GM IPO: It's Kind of a Big Deal

On Wednesday (the 17th), GM announced its IPO, priced at $33 a share, a bit higher than expected. It will turn the US government into a minority shareholder (as opposed to holding 61%), paying back billions of dollars to American taxpayers. Here's a rundown of the IPO from the WSJ:

After the market closed Wednesday, Wall Street underwriters set the price on 478 million common shares, with another 71.7 million expected to be sold if bankers exercise an overallotment option known as the green shoe.

The underwriters also boosted the size of a planned preferred stock offering to $4.4 billion, which could also be increased in the green shoe by another $650 million. If the decision is made in the next few days to exercise both overallotments, the deal could raise a total of $23.1 billion.

The deal grew in size over the past few weeks, driven by better-than-expected demand from U.S. mutual funds, according one person familiar with the deal.

Proceeds from the sale largely will go to the U.S. government, which owns 61% of GM after restructuring the car maker last year in bankruptcy court.

The auto maker has returned $9.5 billion of the $49.5 billion the U.S. spent to rescue GM last year. The Obama administration will seek to recoup the rest through the sale of stock over the next couple of years.

Dennis Berman and Simon Constable discuss how GM's underwriters achieved a high opening price for GM's IPO, an effort that will help to return billions of dollars of taxpayer bailout money to the U.S. Treasury.

The U.S. Treasury, which has kept close tabs GM's operations since bailing out the auto maker last year, will reduce its oversight role after initial public offering on Thursday, people familiar with the matter said.

This is great news for everyone involved in my view. After the IPO, the US taxpayers will have about 2/5ths of their bailout money repayed. GM will have an infusion of capital, in conjunction with the federal government's role in oversight reduced.

How about the investors? What does GM going public again mean for them?

James B Stewart, writing for Smart Money, has this to day:

Along with other automakers, GM should benefit from cyclical trends in its favor. After the recent financial crisis and severe recession, there’s tremendous pent-up demand. An improving economy, higher employment and rising consumer confidence should translate into solid growth in North America, and GM should fare even better in emerging markets (in which it has the largest market share).

So let’s concede this is a good time to be buying auto company shares, and that GM in particular seems an attractive candidate for further market share gains. How do the numbers look?

Price-to-earnings math gets tricky, because quarterly earnings have been erratic for car makers over the past year. If we assume the most recent quarter is representative of quarters to come, GM trades at 5.1 times earnings compared with 8.5 for Ford at 8.5, 26.8 for Toyota and 10.2 for Honda. In other words, GM still looks cheap.

This may in part reflect the political and business reality that this is an initial public offering that can’t afford to flop. A successful offering is essential to GM’s campaign to shed its old stodgy, loser image and shed the taint of government ownership. And the government (which doesn’t seem to be meddling in day-to-day management but remains the largest shareholder) needs a successful offering to enhance its prospects of recouping the massive taxpayer investment.

Of course there are risks, as in all IPOs. There’s a list of them in the GM registration statement. While I’m encouraged by GM’s progress, I believe it still has a long way to go before it achieves its vision of building the world’s best cars. Based on my last visit to the auto show, I’d say its new product line up doesn’t yet match Ford’s. But it has plenty of new vehicles in the pipeline, including the much-anticipated Volt.

So my advice is, call your broker and ask if you can get some shares. (Thirty-five underwriters are participating in the offering.) I intend to. Demand seems to be running high, and if my analysis is any indication, it’s no wonder: Within the stated offering range, GM shares are a great deal.

Another writer for Smart Money, Alyssa Abkowitz, adds more to the case for buying GM:

Does GM really deserve the flashy IPO parade? On paper, the reengineered automaker boasts a phenomenal balance sheet, with strong cash flow, and a conservative price-to-earnings valuation, even after the pre-IPO bump. In the third quarter, the company posted earnings of $2 billion on sales of $34 billion – its biggest profit in more than a decade. Analysts note that better pricing has helped the company’s profits; the new Buick LaCrosse, for example, sells for about $7,800 more per unit compared to last year. “Simply put, GM makes products that consumers are willing to pay more for than they once did,” notes David Whiston, an auto analyst at Morningstar. GM also has a strong presence in China and other emerging markets where auto demand is growing. That’s one reason, says Schuster, that “there’s good reason to believe the company will outperform.”

