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Faraday Future Insists it Isn’t Going Away

New plan calls for leaner management, second product, even an IPO – if it can stay in business long enough.

by Paul A. Eisenstein on Nov.14, 2018

In better days: Jia Yueting and Nick Sampson, helped unveil the FF91 at the 2016 CES.

Only a matter of weeks ago, battery-carmaker Faraday Future seemed ready to turn out the lights, co-founder Nick Sampson resigning and then declaring in a blog post that the company was “effectively insolvent.” But, despite a seemingly endless series of crises, including one that forced it to cancel a planned assembly plant in Nevada, Faraday’s new management team continue to project a surprisingly bullish take on their future.

Late Tuesday, in fact, the California-based company released a statement outlining its plans for the future, which included a new, “lean management” structure, and “fortified product plans” that not only include the original FF91 supercar but a second, more mainstream crossover.

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Of course, there is the minor issue of finding the necessary cash. Faraday’s latest crisis was kicked off when China’s Evergrande Health Industry Group backed out of a deal that was supposed to generate as much as $2 billion in capital. For the moment, the automaker says it is on the hunt for $500 million to get it back on track.

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Toyota Earnings Soar on Global Sales Surge

Automaker lifts full-year forecast.

by Paul A. Eisenstein on Nov.06, 2018

Strong demand for Lexus, especially in the Chinese market, helped Toyota deliver strong earnings.

Toyota Motor Corp. reported a 28% increase in its net profit for the July-September quarter, earnings buoyed by strong demand in key global markets, including the Americas, Asia and Europe.

The Japanese giant also advised that it expects to see earnings push past earlier forecasts for the full year, in part driven by unexpectedly strong demand in China. Sales of the Lexus brand, have been booming there, despite a slowdown in the overall Chinese market.

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Sales gains were only one of the factors that propped up Toyota’s bottom line, said Senior Managing Masayoshi Shirayanagi. Referring to aggressive cost-cutting efforts, he said, “We are steadily making progress toward achieving our challenge-level target.”

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Ford, VW Discussions Now Far More Wide-Ranging Than Originally Planned

by Paul A. Eisenstein on Nov.02, 2018

Ford and VW initially wanted to discuss cooperation on light commercial vehicles.

Talks between Ford and Volkswagen are covering far more territory than originally planned, when the two signed a memorandum of understanding in June that initially focused on joint development of commercial vehicles.

While Ford officials have told TheDetroitBureau.com there is no thought to an exchange of equity, virtually everything else seems at least open for discussion, with a number of key ventures being considered. According to various U.S. and European sources, these include joint development of a small pickup, cooperation on electrified and autonomous vehicles and possibly even collaboration on sales and marketing in trouble-spot markets, such as Europe and Latin America.

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Several reports have suggested that a major announcement could be in the offing, and a source close to the talks told TheDetroitBureau that “There could be an update by the end of the year.” But that person stressed that not all the discussions underway are likely to be resolved immediately, and could be spread out over months, even years – even “if everything (being negotiated) comes true.”

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GM Offering Buyouts to Salaried Employees to Cut Workforce

Automaker may terminate employees if buyout doesn't achieve results.

by Michael Strong on Oct.31, 2018

General Motors is offering buyouts to 18,000 employees as it seeks to streamline its North American operations.

After reporting a better-than-expected third quarter, General Motors is being “proactive” and offering voluntary buyouts to about 18,000 salaried employees in North America.

The offer is being extended to workers with 12 years or more experience and are designed to get ahead of rising costs, particularly in China. Employees were informed via a newsletter emailed Wednesday.

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The automaker reported a net profit of $2.53 billion during the July-to-September quarter, or $1.75 a share. A year ago, it lost $2.98 billion, or $2.03 a share, though that figure largely reflected the cost of completing the sale of its European-based Opel subsidiary to France’s PSA Group. (more…)

GM Handily Beats Earnings Forecast, Buoyed by Truck Sales

Shares soar in pre-bell trading.

by Paul A. Eisenstein on Oct.31, 2018

GM's Renaissance Center headquarters in Detroit.

