The Swedes are sinking fast. Swedish Wire reports that Ford’s Volvo brand continues to be the elephant fart in the room, sucking wind to the tune of $231 million for the second financial quarter. “The decline primarily reflected lower volumes, partly offset by continued progress on cost reductions and favorable exchange,” the American carmaker pronounced. You mean it could have been worse? Meanwhile, SAAB,’s guzzling a gas tanker’s worth of not good. The former GM division, now owned by Old GM (which is like having an arsonist for a security guard), “made an operation loss last year of 4,148 million kronor ([€]377 million, $553 million). That is an increase of 90 percent from a loss of 2.194 million kronor a year ago . . . . During 2008 the company sold 93,220 cars, according to the TT news wire. That’s 25 percent fewer than 2007 when the company sold 125,085 cars.” And even then Saab didn’t make a profit. Despite deals to off-load the Swedish automakers on suspecting “investors,” their days of mass market sales are färdig. Unlike GM, they probably know it.
Good morning, Chairwoman Warren and distinguished members of the Oversight Panel.
Thank you for the opportunity to testify about how GM is reinventing our company and how a new GM will repay our nation’s investment.
Emerging from bankruptcy, we are a new company with less debt, a stronger balance sheet, with the right-sized manufacturing, product and dealer network to match today’s market realities. GM can now direct its full energy and resources to where it should be: on customers, cars and a culture to succeed.
We are grateful for our nation’s support. Without it, we would not have this second chance. Equally important, are the many who have been called to sacrifice in order to create a new GM.
I can’t say that I’ve seen everything. But sometimes I feel as if I have. For example, the morning after we publish Bob Elton’s piece on Chrysler’s wanton destruction of its historical archives, the Detroit Free Pressruns a piece on the future—or lack thereof—for feral cats hanging out on the grounds of Chrysler’s Sterling Heights factory. As a former English resident alien, I know what’s it’s like to live in a country where animal welfare gets more play than the challenges faced by humans. Still, this is one for the record books: “‘We try to help them out a little,’ said Claudia Valentine, 55, a veteran skilled trades worker on the night shift at the plant. She said workers feed the cats nightly and do such things as setting insulated crates outside in winter. But the cats have multiplied and are causing safety problems, a few being run over by workers or caught in the conveyor system.” We also learn, “Feral females spend most of their lives pregnant or nursing. In seven years, one female cat and her offspring can yield 420,000 cats.” In the same sense, I suppose, that Chrysler can become profitable. Just sayin’.
Regular readers know that TTAC leans a little towards the “Inside Baseball” side of the auto industry. In this case, if we leaned any further, we’d fall down. But hey, many of us have come a long way together, shaking our heads in wonder as The General’s aide de camps stayed-up all night listening to Mohammed’s radio. Or something like that. Anyway, here’s a GM-related picture from Clubsnap.com’s Singapore snappers, taken during last year’s BBK International Motor Show. Make the jump for your New GM New Scorecard.
Remember the “legendary” story about a freshly-minted GM Car Czar peeking under a tarp (the non-financial sort) and saying, “This isn’t the new Corvette!” The Kool-Aid drinkers were awestruck; Bob Lutz was serving notice that GM design wasn’t good enough! In fact, as we pointed out, it wasn’t the new Corvette; Maximum Bob was simply showing his colleagues that he knew the difference between a Corvette and a non-Corvette. Well, here we go again, only this time MB is GM’s Marketing Czar and it’s a reviled Buick ad. Set-up: MB in the FastLane: “That Buick commercial tested very well, which is not the same as saying that it’s an effective ad. I think you will very quickly see a drastic change in the tone and content of our advertising. And if you don’t, it will mean that i have failed.” AdAge: “GM’s new marketing top gun, Bob Lutz, met with the automaker’s brand teams on July 14, spent 10 to 20 minutes critiquing the work for each brand and, in the words of someone in the know, ‘crapped all over the advertising.’ Then he jetted off to the Caribbean island of Montserrat on holiday, leaving some scared individuals in his wake.” Taxpayers/shareholders included.
A Sanford homicide suspect was arrested around midnight on Saturday when he ran a red light in Orlando.
Sanford police had been searching for Sergio Henderson after Robert J. Johnson, 37, was found dead near West 10th Street and Olive Avenue on Monday. Police believe there was a fight outside when the shooting occurred.
Henderson, 22, had just been released from prison on June 3. Since May of 2006 he had been serving time on offenses including battery on a law enforcement officer, burglary and vehicle theft.