If results from its primary rival, Ford (F: 16.68, +0.17, +1.02%), are any indication, GM’s shares could thrive. Ford is on track to post its first consecutive annual profit increases since 1993 – all while being celebrated in the media for avoiding bankruptcy and a bailout. “Ford is trading really well,” says Matt Therian, an analyst at IPO research firm Renaissance Capital; its shares are up by 60% since mid-summer. But by some measures, GM is actually performing better than Ford: in the third quarter, for example, Ford earned about $2,700 in profits per vehicle it sold in North America, while GM earned around $3,000 for each vehicle.

Of course, there are still plenty of reasons for investors to be skeptical. For one, GM’s common stock investors won’t see dividends for a long time. That’s because the government has to get more of its $49 billion investment back from GM before any penny goes elsewhere. While the company has crept into the black, its sales are still far below their pre-wipeout peaks. There’s also the question of how long the “Government Motors” stigma will hang over the company and whether the auto giant’s financial restructuring has addressed all its issues, including its continuing obligations to retirees. “Investors will remember the problems of the old GM,” Therian says, and that could weigh down the stock price.

It seems to me that the benefits outway the costs. Anyone who wants to invest in the auto industry MUST give GM a long look. Auto sales are starting to rebound, so now is a great time to buy.

For more on auto industry investing, here's a great piece by Jonathan Hoenig:

http://www.smartmoney.com/investing/stocks/fords-a-great-story-but-hondas-the-better-stock/

Tata Motors' Nano isn't Very Safe

The car industry is one of the more globalized industries. GM and Toyota, among others, build cars on every continent (minus Antarctica, obviously). Automakers are always trying to gain the upper hand in the Chinese market, which is basically the biggest market for car sales since the U.S. has slowed its appetite for autos because of the recession.

India, you would think, might be pretty big too, since it is the second most populous nation on earth. However, you would be wrong. Unlike China, there aren't a whole lot of middle-class or upper-class citizens and poverty is widespread. So while a Buick might sell well in Beijing, this is not the case in India.

India's own Tata Motors began selling the Nano throughout its domestic market in March of 2009. Now, they are having safety issues:

Tata Motors Ltd. (TTM), maker of the Nano, said Wednesday it will offer buyers of the world's cheapest car additional safety equipment free of cost and clarified it won't recall any of the units.

The Press Trust of India earlier in the day reported that the company, India's largest auto maker by sales, will recall some units of the minicar to add safety features, citing Tata Motors' managing director for India operations, P. M. Telang.

"We have decided to make the car even more robust. We will do this by providing additional protection in the exhaust system and the electrical system," the auto maker said.

"These actions don't constitute a recall."

Some customers in India have reported incidences of the minicar catching fire. But after investigating in May, Tata Motors said that there aren't any manufacturing defects and that such episodes have been because of the installation of additional electrical equipment or due to some material on the exhaust system.

Why does this matter?

This incident illustrates are very important fact about the world auto industry. Standard in Western Europe, North American, and Australia are much more strict than those in China, India, Russia, and Africa. This poses a very serious challenge for auto makers as they attempt to expand their global reach. For companies used to strict safety standards, they must adapt their vehicles to sell in poorer markets. Safety features are expensive, so U.S. and European automakers must adapt to compete in poorer parts of the world were safety isn't a big concern.

Automakers in less-developed countries must spend a lot of money on safety feature research to compete in areas with stricter controls.

Other than the quote from the article, this has been my opinion based on what I have read and learned about the auto industry throughout the world.

Two Big GM Stories

This week I stumbled on two big stories about GM. First, GM has decided for sure how many dealers to keep. At one point they were gutting much of their dealer network, but they have now settled on 4,500 dealers. From Fox Business:

General Motors will move forward with 4,500 dealers after the automaker, under pressure from Congress angry with j

ob losses, reversed planned closures of more than 800 franchises, the company said Monday.

GM finalized dealership closures and franchise reinstatements over the weekend, one of the final pieces of business to be checked off before beginning its presentation to investors this week on its proposed share sale.

The public offering is designed to return GM to public markets and shake off the government's controlling ownership.

The U.S. Treasury obtained a nearly 61% stake in GM in return for $50 billion in taxpayer Bailout and bankruptcy financing in 2009.

The automaker said it intended to stick with the decision to terminate 1,233 dealerships as of Sunday following months of arbitration and despite continued pressure from lawmakers, including an Ohio delegation that includes House Republican Leader John Boehner, to keep more small businesses open in a struggling economy.

