Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: David C. Burns who wrote (1041)	12/15/1998 11:27:00 PM
From: porcupine --''''>	Respond to of 1722

GM strike cost more than 36,000 loyal customers-study By Michael Ellis DETROIT, Dec 9 (Reuters) - Summer strikes at General Motors Corp. cost the world's largest automaker more than 36,000 customers and nearly $1.1 billion in revenues in the three months from July through September, according to a study released on Wednesday. GM customers, who rank as the most loyal in the industry, opted for vehicles from Ford Motor Co. and other automakers when GM dealers were unable to supply their favored car or truck because of the strikes. "Customers wanted to buy, but couldn't," said Karen Piurkowski, director of loyalty for The Polk Company, which named GM the winner in manufacturer loyalty for its annual loyalty awards on Wednesday. "Not only did GM experience the immediate loss of revenue for one-time sales, but they will also experience a larger long-term loss -- the loss of customers for life, estimated to be 10 times greater than the loss of a single sale." GM scored the highest customer loyalty in the industry, with 67.54 percent of GM owners opting for another GM product when they purchased a new vehicle in the 1998 model year, which finished at the end of September. Ford placed a close second with 65.30 percent of its customers returning and Toyota Motor Co. <7203.T> was a distant third at 51.88 percent, trailed by Chrysler Corp. at 49.40 percent. Chrysler completed its merger with Daimler-Benz to create DaimlerChrysler AG in November. GM's customer loyalty, fueled partly by its Loyalty First coupons offering rebates of $500 to $1,000 to tens of millions of GM owners, propelled its customer loyalty to more than 70 percent in the from October 1997 to June 1998. But the strikes, which crippled production in June and July, and the end of the Loyalty First program caused customer loyalty to plummet to 58.7 percent in the July to September period, Polk said. Separately, GM dealerships ran full-page advertisements in the Detroit Free-Press and Detroit News newspapers critical of GM's plans to switch control of hundreds of millions of dollars of advertising funds allotted to dealer groups. "Such news is extremely disturbing," said the ads, which asked for a sit-down meeting with GM Chairman Jack Smith to discuss the issue. "The proper mix of national and local advertising has been a potent combination for General Motors and its dealer network for several decades - to suddenly curtail one component of that powerful program is to deprive the local customer of information that applies specifically to his or her market or buying need," said the ads, which identified the dealer group as the "General Motors Dealers Coalition." A GM spokeswoman said the automaker has never heard of the coalition, and it has been receiving positive feedback on its advertising program, which it will announce at a later date. "Dealers have had significant input in the new marketing plan," said GM spokeswoman Donna Fontana. "We obviously have the same view with our dealers than local marketing is crucial." The industry trade publication Automotive News reported on Monday that GM's 750 dealer marketing groups would lose control of nearly $500 million in funds under the plan to transfer it to five newly-named regional GM directors. GM earlier this year restructured its North American marketing organization and its dealer support structure.

To: David C. Burns who wrote (1041)	12/15/1998 11:36:00 PM
From: porcupine --''''>	Respond to of 1722

S&P may cut Hughes Electronics Corp ratings (Press release provided by Standard & Poor's) NEW YORK, Dec 9 - Standard & Poor's today placed its ratings on Hughes Electronics Corp. and subsidiary, PanAmSat Corp. on CreditWatch with negative implications (see list below). The CreditWatch listings reflect Standard & Poor's expectation that capital spending over the next year will be substantially higher that previously assumed, causing significant erosion in Hughes' liquidity and resulting in a more aggressive capital structure. Higher investment is being driven, in part, by the need for risk-mitigation at PanAmSat, to protect against operating problems of the type that occurred over the past year, coupled with the unit's aggressive fleet expansion plan. Increased capital expenditures also reflect the significant growth opportunities that exist across Hughes' business lines, particularly in broad-band systems and direct-to-home broadcasting. Standard & Poor's will meet with management in early 1999 to review the company's investment and funding plans. Standard & Poor's continues to view Hughes and PanAmSat as a single economic entity, given the close operational ties between them. The linkage was underscored by Hughes' acquisition of an additional 9.5% interest in PanAmSat earlier this year for $850 million, thereby increasing its ownership stake to 81%. Hughes' and PanAmSat's corporate credit ratings are expected to remain the same. The ratings on Hughes and PanAmSat will continue to assume majority ownership by both entities' ultimate parent, General Motors Corp. (single-'A'/Negative/'A-1'). In the wake of General Motors' divestiture of other nonautomotive businesses in recent years, Standard & Poor's considers Hughes/PanAmSat to be a nonstrategic investment for General Motors. However, uncertainties regarding General Motors ultimate intentions are unlikely to be resolved over the near term, Standard & Poor's said. -- CreditWire RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS Rating Hughes Electronics Corp. Corporate credit rating A-/A-2 Senior secured debt A- Commercial paper A-2 PanAmSat Corp. Corporate credit rating A-/A-2 Senior unsecured debt A- Bank loan rating A- Commercial paper A-2