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Posts By: Robert Farago
What a difference a weekend makes. On Friday, I spoke with House Speaker Nancy Pelosi’s PR person. She promised to help us identify the models involved in Uncle Sam’s purchase of 17,205 Chrysler, Ford and GM vehicles (as part of the economic stimulus package). Talk about backing away . . . Not only did Pelosi press secretary Drew Hammill deny making any such promise, her e-mail asked us to remove our story. No chance. I stand by my report. Oh, and “we do not have the information on what types of vehicles GSA has ordered. You will have to get that information from them.” As you know (and I told Hammill), the GSA stonewalled that request. Meanwhile, here’s a question: does this mean that Speaker Pelosi doesn’t care what percentage of these vehicles will be US made? Or how much more fuel efficient they will be than the vehicles they replace? If, as stated, this purchase was designed to create jobs and help the environment, how can she support it without knowing those crucial details? How, indeed.
After my Wall Street Journal Op-Ed gave Massachusetts Congressman Barney Frank serious shit for personally intervening with GM’s turnaround plans—to save a parts distribution warehouse in his district—the WSJ has gone on the attack. OK, sure, they would have done it anyway. It probably had nothing to do with me whatsoever. Anyway, personal ego issues aside, the WSJ‘s forced Barney to explain his influence-peddling. Apparently, it was OK for the TARP-meister to ring-up GM CEO Fritz Henderson and ask (demand?) for the Norton facility to remain open because . . . it’s not a factory or a dealership. The headline above offers the politician’s distinction. Which begs a number of questions: how is a parts distribution center environmentally friendly? Does he seriously expect us to believe that he acted to save the planet? And if he can mess with GM, what’s to stop his colleagues?
OK, so it’s going to be one of those days is it? No problem, we’ve got a Whiskey Tango Foxtrot category and we’re not afraid to use it. And here we go (again) . . . Fox News reports that “The Pima County Sheriff’s Department has a new campaign targeting drunken driving. Operation Would U Like Fries, or Operation WULF, will put undercover deputies inside 24-hour fast-food restaurants to spot impaired drivers placing their orders.” No, really. “Sgt. Doug Hanna, a DUI unit supervisor, says if deputies notice someone with classic symptoms of impairment — slurred speech, red or watery eyes or beer breath — they will have a uniformed deputy stationed outside pull the driver over.” A $128,000 grant from the Governor’s Office of Highway Safety will pay for the munchie patrol. Expect AZ drive-thru traffic to quadruple. At least. Dude. [thanks to Dave for the link]
Bloomberg reports that Honda has dialed-back its US sales predictions for the Insight hybrid by a third. “First-year Sales of Honda’s gasoline-electric Insight, which debuted at U.S. dealerships in late March, may be between 50,000 and 60,000 units, John Mendel, the company’s U.S. executive vice president, said in a June 11 interview at Honda’s U.S. headquarters in Torrance. ‘I don’t think we’ll get to 90,000.'” (Bloomberg sat on this story for four days?) Apparently, Mendel forgot to explain the discrepancy between expectation and reality—so Hizzoner’s family firm did it for him . . .
Why would GM’s VP of sales and marketing for North America expect his company’s [remaining] dealers to contact their elected representatives to support Government Motors’ dealer cull? Times two when you consider that GM is planning on making another round of dealer cuts in the future. “Hey. It’s Mark LaNeve. Thanks for lobbying for our downsizing. Oh, by the way, you’re next.” No, I’m not making this up. Here’s the e-mail, complete with fill-in-the-blanks phone script. [Thanks to you-know-who-you-are.]
According to Automotive News [sub], GM plans to shed an additional 520 dealers through “attrition” by the end of 2010. AN does the math: 1380 (by corporate fiat, so to speak) + 520 (attrition) + 500 (HUMMER, Saab and Saturn’s disappeared) = 2400 dead franchises trading. Given that many stores have overlapping franchises, I’m not sure how many dealers GM will have at the end of the federally-sponsored day. In any case, GM is on the ropes on the coasts and tanking in Texas. The bankrupt automaker needs a wide spread of smaller dealers to cover their last redoubt (the heartland). Still, one wonders what the ideal frnachise network size should be, and this process of attrition. More specifically, what will GM’s market share be and what’s GMAC’s role in this “inadvertent” downsizing? Is the lender—sorry, “bank”—continuing to make life difficult for GM stores? In other words, are Government Motors’ dealers fading as GM’s market share continues to tumble or will they be pushed? Or both? Oh, and AN reports that GM dealers are having something of a morale problem. Ya think?
The New York Times reports that Buick is using your hard-earned taxes to try to get you to drive beautiful. The new campaign (also at buick.com) asks you to rethink the damaged brand because “[e]verything you thought about Buick just went boom.” Question: how long before Buick goes “poof”? Anyway, what do you make of the new tagline “Take a look at me now”? According Leo Burnett’s general director for advertising and promotion, Buick’s motto is completely unrelated to the Phil Collins song. Yeah, sure. I believe that. But speaking of guilt by association, did anyone at Buick or Leo Burnett actually listen to the song? Sample: “Ooh take a look at me now, well there’s just an empty space. And you coming back to me is against the odds and that’s what I’ve got to face.” Roger that. Just for fun, full lyrics after the jump.
OK, I missed this one: an Automotive News [sub] Op-Ed by Mike Jackson, GM’s former marketing and advertising Veep [thanks for the heads-up, Frank]. In his piece, Jackson rips Government Motors a new one. Well, not exactly. ‘Cause excoriating GM for past mistakes would require Jackson to admit his own role in the debacle. Jackson can’t do that. That would be too much like taking the same sort of personal accountability for which the ex-exec now calls. Less enigmatically, Jackson’s rant tells GM what it should do, you know, now that he’s got the hell out of town. First up: culture. “Streamline the organization structure. Get rid of the cancerous GM lifers. The new GM must be nimble and evoke emotion and passion. Have the leaders of the divisional brand teams report directly to the office of the CEO, rather than through four layers as they have done.” More? Of course there’s more.
I had an interesting conversation with PCH101 about New GM’s governance. Like many observers, the TTAC commentator is not ready to dismiss The Presidential Task Force on Automobiles (PTFOA) out of hand. I, of course, am. Have done. Will do. But before I do (again), consider PCH101‘s logic. He credits the PTFOA for clearing out the deadwood: finally ridding the failed automaker of the troublesome man who guided the company on its final descent into bankruptcy. He also believes that the 25-member PTFOA is a better bet for GM than the original plan for federal oversight: a car czar. “I remember a study in B-School that concluded a committee of managers without any direct experience in an industry made more effective decisions than a single autocratic insider.” With all due respect, crap. And completely irrelevant.
The Winnipeg, Canada, Police Service has been caught a second time underreporting the number of accidents at red light camera intersections in order to make the lucrative program appear effective. The Winnipeg City Auditor was first to note the police tactic in a 2006 audit report. This week, the Winnipeg Sun found the police are still using the same technique to protect a program which generated $14,086,804 CAD in revenue for 2008.
From Automotive News [sub]:
[GM CEO Fritz] Henderson said there was no resolution yet on the [$20 million] pension for former CEO Rick Wagoner, who was ousted by the Obama administration which is overseeing GM’s Chapter 11 restructuring.
“That issue is still being reviewed by the board of directors and the compensation committee,” Henderson said. “I’m not involved in this.”
Henderson is a GM board member.
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