I think that, while it is good for GM to be saving jobs, this move is financially bad for them long-term. No company should be pressured by Congress on how to act, except in instances with already existing regulations. This is one of the big pitfalls of the governments 61% stake in GM. Un-American things start to happen.

However, GM will look good for saving jobs, yet I expect them to further shave down the dealer network once they are free of the federal government's coercive control.

As the Fox Business piece mentions, GM is going to be issuing an IPO very soon. Here's a story from the WSJ:

The U.S. will cut its ownership stake in General Motors Co. below the symbolically important 50% to about 35% when the car maker relists its stock later this month, according to new figures the company plans to disclose Tuesday, but it will be tough for the government to break even on its investment.

Neal Boudette discusses GM's IPO plans, which will raise up to $10 billion and cut the government's stake to below 50%.

The new projections by GM say the company could have a stock-market value at the start of trading of $50 billion—about the same as the solidly profitable Ford Motor Co.—and that it could be as high as $60 billion, said people familiar with the plan.

But for the U.S. to break even through sales of the rest of its stake, the share price may need to rise more than 60% from its initial level, to about $50.

The initial public offering plan envisions the shares would be priced at $26 to $29 each, these people said. The actual price of the stock to be sold in the IPO would be set about Nov. 17, and the sale would take place the following day.

Through the IPO, GM plans to sell 24% of its total shares, or about $10 billion worth, based on the midrange of the share-price estimate.

Ultimately, this IPO will be very good for all parties, in my opinion, because it will pay back the government and will loosen the government's grasp on GM. GM will also be a great investment because they are still in the top three globally for car sales, but now they have much less debt and dead weight since going through bankruptcy. Moving forward, GM is a company to keep a close eye on. Lots of great new products will be coming out soon, so I expect sales, profits, and the stock price to increase in the near future.

Chevy Volt: What is it?

Since GM's announcement of the Chevy Volt, people have been wondering what type of vehicle it is. Hybrid? Electric Vehicle (EV)? What?

First, let's get some context from Media Post, a marketing blog:

Chevrolet unveiled its new Volt to the press last week, but revelations about the intricacies of the electric motor and small gas engine under the hood have some arguing that the company has a launch problem on its hands: they say the car is not a pure electric vehicle and Chevrolet should have made that clear at the outset. The car is, in fact, powered an electric motor, with a small gasoline engine that comes on when the battery approaches depletion after about 60 or so miles of electric-only driving.

What has some observers riled is that on its extended-range mode the car's gasoline engine sometimes helps turn the wheels as well. Thus, semantically, the car's a hybrid, not an electric, they argue.

A site called Green Car Advisor reportedly noted this in June, but with the weekend event, where the company's technical explication included news about the car's extended range capabilities -- and the fact that under those circumstances the gas engines helps turn the wheels -- the web started the echo machine, with terms like "Volt Gate" banging from site to site like a Ping-Pong ball.

Edmunds.com's InsideLine said General Motors had duped the press: "Even conceding that all engineering projects involve compromise and chalking that phrase up to marketing hyperbole, the Chevy Volt isn't as electric as GM pretends it is," said the column. "And it isn't as electric as GM has been saying for the past three years." The article went on to say the Chevy Volt is a plug-in hybrid with more in common with Toyota Prius "than the marketing hype led us to believe."

GM argues that "electric vehicle" still fits because the drive train doesn't involve direct mechanical connection between the engine and the drive wheels. "In extended-range driving, the engine generates power that is fed through the drive unit and is balanced by the generator and traction motor. The resulting power flow provides a 10 to 15% improvement in highway fuel economy."

Pamela Fletcher, GM's global chief of global engineering for Volt and plug-in hybrids, tells Marketing Daily that the gist of the technology is that there are two ways to direct power flow through the Volt's drive unit in range-extending mode.

"First, we pull energy through the battery to the wheels. At the same time we have internal combustion engine connected to the generator motor replenishing the battery." She says that method is fine at lower speeds but becomes terribly inefficient at high speed, where that configuration becomes like rowing a boat with an oar that, rather than dipping in the water, connects to another oar that pulls through the water.

