Most European auto chief executives would rather go to the dentist than make a presentation to a group of stock analysts. But it is time for European automakers and suppliers to do more for their shareholders.
The depressed share prices of Europe's auto companies are bad for the companies and bad for the industry.
Automotive companies in Europe simply don't focus on value creation. A top executive at one of Europe's biggest automakers confided recently that his management board only spends 30 minutes each month talking about the share price.
That is a European tradition that must end. While the Ford family fortune has vastly increased as Ford Motor Co.'s US share price has risen in recent years, those of the Quandts, Agnellis and Peugeots have not.
Internet entrepreneur Jeff Bezos - the man behind amazon.com, an on-line bookstore that has yet to make a profit - recently slipped past BMW's Quandt family on the Forbes magazine list of the world's wealthiest people. That largely reflects the weird world of Internet stocks. But it also says that the market does not value one of the world's greatest automotive brands nearly enough.
That's not fair to the Quandts. But more importantly it is not fair to smaller shareholders who have put their money in BMW and expect a return.
A revolution is needed in Europe. Executives have to tell their story. And they have to do the other things - the basics, like implement stock options packages for senior managers and buy back shares when necessary.
There are signs of change. Share options for senior executives are slowly being introduced in Europe. DaimlerChrysler is being influenced by Chrysler's shareholder mentality, though D/C is disturbingly less transparent than the old Chrysler.
After going private, Renault became more attractive to investors. A refocused Renault made tough, but necessary decisions, like closing the Vilvoorde, Belgium, plant. Though smaller than Nissan, Renault had the wherewithal to acquire management control of the Japanese company.
There are also signs of light at Fiat, where the share price is languishing. Jack Welch, the chairman of General Electric and Fiat SpA Chairman Paolo Fresco's former boss, has been named to the board of directors.
Welch is the godfather of value creation. His message will be clear for Fiat and for the rest of the European auto industry. Taking care of shareholders is worth the trouble.
