Detroit’s car firms try to match Silicon Valley

IT IS fashionable to say that the city of Detroit is on the up. Amid the derelict buildings there are signs of revival. But for a truer augury of the city’s possible future, consider the rock-bottom stockmarket valuations of Ford and General Motors, Motor City’s two big domestic car firms. If you put the members of the S&P 500 index in order of their price-earnings ratios, Ford and GM are at the bottom, among the walking dead.

For their investors, creditors and 426,000 staff, about 18% of whom are in Detroit, it is a terrifying signal. A low price-earnings ratio is the stockmarket’s way of telling you that business as you know it is over. GM and Ford together made $18bn of underlying profit last year but have a market value of $98bn.

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Mike Rawson

Mike Rawson has recently re-awoken a long-standing interest in robots and our automated future. He lives in London with a single android - a temperamental vacuum cleaner - but is looking forward to getting more cyborgs soon.

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Detroit’s car firms try to match Silicon Valley

by Mike Rawson time to read: 1 min
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