How big of a stake do oil companies hold in automakers?

Question

I am just curious because all the cars that get great mileage are ugly. Not to mention US autmakers are dragging their heels when it comes to producing hybrids, they are still making muscle cars!?!? Gas will be $5 a gallon in 2 years. It does not make any sense to me!

Answer 1

Not a very large one, if even at all.

All companies who's stock is publicly traded, must list any stock holder who controls more than 5% of the companies stock on thier annual SEC filings.

So it would be easy enough to find out.

Just go to Ford, Crysler or GM's webpage and go to the investor part. They make their SEC filings public.

Answer 2

This is how the oil companies control their supply and demand. US based companies have not built an oil refinery in over 30 years. They shut down refineries right before summer for maintenance (note this is scheduled which is no shock for the company). I live on the Gulf Coast and hear about all the local changes. During the hurricanes the oil companies "capped" the oil rigs in the Gulf. After the storm there was minimum damage reported. To this day, they still have them capped -- meaning no oil is being extracted.

The oil companies and motor companies have a lot of their executives with stock in both groups. Hybrids and all are good, but the oil companies are pulling record profits none the less, due to the high cost of a some of the hybrids people don't wish to spend the extra money.

Now, currently in the news Congress is trying to make an anti-gouging bill. These laws already exist but are not enforced. Every state holds an anti-gouging law. The problem with oil companies and the "gouge" mark that is being debated is how to determine gouging. The oil companies are doing everything legal. However, they control the supply (refineries, derricks, shipping, etc) and the demand (the capping of oil platforms, the shortage of refineries, etc).

[1st source] This is about the Exxon Mobil (the highest profitted oil company in the US presently) and the profits they are turning. The key word is "profit" -- Whenever oil company speakers come onto the news they speak about how that money will go into Research & Development and other uses. However, that already is included in their budget. A profit is what is left after all the expenses are paid.

Now the question is... what does that money go to? Recently reported on a few of the news sites and major news papers who have been following the Congressional hearings with the oil companies found that most of the money is just going back into the company to increase stock prices. The 2nd url shows their current stock.. not much of a surprise with the high cost of fuel that their stocks are soaring.

People also are the price of gas is nothing compared to Europe. That is due to the taxes that the other countries add to the fuel. The 3rd URL shows the fuel prices in 2005 (didn't locate a more updated chart). However, ~ 75% of Europe's gas price is taxes that are used for the country's finances. So after cutting ~50% their price leaving 25% (we have ~12% tax on our fuel) [4th url 3rd paragraph explains the taxes a little bit]

We are caught by the balls more or less on this, as long as supply and demand are controlled by the oil companies -- We will be hurting at the pump.

Also note OPEC is involved in all this, but is not as heavily influenced as you think. The OPEC Website updates the price of oil by the barrel per day, a lot of times you will see it drop, but the pump prices will raise. There is a lot of issues with the way our oil companies are running the bussiness, but they have a market where you "need" to buy their product.

It's very sad and I hope this sheds some light on our gas price pains.

Answer 3

The automakers make cars they think people will buy. They cannot force you to buy a little car or hybrid. Until recently, fuel has been so relatively cheap people wanted big cars and muscle cars. Fuel has been high in Europe and Japan for a long time so they produce a lot more smaller fuel effecient cars.

I don't believe the type car they produce has anything to do with the oil companies. If they could make a car that gets 100 MPG and people would buy it, they would make it. That goes for automakers all over the world.

Answer 4

I saw something on this in the Wall Street Journal several months ago. It was almost zero. Oil producers are apparently not interested interested in investing in manufacturing, outside of the refining of crude oil and its by-products.

About 20 years ago When the enviormental laws were becoming very strict, many American oil refineries closed because it was cheaper to buy refined oil overseas than risk the penalties and other added costs in refining in the USA. Refineries have a very low labor cost, but a very high cost of construction and maintenance. For many years, refining was a business with a very low profit for the cost of investment. People had better places to invest their money. When Katrina and the other storms hit the Gulf, refineries had to be shut down. Because of the damage they could not be restarted immediately. Meanwhile other American refineries that were due for a shut down for routine maintenance stayed open to carry the temporary shortage of refining capacity. Now these other refineries have to shut down together with others for routine maintenance.

You've heard of supply and demand. Because the world is very prosperous--- the demand for oil is up. Since there is a shortage of refining capacity, the supply is down. Both the increased demand and reduced supply, forces the prices to move higher.

Answer 5

not sure... but oil seems to have litlle effect on Toyota... they are way ahead of the curve on hybrids...and if GM and Ford don't watch out, they won't be around much longer...

no matter who is running them...