GM’s board accepted Fritz Henderson’s resignation today, and its Chairman Ed Whitacre will serve as CEO until a replacement is found. A search for a new President/CEO will begin immediately. Whitacre took no questions, saying the day had been “hectic.” A spokesman said the resignation was a decision reached mutually by Fritz and the board, based on the company’s “current position.” The spokesman refused to answer further questions about the leadership change, prompting one journalist to ask why GM hadn’t simply issued a release, rather than calling a conference. “This is stupid,” he said. The spokesman revealed that the government “was notified after the board’s decision,” and referred questions of hiring practice to the federal paymaster, Kenneth Feinberg. Otherwise, there are no real answers coming out of today’s statement and brief question-and-evasion period. Whitacre’s statement is after the jump. (Read More…)
GM’s sales fell by only two percent in November, showing that, unlike Chrysler, its sales are fairly well tied to the overall health of the market. All four of GM’s “core brands” posted month-on-month increases, with Buick up 14.8 percent, Cadillac up 10.3 percent, Chevrolet up 4.5 percent and GMC up 5.4 percent. Non-core brands including Hummer, Pontiac, Saab and Saturn combined for a 47.9 percent decline, to 11,755 units. Cars fell by 1.3 percent, while Trucks were down by 2.8 percent, leaving GM with total deliveries of 151,427 units.
The Hyundai sales juggernaut rolled on in November, posting the highest month-on-month gain of any brand with a 46 percent increase [release here]. Its sister brand Kia wasn’t far behind with a 21 percent sales gain over November 2008 [release here]. Year-to-date, the two brands have combined for 680,282 units, a mere 16,417 fewer than Nissan’s 2009 numbers.
Initial indications of November’s sales numbers show an industry exhibiting some signs of leveling off after a solid year of steep declines. And when the rest of the industry is merely flat, Chrysler has to satisfy itself with slightly-less-dramatic-than-usual declines. Though Chrysler’s sales [full PDF release here] were “only” down 25 percent compared to November 2008, things were hardly going well a year ago. As a result, Chrysler sold an embarrassing 63,560 units total, ending the month with a 64-day supply of vehicles despite offering some of the industry’s most generous incentives. Forget the percentages, Chrysler’s niche-like volume is the killer here… and it’s relentlessly slipping away as the Pentastarred zombie crashes into oblivion. (Read More…)
Former Tesla PR honcho Daryl Siry lays into the Department of Energy’s Advanced Technology Vehicle Manufacturing Loan program (ATVML) at Wired’s Autopia blog, taking the $25b program to task for “stifling innovation.” At its core, his argument is a simple one:
Startup companies that enjoy DOE support, most notably Tesla Motors and Fisker Automotive, have an extraordinary advantage over potential competitors since they have secured access to capital on very cheap terms. The magnitude of this advantage puts the DOE in the role of kingmaker with the power to vault a small startup with no product on the market -– as is the case with Fisker — into a potential global player on the back of government financial support.
As a result, the vibrant and competitive market for ideas chasing venture capital that has been the engine of innovation for decades in the United States is being subordinated to the judgments and political inclinations of a government bureaucracy that has never before wielded such market power.
All of which sounds very TTAC… in fact, our lengthy Bailout Watch series began with a similar analysis of the ATVML program (albeit with a Detroit-focused twist). Unfortunately, Siry’s intentions in this case are questionable… as are his conclusions.
Automotive News Europe [sub] reports that Fiat CEO Sergio Marchionne has ordered a strategic review of the Alfa Romeo brand, citing declining sales and mounting losses. Alfa’s sales have fallen from 203,000 units in 2000 to 103,000 last year, and the brand has lost between €200m and €400m in each of the last ten years. According to Marchionne, Fiat’s sporty brand has undergone too many reinventions. “You cannot be a newborn Christian every four years,” he explains. “It’s the same religion, eventually you need to own a religion and carry it to conclusion.” The recent delay of the 147 replacement due to name-related issues was merely the latest trouble for the Alfa brand, which has struggled with aging products and underinvestment. According to Marchionne, Alfa faces two possible futures: retirement or rebirth… on Chrysler platforms?
Well, the good news is that the EPA has thus far refused to allow gasoline blends of more than ten percent ethanol. The bad news is that the Agency has yet to take a firm stand against the idea of eventually allowing E15 into the nation’s gas pumps. In fact, as the EPA’s response to the ethanol lobbying group Growth Energy’s request to allow E15 [full document in PDF form here] opens:
It is vitally important that the country increase the use of renewable fuels. To meet that goal EPA is working to implement the long-term renewable fuels mandate of 36 billion gallons by 2022. To achieve the renewable fuel requirements in future years, it is clear that ethanol will need to be blended into gasoline at levels greater than the current limit of 10 percent.
