

Image courtesy of  iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Many U.S. companies are taking a breather for the moment since billionaire activist investor, Carl Icahn, has shifted his attentions away from struggling businesses and instead to Washington D.C. And just like he ousts under-performing CEO’s, he now plans to give the boot to under-performing congressman.  Icahn tweeted  earlier today, “I am starting a Super PAC with my initial commitment of $150 million to help end the crippling dysfunction in Congress.” I’m just wondering why his millions are going to be more effective than the millions of taxpayer dollars Americans have been throwing at congress until now. But I digress. Icahn, by the way, happens to be a dear pal of Presidential candidate Donald Trump. “Basically he’s by far the best of what I see out there,” and “The Donald” would like to install Carl Icahn as his treasury secretary. Laugh all you want, but with Trump pulling in some great numbers, you might end up crying come November 2016. This Super PAC has  more than a bit to do with the letter Icahn sent out to Congress this week demanding that it pass corporate tax reform legislation that would dissuade U.S. companies from leaving to other countries with more favorable tax laws at what Icahn calls “the worst time imaginable.” He also wants Congress to offer companies like Apple a “tax holiday” that would allow it to bring back its trillions of dollars at much much lower rate. That cash can then be used to invest and create jobs. Sounds fair.  Boom.

Ciao bella…

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Image courtesy of sattva/FreeDigitalPhotos.net

Ferrari, one of the world’s most valuable and utterly fabulous brands, made its U.S. stock market debut today in true Ferrari-style. Several of the high-performance, extremely pricey automobiles were parked by Wall Street, as the company stock opened at $52, the high-end of its range. And from there, the stock even cruised a bit higher. $893 million was raised and 17.18 million shares were dished out under the ticker symbol RACE. Catchy, huh? And just like it’s hard to come-by cars, there was more demand than there were shares. The IPO is a way for Fiat Chrysler to finance a $54 billion investment program that will help expand the Jeep, Alpha Romeo and Maserati brands. As for the Ferrari family, the founder’s son, Piero Ferrari, has a 10% stake and has now earned his billionaire badge with this IPO.  The Agnelli family, however, remains the biggest shareholder with more than a 30% stake in the company. In the meantime, Fiat Chrysler CEO, Sergio Marchionne, took time out of his busy morning from ringing the opening bell at the New York Stock Exchange to let the world know that he thought the EU’s charges that his company evaded $23 million in taxes “absolutely ludicrous.” He should really start hanging out with Carl Icahn.

Brown paper packages tied up with false claims…

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Image courtesy of Iamnee/FreeDigitalPhotos.net

UPS is not having a very good day after having to fork over $4.2 million to settle charges that it over-charged 17 states and three local entities. It seems the company falsely recorded packages reaching their destination on time when, in fact, they didn’t.  Customers paid to have packages delivered via next day service, however, those packages did not arrive by the promised time. These incidents ran from 2004-2014. UPS employees used “exception codes” and filed false claims that would excuse late arrivals for reasons like inclement weather and other difficult circumstances.  By using these codes, customers could not even file a claim to get a refund. And while whistleblower Robert Fulk can look forward to a piece of that $4 million pie, UPS has no plans to acknowledge any wrongdoing, even though the company already had to pay $25 million for a different settlement with the U.S. Department of Justice back in May for similar allegations. The company says it ponied up the settlement cash in order to avoid a costly litigation trial. Uh huh.

Walmart’s Court-ing Big Problems; What’s in a Name? Ask Chrysler, If You Can Still Call It That; Stuyvesant High Schooler Fails in Lying;

 Hitting a Wal…mart…

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Image courtesy of nirots/FreeDigitalPhotos.net

Walmart’s lawyers have been especially busy this year. But not to Walmart’s advantage, it would seem. The retailer just got word that a Pennsylvania supreme court upheld a lower court’s ruling from 2007 that it has to pay over $150 million to approximately 187,000 employees who sued the the company in a class action suit. According to the lawsuit, Walmart stiffed employees by not compensating them for rest/meal breaks, or actually making them work through those breaks and then not paying the unrested, hungry employees for that time. Of course, Walmart is considering appealing the ruling, whose amount is sure to put a major dent in its quarterly earnings. I’m guessing you’re not as choked about that as Walmart execs are. Then there was last weeks’ decision by a National Labor Relations Board administrative law judge who found that the US’s largest employer also threatened employees in California because they tried to organize. Back to today, the lawyers and family of John Crawford, who was shot inside a Beavercreek, Ohio Walmart , named the corporation in a lawsuit. The lawsuit alleges that Walmart did not provide a “reasonable place to shop” because a bb gun involved in the shooting was left unpackaged in the store for two days.

What’s your name again?

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Image courtesy of olovedog/FreeDigitalPhotos.net

Chrysler Group LLC it isn’t. Well, it was. Up until Tuesday morning when the automobile manufacturer announced it was changing its name  to “FCA US LLC.” Got that? Neither did I. But apparently this name fits in better, globally, anyway, with its parent company Fiat Chrysler Automobile NV. But it’s okay if you forget and call a Chrysler a Chrysler, because those cars will still be made and be called Chryslers, along with Jeeps, Dodge and Fiats, who are all also keeping their names. The company – and name – which originated in 1925, with some vision and assistance from the very industrious Walter P. Chrysler, employs 77,000 people all over the world and has 36 manufacturing facilities, with 23 in the United States alone.

He lied! He lied!

