Himanshu Patel Quotations

We still see more downside than upside risk to 2007 consensus earnings.

We're expecting both of them to do well. The French carmakers are safer than the Germans, partly because they have limited U.S. exposure and partly thanks to a fairly robust home market.

One of the likely sticking points in the pending sale of GMAC may well be resolution on Delphi, further emphasizing GM's interest in avoiding a labor dispute.

We think GM will see it as more of an opportunity than a risk to assist in a Delphi bailout, as it will likely be able to extract sizable UAW health care concessions in return,

We maintain our overweight (rating), as we think a recent correction in this well-diversified vehicle safety supplier has been unjustified.

We continue to believe TRW should benefit from growth in safety content per vehicle, its diverse content profile, and aggressive cost management.

We estimate production at the affected plants is around 1 million units annually, indicating around 4,300 units of lost production for every day these plants remain down.

We are not that surprised that the company guided down for the first quarter given their previously announced weak production schedules. However, we are surprised by the magnitude of the first-quarter and 2005 revision, which suggests the further risk to production schedules in future periods.

timing of this pending divestiture cannot be overlooked.

While none of these issues are enough to change our thesis on GM, they do raise our concerns on the company's internal accounting controls.

While fundamentals are admittedly weak, given the stock's weak recent performance, we are reluctant to get incrementally bearish, particularly ahead of a potential restructuring announcement.

We are expecting PSA to beat their forecasts and to reaffirm fairly upbeat guidance for 2003. Their key markets of Britain and France are holding up well and their market share is reasonably healthy.

While tire pricing remains strong, high raw material prices and potentially weak high-margin markets (North American and European replacement truck tire markets) could provide offsets.

We expect GM to take notable share from Ford in the full-size pickup segment in 2006 and, particularly, in 2007.

We see a $US2 billion cash injection as meaningful, even in light of GM's robust corporate liquidity. This sale was largely unanticipated by the market.

We see a $2 billion cash injection as meaningful, even in light of GM's robust corporate liquidity. This sale was largely unanticipated by the market.

Beyond guidance for favorable structural cost performance in 2006, and details on material cost savings goals, no specific guidance on the extent or cadence of structural cost savings was given. In addition, the company offered only limited details on the timing of plant actions.

Assuming $8,000 variable contribution margin/unit, we estimate this translates into an earnings-per-share hit of 1 cent for every day of lost production. However, we also note that much of this lost production could be made up via overtime production once the plants are up and running again.

Although we are becoming more upbeat on the pace of restructuring, we worry about Ford North American production outlook, particularly in 2007.

Although such a move has been rumored for some time, we believe the speed of Dana's demise will nonetheless further dampen sentiment toward the sector.

Although such a move has been rumored for some time, the speed of Dana?s demise will further dampen sentiment toward the auto industry.

It should not be difficult to agree on the bargaining points.

That said, we continue to favour GM over Ford due to the former's more favourable 2006 product cycle and its more aggressive restructuring approach.

That said, we continue to favor GM over Ford due to the former's more favorable 2006 product cycle and its more aggressive restructuring approach.

By forcing a health-care inflation cap for salaried workers, GM is bringing forth the issue of similar caps for hourly workers, which our talks with (GM) management suggest is a top priority.

However, near-term worries on slowing diesel penetration and Western European production could weigh on the stock.

The company's specificity on 2006 cost targets ... is likely to reassure the market, and heightens our belief that the company will see a meaningful earnings rebound in 2006.

The company's announcement that it will not provide earnings guidance going forward, however, came as more of a surprise, making it notably more difficult to isolate and gauge the impact of restructuring.

The market is likely to be reassured that management is now putting firmer parameters around 2006 performance.

The long-term outlook, particularly given end-market strength in the controls business, remains robust.