"It's just very inefficient," she says, explaining that power must take a circuitous route to get to the wheels. "Instead, when we get to higher speeds, we have clever solution where we put the combined power to the wheels on a planetary gear set." Jeremy Anwyl, CEO of Edmunds.com, says all of that definitely makes for a better vehicle. However, it also makes for a hybrid, at least under certain circumstances. "I think the confusion is an exercise in semantics," he says. "And it flubbed the launch of the Volt. GM has made a point of coming in here over and over, selling us story that the Volt is not a hybrid, not another version of Prius, but that it's an electric vehicle that only charges the battery. I think part of the reason our editors are wound up about it is we bought it. And repeated it."

Okay, that's a lot of information, but I think it is necessary to have some context before delving into a substantive discussion.

Clearly the Volt has certain attributes of an electric vehicle, mainly, the ability to travel 25-50 miles on electric power only. You plug it in, charge it for ten hours, then take it for a short spin. Nissan's Leaf is a recently revealed electric car, and it too is charged from a wall outlet and able to take a short spin (although more than double the distance of the Volt).

But what the Leaf lacks is an on-board internal combustion engine to increase the driving range. With the Leaf, once you run out of juice you're stranded. The Volt, on the other hand, has a gas engine that increases the potential driving distance. In this way it is like the Prius, except the Prius operates in an entirely different way. It can never run on electric power alone: From o-20 mph is runs on electric, beyond that the gas engine kicks in. With the Volt, you can cruise at highway speeds on solely electric power.

The guys at edmunds.com need to stop whining. The Volt now appears to have more in common with the Prius than originally thought, but that's probably a good thing. The longer range makes the car a more reasonable replacement for gas-only vehicles. Unlike the Prius, the Volt can run solely on electric, making it a lot more technically advanced.

These recent developments, rather than anger me like the people at edmunds.com, make me more enthusiastic about the Volt's success. With just the electric motor to power the wheels, with a gas-engine to recharge it for backup, the car seemed less real-world realistic. The gas-engine, under that configuration, would never directly power the wheels, making the system less efficient. The news that the Volt's drive-train is more complicated than expected, allowing for combined electric-gas engine operation, means that it is even cooler than originally thought.

Call it what you want, but the Volt is the most innovative car to be released since the Prius. This is a new type of hybrid-electric vehicle hybrid. A double hybrid.

GM cuts Historic Deal with UAW

General Motors and the United Auto Workers, the largest automotive worker union, reached an historic deal to manufacture a subcompact car in the United States. At a time when many US plants face closure or reduced operation, this is great news of workers, consumers, and management.

Dave Barkholz of Automotive News reported this news on Monday, October 4:

The UAW has negotiated a landmark local labor agreement with General Motors Co. that should allow the automaker for the first time to produce a subcompact car profitably in the United States.

The agreement calls for just 60 percent of all hourly workers at GM's assembly plant in Orion Township, Mich. -- where the Chevrolet Aveo will go into production next year -- to receive traditional production wages of $28 an hour with full benefits, said Mike Dunn, shop chairman for UAW Local 5960.

The other 40 percent will receive a so-called Tier 2 wage equal to roughly half that of so-called legacy workers.

Effectively, that means about 900 of the 1,200 to 1,500 workers on layoff at the plant will be able to return at full wages and benefits, Dunn said. The remaining workers on layoff will have the option of coming back with Tier 2 wages and full benefits or seeking a transfer to another GM plant, he said.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101004/OEM01/101009947/1261#ixzz11bhIueXd

I believe this deal is good news for all involved parties. Not only will it put laid-off workers back to work, it will also cut GM's wage costs, allowing the company to competitively manufacture a small and fuel efficient car for the US market, the Chevy Aveo. Currently, the Aveo is manufactured in South Korea. It is an underwhelming vehicle at best. When it first came out, it sold pretty well because it cost just $10,000. People looking for a really cheap new car found one in the Aveo. But over the past few years Honda brought the Fit to US shores, as did Nissan its Versa and Toyota its Yaris. These three cars are leagues better than the current Aveo.

The next-generation Aveo, on the other hand, it a sporty-looking machine with a fairly nice interior (for a subcompact). This small car will allow GM to be competitive in the subcompact segment, and they should be able to turn a profit on the selling of this car. According to Mike Dunn of the UAW, "The wage agreement is expected to reduce GM's labor costs enough that the automaker can make a profit on the small car."

For the most part, subcompact cars are not made in the USA. Because of the cars' cheapness, labor costs are too high to manufacture subcompacts in America. For example, Ford's new small car, the Fiesta, will be manufactured in Mexico, where labor costs are lower.