General Motors delivered a positive surprise to analysts and investors on Wednesday morning, delivering significantly stronger earnings than had been forecast, buoyed by surging demand for its light truck line-up, including the completely redesigned Chevrolet Silverado pickup.

The announcement stands in sharp contrast to rival Ford Motor Co. which, last week, reported a significant decline in third-quarter income, despite strong demand for models like its F-150.

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GM said it earned a net of $2.53 billion during the July-to-September quarter, or $1.75 a share. A year ago, it lost $2.98 billion, or $2.03 a share, though that figure largely reflected the cost of completing the sale of its European-based Opel subsidiary to France’s PSA Group.

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Faraday Future “Effectively Insolvent,” Says Co-Founder

Battery-carmaker confirms second round of job cuts.

by Paul A. Eisenstein on Oct.31, 2018

Nick Sampson, (r), one of the Faraday Future founders, is shown with investor Jia Yueting, (l) at the debut of the FF91 concept in January 2016.

The California-based battery-car company Faraday Future is “effectively insolvent,” according to co-founder Nick Sampson who resigned on Tuesday.

His departure comes as the once-promising company prepares for a second round of mass layoffs, a Faraday spokesman advised TheDetroitBureau.com late Tuesday evening. Faraday had already laid off a sizable number of its approximately 1,300 employees last week as it struggled to find enough cash to continue operating.

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“There is a furlough pending,” said spokesman Jacob Brown, adding that Faraday needs to take “drastic measures, but the executive team wants to keep the company running.”

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Tesla’s Musk Says Company Focusing on What’s Next

Company looking to expand Model 3 production.

by Michael Strong on Oct.25, 2018

Tesla CEO Elon Musk is now focusing on the next task: another profitable quarter.

With a profitable quarter now in the books, Tesla CEO Elon Musk is looking to meet the next set of challenges, starting first with making a profit next quarter.

“It will be our aspiration for all quarters going forward,” he told analysts during the company’s earnings call yesterday. He also outlined additional goals for the company moving forward and dismissed negative notions about the company’s first profitable quarter in years.

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Musk said the company’s profit didn’t come at the expense of other things, such as cutting back on product development. In fact, he said he’d just approved the prototype for the Model Y and other improvements on the company’s second-generation Roadster. He confirmed the Model Y would be in production in 2020. (more…)

Tesla Bucks Analysts Predictions, Turns Q3 Profit

EV maker reports net income of $312 million.

by Michael Strong on Oct.24, 2018

Tesla's Model 3 production has been the focus of the company much of the year, and its paid off with profits.

He may not be much on meeting production deadlines, but Tesla CEO Elon Musk predicted the company would be profitable in Q3 and, well, it is.

The company reported GAAP net income of $312 million on $6 billion for its automotive business. Perhaps more importantly, it produced a better than 20% margin on the new Model 3, Musk noted.

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“It was a truly historic quarter for us,” he said during the company’s earnings conference call. “Our total cash increased by $731 million and we had free cash flow (operating cash flow less capex) of $881 million despite less than 10% of that amount coming from key working capital items.” (more…)

Tesla Could Have a Surprise as it Prepares for Early Earnings Announcement

Consensus calls for another loss, but a key short-seller has now gone bullish.

by Paul A. Eisenstein on Oct.24, 2018

Does Tesla CEO Elon Musk have a surprise awaiting analysts with today's earnings announcement .

Tesla stock has surged about 14% this week, largely driven by news that a long-time critic is suddenly singing a new tune.

Activist short-seller Andrew Left has long held a negative view on the California carmaker but this week wrote that Tesla is “destroying the competition,” while adding that “warning signs” that have scared off many other investors “have proven not to be significant.”

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Left and other Tesla bulls could find out if they’re placing the right bets when the company reveals its third-quarter earnings this evening. What professional gamblers might call a significant “tell” is the fact that Tesla has decided to move up the release of its financial report which originally wasn’t expected until early next month. Instead, it will be released today at 6:30 PM EDT. (more…)