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Image courtesy of africa/FreeDigitalPhotos.net

Looks like Mohammed “Mo” Islam is not such a whiz kid after all. After a story appeared in New York magazine about a 17 year old Stuyvesant High Schooler who was rumored to have pocketed $72 million in the stock market, it turns out none of it was true.  The story was picked up by just about everybody, including this blog, and the young man and a friend were even scheduled to do an interview on CNBC to discuss their non-existent success.  However, New York Observer’s Ken Kurson, and a team of media and legal professionals uncovered the hoax, after noticing how so many many people questioned the story, which first picked up steam inside the hallowed halls of Stuyvesant High. Apparently the only trades Mohammed ever made were simulated ones and his fortune is more akin to the fake kind you might find in a board game. New York magazine did issue an official apology, but it seems that it’s the wrath and disappointment of Mohammed’s parents who will make Mohammed come to rue his dubious actions. According to Mohammed, his dad, “wanted to disown me. My mom basically said she’d never talk to me.” And who can blame them.

 

A Vrooming Good Time in November; #GivingTuesday – Think Black Friday for a Cause; The CEO’s Knows

No-vroooomber!!!!!

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

The automotive industry had a great November, especially toward the end with all those Black Friday and other holiday promotions. Companies posted some very merry sales. Well most of them, anyway. Chrysler Group rocked the month of November with a 20% jump thanks in big part to its ever-lovable, perennial fave Jeep Brand which had a record month and a 27% increase in sales of its Jeep brand cars. GM took in a very hearty 6.5% sales increase – a particularly impressive feat since its Cadillac brand took a huuuuge 18.7% plunge. But man oh man –  knocking 20% of sticker prices on Buick and GMC Brands certainly helped GM sell over 225,800 cars. Ford, however, told a very different tale as its sales took a 1.8% beat down. Apparently drivers are eagerly waiting for the newly redesigned 2015 F-150’s and Mustangs. After analysts finish adding up their numbers, it’s expected that 1.27 million vehicles will have been sold this November.

Give it up for Tuesday…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

As we bid adieu to the Blackest of Fridays and the Cyber-est of Mondays, let us usher in #GivingTuesday. Conceived in 2011 by a group of folks from the 92nd Street Y in New York City, the group started out with about 2,500 non-profit organizations participating in 2012. Today, over 20,000 non-profit partners are getting in on the action with thousands more worldwide asking you to give back with money, clothing, food, or volunteering that most precious of all things – your time.  Give a donation, and in plenty of instances, your donation will be matched. Tons of other organizations will even double or triple your donation. Don’t believe me? Go see – and give – for yourself. #GivingTuesday

Well if a CEO said it…

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Image courtesy of cooldesign/FreeDigitalPhotos.net

What happens when you survey 129 CEO’s to talk about the economy? Well for one, they don’t always agree with economists. Hmm. Case in point, the top CEO’s in the country, surveyed by an association called the Business Roundtable, feel the economy will grow by 2.4%. Economists beg to differ (okay, so maybe there was no begging) that the economy will grow at a higher rate of 3%. Potatos. Puh-tatoes. So who’s your money on? The Business Roundatble (BRT), by the way, “is an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy,” according to its highly  informative website. Other insights from the CEO’s: 74% of them expect their companies’ sales to go up. They also expect a nice little rise in their employment within the next six months. All good things, of course.

Hey Big Spenders, You Auto know and Why’d You Leggo of Your Eggo?

Score one for the consumers…

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Image courtesy of anankkml/FreeDigitalPhotos.net

People have been shopping lately – a lot – as evidenced by a big jump in consumer spending for March. In fact it was the most spent money in five years. People bought cars, furniture and lots of other merchandise. Household purchases account for 70% of the economy and consumers helped to stimulate the economy with a .9% increase. Go consumers! That’s especially good news since the release of that dismal report showing the economy only grew by a teeny tiny .1%. But alas, jobless claims were up for the third straight week when 344,000 filed people filed unemployment claims. That number was up by 14,000.

Vroom vroom vroom…

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Image courtesy of sattva/FreeDigitalPhotos.net

The auto industry has been bombarding Wall Street with its earnings today. Ford missed the mark with sales that were down by .8%. Analysts predicted it would have a 3.1% gain. Chrysler was up 14% over the same period last year but missed their estimates by 2%. However, they probably weren’t terribly distraught since its Jeep brand had its best monthly sales ever. Ever. But the biggest head scratcher was scandal-wracked GM. It was up 7% despite the fact that its recent recall debacle just about destroyed its quarterly profits. According to CEO Mary Barra, the recall debacle had “no meaningful impact on sales.” Coincidentally, GM is helping to put together “the first shipping container homestead.” It’s exactly what it sounds like. The project will be made primarily from scraps from one of its plants. One company’s scraps is another man’s shipping container homestead.

Snap crackle drop…

Image courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net

Image courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net

Apparently you don’t gotta have your Pops. Kellogg’s, the maker of such iconic products as Eggo Waffles, Pop Tarts and Apple Jacks (my personal favorite) is watching its revenue crumble this quarter by 3%. It pulled in $3.74 billion when Wall Street was hoping it would pull in $3.81 billion. Increased competition, particularly from allegedly healthier alternatives (think Greek yogurt and breakfast sandwiches) has caused first quarter revenues to go soggy. Then there’s that whole McDonalds/Taco Bell breakfast war where the two fast-food chains want you to forego breakfast at home entirely. But Kellogg refuses to refuses to go down without a food fight and is rolling out…are your ready for this? A drinkable cereal. BOOM! Then it plans to further tackle those pesky healthy obstacles showcasing the finer nutritional points of a bowl of cereal swimming in milk. However, I suspect they wont be using Fruit Loops for that campaign.