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| Here’s your daily business briefing. - 🚗 GM rallies with buyback, dividend hike
- 🔍 Deep Dive: Range Rover thefts plunge
- 💸 VW brand struggles financially
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits.
Shriram
p/Shriram | |
| 1 | | GM announced a $10B share buyback and a 33% increase in its quarterly dividend, leading to a 9.4% stock surge. The accelerated buyback involves the immediate retirement of $6.8B in common stock, and GM reinstated its 2023 guidance, accounting for an estimated $1.1B impact from recent U.S. labor strikes. More: - The business has revised its capital spending projection for 2023 to $11B-$11.5B, down from $11B-$12B.
- Next year, GM intends to boost its quarterly dividend by 33%, or $0.12 per share.
- The carmaker has long-term goals, such as lowering business capital intensity and raising cost efficiency, and expects to offset the additional expenses from new labor agreements.
- GM CEO Mary Barra commited to an all-electric future, addressing challenges at Cruise, its autonomous vehicle subsidiary, and prioritizing safety and transparency.
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| 2 | | 
What the numbers say: Recent Range Rover models in the U.K. have seen a significant drop of over 40% in thefts, attributed to Jaguar Land Rover's $12.6B investment in security updates for 65,000 vehicles produced between 2018 and 2022. These updates, including software enhancements preventing keyless theft, resulted in reduced thefts in October 2023 compared to the same month the previous year, according to data from the Police National Computer database. Relevance: JLR's intensified security measures came in response to a surge in luxury SUV thefts, with the Range Rover Velar identified as the most stolen car in the U.K., posing challenges for insurance and impacting JLR's operations. More data: Per the last announcement, JLR has 168,000 orders in its order book, with the majority placed on Range Rover, Range Rover Sport, and Land Rover Defender models. | | | |
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| 3 | | Volkswagen's brand chief acknowledged financial challenges in the VW brand, emphasizing the need for improvement as the company focuses on electric vehicles. Despite high sales, the VW brand faces low productivity and high costs, prompting efforts to enhance its financial performance. More: - In 2026, the return on sales for the VW brand is expected to rise from 3.6% to 6.5%, as stated in a presentation given to investors by VW Group.
- As part of a more significant efficiency push for the switch to electric vehicles, the business is in talks with its works council over a cost-cutting plan for the VW brand.
- Staff reductions are part of Volkswagen's $10.9B savings plan, which aims to take advantage of the "demographic curve" by offering partial or early retirement agreements.
- HR board member Gunnar Kilian urges boldness, honesty, and the elimination of redundant processes and unnecessary elements for improved company outcomes.
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| 4 | | AbbVie revealed its intentions to purchase cancer drug developer ImmunoGen for $10.1B. After the announcement, ImmunoGen experienced an over 80% share surge, marking its highest close since November 2000, while AbbVie's stock increased by more than 2% after the acquisition announcement. More: - ImmunoGen is focused on creating antibody-drug conjugates (ADCs), medications used to treat cancer.
- ADCs are a significant focus in the pharmaceutical business because they target and kill cancer cells while sparing healthy ones.
- Stock increases are seen in several biotech businesses developing ADCs: Sutro Biopharma is up 16%, Mersana Therapeutics is up about 17%, and ADC Therapeutics is up almost 15%.
- The Nasdaq Biotechnology Index gains more than 1%, and the SPDR S&P Biotech ETF, which focuses on small and midsize biotech companies, increases 3%.
- AbbVie's $10B acquisition of ImmunoGen at $31.26 per share, a 95% premium, aims to bolster AbbVie's oncology pipeline, set to be finalized by mid-2024.
Zoom Out: - Pfizer's $43B acquisition of Seagen and Merck's collaboration with Daiichi Sankyo on three potential ADCs in a deal worth up to $22B highlight major developments in the pharmaceutical sector.
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| 6 | | Consumer Reports' 2023 Annual Auto Reliability survey highlights notable challenges in the reliability of electric vehicles, particularly related to charging and battery issues. On average, new EVs showed 79% more problems than gasoline-powered vehicles, while hybrid vehicles fared better, experiencing fewer issues than their gasoline counterparts; however, plug-in hybrids faced a more significant reliability challenge with 146% more problems. More: - In a ranking of 19 categories, compact automobiles, sports cars, and small trucks were among the most reliable EVs, while electric pickups were found to be the least trustworthy.
- According to Jake Fisher, Senior Director of Auto Testing at Consumer Reports, legacy automakers have limited experience with batteries, charging, and motors because of their difficulties implementing new EV technologies.
- With problems with paint, trim, body components, and climate systems, Tesla placed 14th in the poll. But it was the second-best U.S.-based car brand, behind General Motors' Buick.
- Tesla's motors, batteries, and charging systems showed fewer problems.
- The top 10 brand rankings were dominated by Asian automakers, with Lexus at the top and Toyota in second.
- Mercedes-Benz (29th) and Chrysler (30th) brought up the rear.
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| 7 | | Quick Hits: - Competitors are killing your efficiency. Read how Greenhouse gained $85mil in revenue from reps who used Klue over non-Klue users.*
- Open Text plans to sell its AMC business to Rocket Software for $2.28B in cash, reinforcing and expanding its focus on cloud and artificial intelligence.
- Approximately 50,000 people died by suicide in 2022 as a result of the mental health crisis in the U.S., according to preliminary data from the National Center for Health Statistics. It's the highest level since 1941.
- Shanghai-based travel service provider Trip.com reported a significant surge in revenue, jumping 99% to $1.9B in the third quarter.
- Chemours, with two others, will pay $110M to Ohio to settle claims linked to the production and sale of PFAS ("forever chemicals").
*This is a sponsored listing. | | | |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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