Unionized workers would not typically be open to the lower wages imposed in this deal, but with the sharp decline of auto sales, and the subsequent lay-offs, many workers are just happy to have a job.

I find this deal encouraging, especially as GM continues to roll out highly competitive vehicles to compete with the like of Toyota and Honda. This deal between GM and the UAW is just one small step on GM's rode to redemption.

The Toyota Way

Toyota is not just a leader in the automotive industry; it is also influential in the world of business management. "The Toyota Way," as it is called, is the set of principles and leadership techniques that Toyota uses throughout its global operations.

Here are the fourteen principles (from the book The Toyota Way: 14 management principles from the world's greatest manufacturer, available for preview at http://books.google.com/books?id=9v_sxqERqvMC&lpg=PP1&ots=g6SVeCsLKA&dq=The%20toyota%20way&pg=PA1#v=onepage&q&f=false):

1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.
2. Create a continuous process flow to bring problems to the surface.
3. Use "pull" systems to avoid overproduction.
4. Level out the workload (be the tortoise, no the hare)
5. Build a culture of stopping to fix problems and get quality right the first time.
6. Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.
7. Use visual control so no problems are hidden.
8. Use only reliable, thoroughly tested technology that serves your people and processes.
9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
10. Develop exceptional people and teams who follow your company's philosophy.
11. Respect your extended network of partners and suppliers by challenging them and helping them improve.
12. Go and see for yourself to thoroughly understand the situation.
13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly.
14. Become a learning organization through relentless reflection and continuous improvement.
    

I believe that these principles are a large part of Toyota's success. Despite the recent recalls and runaway RAV4s, Toyota remains the worlds number one automaker. In light of the recalls and evidence of Toyota trying to cover up the problem, some of these principles may seem a bit ironic. However, that in no way reduces their importance in explaining Toyota's success.

Many other business managers and supervisors have implemented the Toyota Way. These principles apply to any industry that seeks to have more effective management and long-term success.

Toyota has become an influential leader in the auto industry by following these principles. And by proving the success of these principles, they have become one of the most influential companies in the world, as more and more executives mimic the Toyota Way.

GM and other car companies should do themselves a favor and adopt these principles. Just don't ignore them when it's convenient, as Toyota did during the recall scandal. A runaway Camry is one thing, but a runaway Escalade would be even more frightening.

Li-ion Motors

Li-ion Motors Corporation is a high-tech company that is " focusing [its] resources and efforts on the development, manufacturing and marketing of high speed lithium-powered vehicles" (http://www.li-ionmotors.com/about.php)

Although incorporated in April 2000, Li-ion Motors (Li-ion is short for lithium ion, the type of battery used to power electric cars) emerged in the industry after 2003, when they began to develop a "patented state-of-the-art Battery Management System (BMS)."(same source as above)

On September 16th, Li-ion was awarded the Progressive Automotive X-Prize for the Alternative Side By Side class(same source as above).

By winning the award, Li-ion was caught the attention of the automotive establishment. According to the company's website:

Automotive manufacturing giants, like Nissan and GM, have spent tens of millions of dollars on EV innovations and will still have to fine tune their technology before making it available to the public. For other manufacturers, licensing Li-ion’s technology will save them the millions of dollars, eliminate years of research and development, and will result in a state-of-the-art, fully functional, tested and proven prototype within four months of licensing.

The site also references the BP oil spill and how their technology reduces the need to consume oil.

At this point, the competitive landscape has not been changed much by this company, but I expect that, after winning the X-Prize, auto companies might consider working with Li-ion to develop an efficient electric vehicle. Electric vehicles are becoming an ever more important part of the automotive industry, and consumers can expect more electric vehicles to come on the market in the next decade. Li-ion will be part of this, giving automotive companies an easier way to produce electric vehicles by reducing the need for research and development.

In the future, this company and others like it will give auto manufacturers a less-expensive alternative to the kind of R&D that GM and Nissan did to create the Volt and Leaf, respectively.

Interesting Info

Some interesting info I found while researching for the finance lab. I thought I'd share this with the group, since it wasn't really relevant to the project but could be relevant down the road:

Automakers disclose three important monthly statistics that indicate financial performance:

1. Motor vehicle production: This indicator shows how many units auto companies have produced in a given month. If production is increasing, auto companies may be spending more money to produce vehicles, hiring more workers, adding shifts to manufacturing plants, and anticipating greater sales volume.

