S&P auto analysts have made a big deal of their analysis that trouble in the US economy could hurt auto sales, and that this could undermine the turnaround that GM (GM) and Ford (F) are trying to fashion by cutting costs and introducing more fuel efficient cars. Perhaps that should not have gone to the trouble of telling Wall St. what it already knows.
Reuters writes that: "The strength of the U.S. economy remains the key wildcard to the automakers’ turnaround plans, S&P analysts Robert Schulz and Gregg Lemos Stein said in a presentation on Friday in London." In other words, if the companies sell fewer cars, the will lose more money.
S&P lists falling market share and labor negotiations as the two other primary risks to Ford and GM.
After a nice run, GM’s stock is now down about 2% compared with where it traded two years ago. Ford is off about 12%, and the Dow is up over 25%.
It may be that the S&P analysts have too much time on their hands.
Douglas A. McIntyre
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