France Flexes Against General Electric's Bid For Alstom and General Motors Recall Tally Hits 18

Two industrial juggernauts are making headlines in the market today. Here's what you need to know.

May 15, 2014 at 3:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) was trading 173 points lower, or 1%, by midafternoon even after the latest Labor Department reported that initial jobless claims fell sharply by 24,000 to a seasonally adjusted rate of 297,000 in the week ended May 10. An explanation for the steeper than expected drop was the late Easter holiday, which makes it more difficult to seasonally adjust the numbers. Even with the holiday partially to blame for volatile numbers, claims have been hovering near post-recession lows throughout 2014, and that's a good sign.

With that in mind, here are two companies making headlines today.

Inside the Dow, General Electric's (NYSE:GE) $17 billion bid for Alstom's energy business is on rocky ground after the French government on Wednesday gave itself the power to block foreign takeovers in industries it believes to be strategic for national health and security. That includes areas such as transportation, equipment, plants, and, of course, energy.

While Alstom has vocally backed General Electric's bid for its energy business, France would prefer that the German company Siemens come back a better offer. Paris would prefer more of an alliance between companies such as Alstom and Siemens, rather than General Electric potentially "absorbing" and perhaps dismantling the business.

"The French government is going to great lengths to intervene," said Bernstein analyst Steven Winoker, according to Bloomberg. "This particular announcement is not a positive one from GE's perspective. At the end of the day, I think you still will have a deal, I just don't know that it will be with GE."

General Electric has since voiced its opinion that the industrial project presented to Alstom is good for the company, its employees, and France. In a statement, GE also said it intends to preserve and even create jobs in France. General Electric investors would be wise to watch this situation -- this is a very valuable deal that would add to earnings immediately, as well as further GE's progress in returning to its industrial and energy business roots.


General Motors CEO Mary Barra in front of a Senate panel earlier in 2014. Source: General Motors.

Outside the Dow, General Motors (NYSE:GM) is making headlines for yet another round of recalls. The automaker today announced an additional five recalls covering 2.7 million vehicles with problems ranging from windshield wipers, to tail lamps, to brakes. That brings General Motors' total recall this year to 18,  which covers more than 11 million vehicles.

If you think that number sounds absurdly high, you'd be right. Consider that so far in 2014 General Motors has recalled roughly six times the number of vehicles it has in recent full years. From 2009 to 2013, GM averaged 19 recalls covering 1.8 million vehicles per year, according to Automotive News.

To take it a step further, General Motors has single-handedly put the entire automotive industry on pace for the worst year of recalls ever. The previous record was set in 2004 at 30.8 million vehicles recalled.

General Motors investors, who no doubt hoped to put last quarter's $1.3 billion charge in the past and focus on a more profitable year ahead, will have to digest an additional $200 million charge in the second quarter for costs associated with today's recall announcement.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

Daniel Miller owns shares of General Motors. The Motley Fool recommends General Motors. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information