General Motors (hereafter, GM) -- presently, Motors Liquidation Company (MTLQQ) -- posted a narrower loss in the third quarter (Jul 10 - Sep 30) compared with the results depicted by "Old GM" in the first quarter, before the company was transformed by a stay in Chapter 11. GM, which began operations as a new company on July 10, 2009, has revealed a net loss of $1.2 billion for the quarter, significantly less than $6 billion it lost in the first quarter. The company’s earnings before interest and taxes (EBIT) before special items for the period were negative at $261 million. GM’s North American market showed a loss of $651 million while GM International Operations recorded a profit of $238 million. The improvement was attributed to incentive programs including "Cash for Clunkers" and stability in the international market, especially China, Brazil, India and Russia (BRIC). In particular, ...

Pundits greeted Angela Merkel’s convincing election win in Germany Sunday with a collective yawn. Commentators think the German economy is sluggish and over-dependent on exports, and believe that a change in the German government from a grand coalition to a center-right coalition will make little policy difference.

I think that’s wrong. It’s an erroneous viewpoint that’s symptomatic of the short memories of the chattering media. It’s also one that could cause investors to miss out on one of the best profit plays in the global marketplace today.

I’m talking about Germany – the real powerhouse of Europe.

The “New” Germany

From the 1950s to the 1980s, West Germany consistently delivered high growth rates and low inflation. West German engineering proved superior to any other on the planet. And West German living standards rose far above anywhere else in Europe.

Then came 1990.

East and West Germany were reunited and an

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  Incumbent German telecom carrier Deutsche Telekom (DT) is evaluating the acquisition of Sprint Nextel (S), the third largest US carrier. The company has reportedly initiated discussions and may submit a bid in the coming weeks. Deutsche Telekom operates in the US through its subsidiary T-Mobile USA, which is the fourth largest US wireless carrier, with 33.5 million subscribers.   Sprint has a current market valuation of $10.8 billion with a total debt position of approximately $21 billion. In order to finance the potential multi-billion dollar deal, Deutsche Telekom may need to seek funding from its shareholders, including the German government, which holds 32% stake in the company. Deutsche Telekom is pursuing several initiatives to revive its struggling business operations across Britain and the US. The company has recently announced the merger of its British subsidiary T-Mobile UK with France Telecom’s (FTE) Orange UK ...

Facts about the Opel deal emerging: Reuters reports on a company trustee who claims that more than €600 million of German aid has been set aside for upgrading the auto industry in Russia.  Putin has praised the sale as the 'right market choice'.   The EU will investigate the money offered by the German government to the purchasers of the unit.  The Chief economist from the European Bank for Reconstruction and Development has suggested that a ruble devaluation will not cure Russia's economic ills but rather moving away from commodities will herald economic growth.  'It is not a sustainable recovery yet in Russia or globally because it is based on massive government and central bank intervention': Arkady Dvorkovich is realistic about Russian prospects.  The ...

According to Bloomberg, Finance Minister Alexei Kudrin has said that the budget deficit may reach 6.8% of GDP next year, 4% in 2011, and 3% in 2012.  The Duma has recommended the ousting of banking lobbyist Anatoly Aksakov, whose comments earlier this year on devaluation shook the financial market, from the National Banking Council.  Car sales fell by 54% in August, the smallest decrease (year-on-year) in four months.  Belgium's Solvay has announced it has agreed to buy Sodium Group Investments Limited's majority stake in Russia's Berezniki soda ash plant for $230.2 million, Reuters reports.  The board of General Motors has met in Detroit under pressure from the German government to elucidate their plans for Opel.  Dixy, Russia's third biggest retailer, expects retail sales to rise by up to 18% this year.  Russia has been ranked...

General Motors is reconsidering its bailout plans for Opel/Vauxhall business in Europe. The company blew past an August 21 deadline to find a preferred bidder for a controlling stake in the business. Opel deal had been a bipartite race between two suitors, Canada-based auto parts supplier Magna International (MGA) -- backed by Russia’s Sberbank -- and Brussels-based industrial investment group RHJ International. Of them, GM's Board of Directors rejected Magna's offer on August 21, and RHJ International was opposed by the German government with an apprehension of higher job losses. GM's board has now instructed its management to consider new options for Opel, including putting together a $4.3 billion financing plan to rebuild the business rather than divesting it. The company intends to raise funds for the unit from the U.S. and other European governments, including the U.K. and Spain. The company is also vying for ...

The chairman of the German government-backed trust designed to oversee the sale of Opel has said that GM cannot afford to keep control of the European unit, as it needs to focus on its fortunes stateside.  According to the New York Times, the company's Vice President maintains that it wishes to sell but that certain questions remain.  The president of AvtoVAZ, Boris Alyoshin, has resigned.  Russia plans to create a holding company to put together the state's stakes in the country's two biggest car makers, Avtovaz and Kamaz.  Car manufacturer Gaz is adapting to the conditions of a low-demand market, says its CEO.  The Moscow Times reports that the number of consumers planning to buy a car within the next year has doubled to 6%.  VTB has acquired rights to a controlling stake in developer Don ...

General Motors will choose a preferred bidder for a controlling stake in its European Opel/Vauxhall business today. The deal has become a race between two suitors, Canada-based auto parts supplier Magna International (MGA) and Brussels-based industrial investment group RHJ International.   GM sits uncomfortably in the deal amidst the German government’s bias towards Magna. This is because Magna has vowed to make most of its job cuts outside Germany if it wins the deal. Both the suitors had indicated they would cut Opel’s workforce by a fifth – about 10,000 jobs – to make the unit financially viable. GM is in a dilemma fearing that Magna, backed by Russia’s Sberbank, could capture Opel's technology for the Russian car industry. Thus, if Magna wins the deal, GM may lose Russia’s increasingly important market for its models such as Chevrolet. Magna and Sberbank are planning to manufacture Opel cars ...

Magna is pulling out the stops in its bid for Opel by increasing the amount of upfront capital it would pump into the company to €350 million, following criticisms from the German government about the size of cash injections offered by bidders.  Sberbank says it expects a verdict on the bid this week.  Beer manufacturers have pleaded with Putin to rethink a plan to triple beer tax saying it would precipitate the 'destruction of the industry'.  Avtovaz's output this year will be 59% less than that of last year.  The New York Times reports that the car manufacturer is contemplating making 27,000 employees redundant to slash costs, reports which the company has denied.   In a move to protect domestic car production, the Industry and Trade Ministry has suggested postponing the introduction of the Euro-4 fuel ...

General Motors (MTLQQ) is in talks with Canada-based auto parts supplier Magna International (MGA) and Brussels-based industrial investment group RHJ International for a stake in its European Opel/Vauxhall business.  Apart from the two companies, GM had earlier received bids for its Opel from China's Beijing Automotive Industry Corporation (BAIC). However, the company turned down BAIC since it was a major competitor in its most significant growth market – China. BAIC's chances are now rest mainly on GM’s failure to reach a deal with the other two automakers. If succeeds, BAIC would expand its operations in China as it had drafted plans to spend $2 billion on an Opel facility in the country.  Rumors had also spread that Italian auto major Fiat (FIATY) is vying for Opel, which would make it number two in Europe. However, the deal has not yet materialized on account of ...