The Wall Street Journal reports that the new federal “pay czar” Kenneth Feinberg is about to cap the execs working for GM, GMAC, Chrysler and Chrysler Financial. Well, restructure or “renegotiate” their salaries, bonuses and benefits. As Dan Rather might say, what’s the frequency, Kenneth? Less obliquely, the four auto industry recipients, all of whom owe their existence to billion dollar blessings from the Troubled Asset Relief Program (TARP), must send Ken new exec pay, perks and bennies guidelines by August 13. At which time the man originally tipped to be President Obama’s Car Czar (mooted by a 25-member task force) will decide whether or not he likes their proposals. If he doesn’t . . .
When asked at an early meeting to discuss G.M.’s culture, he gave what some members of the task force described as a long, meandering answer, concluding: “I’ve been here 25 years. This is the only culture I know.” However, Mr. Henderson quickly added that he was determined to change it.
Earlier today, I spoke with Jim Dollinger (a.k.a. Buickman). The TTAC commentator was deeply rattled. Jimbo reported that GM had put the squeeze on the dealer for which he sells. “They’re clever,” he said. “But they made it clear to the dealer that their franchise was in danger if I didn’t shut down GeneralWatch.com.” I told Dollinger to let it go. In fact, I called him back and recommended that he let GM go. Give up his quixotic quest to save GM and find some more lucrative, less splenetic line of work, or at least another carmaker to represent. Nope. Ten minutes ago, I received one of his e-mail alerts. “Today General Motors threatened my dealer. Now I have to decide between keeping my job and running GeneralWatch.com.” I e-mailed him back, “Are you sure you want to go public with this?” Suffice it to say, Dollinger’s terse reply signified his assent. So there you have it: same old GM. In other words, knowing both Buickman and GM, I believe him. Your tax money hard at work.
When columnist Daniel Howes at the Detroit News gets pissed off enough at GM to write anything other than “we shall see what we shall see,” you know the former bankrupt is doing something very, very wrong. The object of Danny’s ire: the lack of fresh faces at The New GM. “To read the announcement of GM’s new nine-person executive committee, the promotions and the retirements, as I did minutes after it was made public, is to hear the faint strains of Talking Heads singing ‘same as it ever was, same as it ever was’ and to hear more wailing about the chronically clueless GM.” Mind you, Howes isn’t calling GM chronically clueless (that’s our job). He’s angry that “the feds’ pay-and-bonus restrictions essentially make it impossible for CEO Fritz Henderson to woo outside talent for inside jobs.” Woo-hoo! Howes is on the money; out in the real world, $500K doesn’t buy you a reasonable Human Resources manager. But hey, did someone forget the GM stands for Government Motors?
Three days before launch, the Department of Transportation has finally released the rules [PDF] for car dealers participating in the federal Cash for Clunkers program. Dealers must disable the trade-in’s engine [official powerplant-killing technique after the jump] and then send the clunker to an approved salvage auction or an authorized disposal company, which will kill, crush and destroy (not to mention recycle) the remaining bits. The doc also contains a word to the wise: “The CARS Act specifies that while many parts of the trade-in vehicle are permitted to be removed and sold, in the end the residual vehicle, including the engine block, must be crushed or shredded. Therefore, the trade-in value of the vehicle is not likely to exceed its scrap value. Purchasers should not expect to receive the same trade-in value as they might if the vehicle were to remain on the road.” I wonder how many consumers will make that calculation, or how many dealers will help them in that regard.
Fifty billion dollars. That’s how much money the United States taxpayer has plowed into General Motors. Back when this terrifying teat-sucking started, Michigan Representative Debbie Stabenow told the country that the bridge loans (as they were called at the time) were about “jobs, jobs, jobs.” To say the rhetoric justifying/sustaining GM’s giga-suckle has shifted would be like saying Pontiac’s prospects have dimmed. Now it’s all about “returning the taxpayer’s investment.” If that means withdrawing a contract from Stillwater Mining (a Montana outfit that provides New GM with platinum and palladium for catalytic converters) and endangering 1300 American jobs, to paraphrase the GM spokesman on this NPR report, tough shit. Nice thought, but does GM risk a serious consumer/taxpayer backlash as the federally-supported automaker turns its back on the US economy? Apparently not. (Witness the lack of interest in our story about federal stimulus money going to Mexican car factories.) Not yet, anyway. Meanwhile, what’s your take? Does America’s nationalized automaker have any obligation to support US jobs?
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