2. Retail sales: This shows the amount of auto sales by a company’s affiliated dealerships. Greater sales volume can be compared to manufacturing volume to determine if a company is producing too few vehicles to meet demand or producing too many. In the first case, too few vehicles will raise the price (this was seen during the Prius’ heyday, when dealers would mark up the price due to high demand and low supply), and in the second case, too many vehicles will result in price reductions by both company and dealerships, leading to lower profits (an example is the large employee discount that GM gave to consumers to purchase GM vehicles).

3. Dealer inventories: This figure shows how many vehicles dealers have on hand. If cars are sitting on the lot and not selling, this not only hurts the dealer but also the manufacturer, by increasing manufacturer inventories and possibly leading to a reduction in production Automakers will also increase marketing efforts if a particular model is not selling as expected.

The Ethical Issues Surrounding Dealer Closures and Bailouts

In the midst of all the restructuring, taxpayer-funded bailouts, and bankruptcy, General Motors and Chrysler decided to alter their dealer networks, closing down hundreds of dealerships in the process. In 2009, GM vowed to close four-hundred dealerships per year until 2012 in an attempt to increase company profitability. In the U.S., GM has over 6,000 dealers, compared to Toyota with about 2,000.

According to GM's viability plan presented to Congress, the company would like to reduce the number of dealerships to 4,000. However, GM made a surprising decision recently. From edmunds.com:

GM recently reinstated many dealerships that were previously notified of franchise agreement terminations. On March 8, 2010, GM contacted 661 dealerships to negotiate terms of retaining the franchises. Other dealers contested the franchise agreement terminations through an arbitration process that ended on August 5, 2010.

Chrysler, also needing to thin its dealer network, cut the franchise agreement with 789 of its dealers.

For many families who depend on these dealership for their livelihood, the news has been devastating. However, families do not have to completely close their dealerships, rather, they can continue to sell used cars and perform automotive maintenance, which is how dealers already make the bulk of their cash. New car sales just create more potential service customers in the future.

Why is this an ethical issue within the industry?

Many dealer owners and customers have questioned the methods used to close dealerships. Some conservative commentators suggested the closings were politically based, since the government owns a majority of the company and the majority of the closures were in districts held by Republicans. Additionally, some questioned how GM could measure if a dealer was under-performing, since some dealerships, particularly in rural areas, were bound to have relatively low sales numbers.

Luckily, in June of 2009, some 50 smaller dealerships originally marked to be closed were spared, followed by more announcements that the dealership closures would be further minimized, like the information reported from edmunds.com above.

I believe that it was unethical for GM to close down so many dealerships so quickly. They were doing this not because it was a good business decision, but because of arm twisting from Washington. Should GM close some dealers? Sure, but widespread closures would not engender much good will among the American people, already furious over the bailouts for GM and Chrysler.

As for Chrysler, they had to close down some dealerships as well, but they have less than GM so the closures would not be as widespread. Still, many dealerships from both companies have gone under, especially former Saturn dealers who suffered when the brand was shut down.

Jalopnik has chronicled the abandoned dealerships with a picture slideshow. As you can see from the pictures, the empty showrooms are a strong reminder of how failed policies and bloated brands can bring down an automotive empire.

This is an ethical issue that has arisen just recently, as GM and Chrysler battled though bankruptcy and emerged trim and debt-free, thanks to an expedited Chapter 11 process. Many consumers have responded to the auto bailout by buying Ford products. Ford is an American brand that, unlike GM and Chrysler, had the foresight to bring in a gifted Chief Executive, Alan Mulally, formerly of Boeing, to help make the brand competitive and financially stable. Ford had succeeded and remained free of government ownership.

In my view, it is unethical for a business to put itself in the position that GM and Chrysler found themselves, in need of a government bailout. Why couldn't the companies just file for bankruptcy like everyone else and get it over with. We were told by executives at both companies that the bailout would keep them out of bankruptcy, yet that didn't happen. I don't blame Americans for driving Fords instead of GM and Chrysler products.

Ford has shown corporate responsibility by not taking government money when that was the easy thing to do. In return, customers have rewarded the publicly-traded corporation by purchasing its products, and Wall Street has rewarded it by driving stock prices to nearly $12 a share most recently, up from a 52-week low of $6.61.