Does GM Hedge?

Monday, February 13, 2006 | 09:15 AM

Why hasn't GM ever hedged against Oil/Gasoline price increases?

Or do they, and we just never heard about it?

That question came up several years ago in a late night conversation, but I never followed up on it.  Airlines do it, many Oil companies  do it -- so why not GM or Ford? Both companies have become so reliant on big SUVs, pickup trucks, and other energy inefficient vehicles, that they are so obviously subject to the vagaries of the Crude market.

I mentioned this vulnerability to oil's pricing on Power Lunch about a year ago (Sell GM att $45 turned out to be a pretty good call), and had an interesting discussion with another guest in the green room about it.

But that's now history, so lets make this propspective:  What other companies' profits are vitally dependent on a commodity that could see big price increases? Can they hedge against a big move? Should they?

Consider: Intel & Silicon, Utilities and Natural Gas/Coal, Boeing and Aluminum, Coke and Sugar.

Use the comments section to suggest firms that should consider a hedge -- but don't.

Monday, February 13, 2006 | 09:15 AM | Permalink | Comments (26) | TrackBack (0)
de.li.cious add to de.li.cious | digg digg this! | technorati add to technorati | email email this post

bn-image

TrackBack

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8341c52a953ef00d83473ba7553ef

Listed below are links to weblogs that reference Does GM Hedge?:

Comments

How would this help? For your other examples, the commodity serves as a manufacturing input to their actual salable product or service. For GM, the cost of oil is mainly an issue for their _customers_.

The equivalent analogy would be Intel hedging against the electricity it cost for their customers to run the PCs?

I can't see how GM could make something like this work, unless they did one of those "free gas for a year" deals fleet-wide.

Posted by: M1EK | Feb 13, 2006 9:22:28 AM

The comments to this entry are closed.



Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      

Archives

Complete Archives List

Blogroll

Blogroll

Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:


Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites

FeedBurner


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo

Disclaimer

Disclaimer

Odds & Ends

Site by Moxie Design Studios™

FeedBurner