I won’t lie, I was expecting something a little more… dramatic from the new Audi A8. On the other hand, if it weren’t a fundamentally understated car, it wouldn’t be an A8.
Like a highschooler puffing on its first joint, GM’s embattled corporate culture is sure it can feel something changing, and it’s eager to share its fresh perspective on itself. As with the allegorical proto-stoner however, when the need to appear altered is more important than an honest journey of self-discovery, strange hilarity ensues. To wit, this tidbit from the WSJ’s Bankruptcy Beat Blog:
“As we work to create the New GM with a new culture that includes personal accountability, our existing dress code seems outdated,” Mary Barra, GM’s vice president of global human resources, wrote in an employee memo earlier this month, according to the newspaper. “Going forward, our dress code policy is ‘Dress appropriately.’”
After giving its balance sheet a makeover in bankruptcy, it seems the company is finally ready for a cultural revamp too. It’s renaming its conference rooms – anyone up for a meeting in the “Groovy Room” or the “Zen Room?” – in an effort to promote risk-taking.
All of which leads to at least one troubling question: what is “appropriate” attire for a meeting held in the “Groovy Room?” I mean, how much “risk taking” are we talking about promoting? Also, as this video from a year ago proves, casual dress at GM was Rick Wagoner’s idea… sort of.
“The Krom Rogue will look a little more masculine,” [Patrick Steiner, director of sales and marketing for Nissan North America’s Specialty Vehicles and Accessories unit] said while standing alongside a prototype black Krom model at Nissan’s North American headquarters here. “We think it will attract a higher percentage of male buyers.”
Manly men can expect to pay $2,000-$4,000 over base for the Krom Edition Rogue’s masculinity defining “entirely new front end with a mesh grille, fog lights, rear spoiler, tinted glass, center exhaust pipes and 17-inch alloy wheels.” [Autoweek, via MSN]
As I noted yesterday, the intersection of automobiles and politics is a difficult area of analysis. In the United States, where motorists don’t face the daily challenges they do in Russia, discussions of politics in an automotive forum too often gets overwhelmed by larger political battles. Before you know it, a conversation about the future of electric cars can turn into a debate on military and foreign policy, and an auto-industry bailout can be justified by virtue of its small size relative to the bank bailout. In short, everything happens within a context, and politics is all about context. TTAC has always waded into political issues based on their relevance to cars, motorists, consumers and the industry, and we’ve held some fascinating explorations of political topics ranging from red-light and speed cameras and foreign oil dependence to anthropogenic climate change, bailouts and pay-per-mile tax schemes. In the interest of providing the right balance of big-picture and street-level issues in our coverage, we’re curious: what car-related political issues fascinate, concern or perplex you most?
The EPA is set to rule as soon as tomorrow on the so-called “blend cap,” which forbids the sale of gasoline with more than ten percent ethanol. The petition to raise the blend cap came from a relatively new pro-ethanol lobbying group, Growth Energy, which requested the cap be moved to fifteen percent ethanol. Growth Energy’s request cites foreign oil dependence, “green-collar jobs” and the future of cellulosic ethanol as reasons to bump the blend cap, but as the New York Times reports, the real problem is that the ten percent limit is bumping up against a congressional mandate to blend 15b gallons of biofuels with gasoline by 2012. What the Times fails to mention is the financial incentive for raising the blend cap: the 51 cent-per-gallon of ethanol blended tax credit. In 2007, when gas consumption was at an all-time high and ethanol blending mandates required a mere 4.7b gallons (with 7b actually blended), that credit cost taxpayers nearly $3b. In 2012, when the mandate hits 15b gallons, the taxpayer tab will be closer to $7.65b. (Read More…)
Are you a lonely American, stuck in Merry Old England for the holidays and looking for a slice of Wal-Mart shopping lot nostalgia amid the plum pudding and “Fathers Christmas”? Look no further than the UK Cruisers’ Charity Christmas Party. Who knew there were enough “owners and admirers of PT Cruisers” in Old Blighty to start a club?
Compared to the tens of billions of dollars in lost taxpayer investments in GM and Chrysler, the lawyer bills for the twin bankruptcies are relatively inexpensive. The Freep reports that legal and consulting fees have already exceeded $120m, with another $3m pending for September and October, and more to come. According to court records, Chrysler’s chief financial advisors during its bankruptcy, Capstone Advisory Group, has received $17m in taxpayer money, with some $10m going directly to the firm’s Executive Director Robert Manzo. Chrysler’s lead counsel, Day Jones, received $40m through last August, and estimates place the firm’s eventual tab to total somewhere around $115m. GM’s bankruptcy advisors AlixPartners and Evercore Partners received $26m and $13m respectively, while its head lawyers, Weil, Gotshal & Manges received nearly $72m. And with the liquidations of Old GM and Chrysler far from over, the legal bills will continue to mount, likely past 2010.
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