The Business of Auto and Other Issues

Wall Street is enamored of tech companies and even though auto companies, certainly for the past few years, have been as technological as any companies in Silicon Valley or anywhere else, their stocks have been, many think, undervalued, simply because they are perceived as being a part of the “old economy.” But Bloomberg’s Keith Naughton points out on this edition of “Autoline After Hours” that U.S. auto stocks are, for the most part, “back in fashion.” He notes that so far this year GM is up 28 percent, Fiat Chrysler up 95 percent and Ford just 1.2 percent.

Wall Street is enamored of tech companies and even though auto companies, certainly for the past few years, have been as technological as any companies in Silicon Valley or anywhere else, their stocks have been, many think, undervalued, simply because they are perceived as being a part of the “old economy.”

But Bloomberg’s Keith Naughton points out on this edition of “Autoline After Hours” that U.S. auto stocks are, for the most part, “back in fashion.” He notes that so far this year GM is up 28 percent, Fiat Chrysler up 95 percent and Ford just 1.2 percent. Ford is the reason for the “for the most part.” (Yes, he notes that Tesla is—surprise, surprise—up, too, with a 66 percent increase.)

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GMCruise

But Naughton says that this increased valuation isn’t for the reason that you might think (no, it is not because of superb cars and trucks). Instead, it is because GM and Fiat Chrysler have highly appealing assets that could be spun off, thereby unlocking more value. In the case of GM, it is things like OnStar, Maven and Cruise Automation. For Fiat Chrysler it is Jeep. For Tesla it is because it is Tesla.

And, Naughton explains, Ford’s “problem” is that doesn’t have such obvious assets.

Naughton joins veteran automotive reporter Jeff Gilbert of WWJ CBS Detroit, Navigant Research analyst Sam Abuelsamid and me to discuss that and a variety of other automotive-related subjects, including the prospects for electric vehicles, the GM strike in Ontario, Canada, and CEO Mary Barra’s strong response to it, the proliferation of autonomous capabilities and the likelihood that we’ll be passengers in self-driving vehicles in the not-too-distant future, and a whole lot more on the show.

And you can see it all here.