Detroit a city in bankruptcy is hosting the “Detroit Auto Show”. Long ago when Detroit was the home of Big Auto and what was good for General Motors was good for America; the Detroit Auto Show was the showcase of showcases.
Today the car manufacturers are exhibiting for old times sake. General Motors which is weaning itself from the tax-payers teats is beating the drum about a dividend increase. Forget about the huge loss the American tax-payer is absorbing [Something like $10 billion] Now that Uncle Sam has divested itself and removed some of those terrible socialistic shackles General Motors investors can now realistically expect a dividend.
The dividend is an important financial event. General Motors and its CFO Dan Ammann picked the wrong venue to quasi announce a dividend. Governance purists are gritting their teeth because its supposed to be the board of directors who declare a dividend. Not the CFO at a car show trying to boast truck sales. Possible lawsuits pending.
Seems they have missed the message for both. There is a way to sell trucks. Most truck buyers are not into PE ratios and Dividend Yields. Most investors are not used to getting their financial information at a truck show. At least not the dividend aspects.
The hoopla of a car show masks the cold sobriety needed to analyze dividends. Suspicious if you ask me.
George Gutowski writes from a Caveat Emptor Perspective.