Last week was an eventful one for Tata Motors. First, Daimler announced that it had completed selling off its 5.34% stake in the Indian automaker, for USD $422 million. Investors including Citibank and Tata Sons, the largest current Tata Motors stockholder, acquired the shares. Daimler explained the move by saying that it is now well enough established in India in terms of passenger and commercial vehicles, to no longer need an equity share in a local company. Daimler already builds CVs in Pune and its new CV plant in Chennai will go online in 2012. Daimler and Tata have a relationship that dates to 1954, when Tata started assembling Mercedes-Benz trucks. The two companies started local assembly of M-B cars in 1994 under the Telco joint venture.
Flirtation between Nissan and GM has a rich history, dating back to 2006, when the two firms nearly merged, in a move that would have left Nissan-Renault’s Carlos Ghosn in charge of French-Japanese-American juggernaut. GM fought off Ghosn’s advances (and a stockholder rebellion) to stay independent, but with a post-bankruptcy IPO now looming, Ghosn has once again appeared on GM’s horizon. In a bit of in-depth speculation at Dow Jones Investment Banker [via the WSJ [sub]] Jamie Miyazaki and Alessandro Pasetti break down the pros and cons of a Renault-Nissan hookup with GM. Their conclusions: although, Renault is currently playing footsie with Daimler:
Over the long haul, looking west to General Motors in the U.S. could prove more fruitful for Renault than strengthening partnerships in Europe’s saturated market. Taking an equity stake in a reborn, and eventually relisted, GM would give the Renault-Nissan alliance exposure to the U.S. auto giant’s diverse geographic presence… GM [has] shifted about 37% of its total 2009 sales in Asia, South America and Eastern Europe, according to J.D. Power & Associates data. Throw in GM’s plans to ramp up its Indian operations and its large presence in the Brazilian market, where Renault is investing to roughly double its market share to 10%, and the Detroit giant’s allure is obvious.
All kinds of strange news are coming from GM’s Korean foster child Daewoo. Two days ago, Daewoo CEO Mike Arcamone announced: “In 2010, GM Daewoo will be profitable. That is my target.” That didn’t get much traction. Reporters wanted to know how bad last year’s numbers were. Arcamone remained tight-lipped. He admitted red ink for 2009, how much remains anybody’s guess. In 2008, it was $773m worth of red. Last October Daewoo-is-me had to be bailed out by the bailed-out GM to the tune of $413m. Arcamone has some soothing news: “We currently do not seek any other financial support from our creditors.” The operative word is “currently.” There is one way to stop the hemorrhage for good: Pack it in. Read More >
The former GM-Toyota joint-venture known as New United Motor Manufacturing Inc (NUMMI) in Fremont, CA is a big plant. Its nearly 5,000 employees can churn out over 400,000 compact cars and pickups in a year when operating at full capacity, which of course it hasn’t been for some time. With GM leaving the joint venture during bankruptcy, and Toyota currently winding down the remaining operations, those 4,700-ish employees and their 5.3m square foot plant need work. Local media call their outlook “gloomy,” noting that semiconducter workers will be first in line for the few new manufacturing jobs in the area, with a solar panel firm. But, in keeping with the green revival theme, an electric vehicle startup called Aurica says it’s in negotiations to take over NUMMI, where it says it will build unspecified EVs, in a venture that currently has an “undisclosed” finance plan. Are we buying this? Let’s look at some numbers.
Japan’s Automobile Manufacturers Association said “hai, wakatta” (yes, we understand) to their government, and promised to “actively support the creation of an international mutual-recognition framework for passenger cars,” reports The Nikkei [sub].
Edmunds AutoObserver Michelle Krebs, commenting on the termination and replacement of Cadillac’s leadership, concluded, “If GM is going to change and is going to succeed, it must change people.” Paraphrasing Eistein, she added that “Doing the same thing over and over again with the same people in the same positions and expecting a different result is…insane.”
Michelle Krebs is far from the first to suggest that, to survive, a struggling company must replace the executives that oversaw its decline. And she won’t be the last. But this is a superficial solution that, without additional measures, will surely fail.
One of the main topics at the Toyota hearings held in recent weeks is the automaker’s practice of hiring former NHTSA officials to its lobbying team. At the time, we were inclined to believe that Toyota was hardly the only firm engaging in this practice, and thanks to some Washington Post reporting, our suspicions have been confirmed. Early controversy centered around Christopher Santucci and Chris Tinto, two NHTSA Office of Defect Investigation officials who now work for Toyota. In addition to these two, the WaPo has identified former NHTSA lawyers Kenneth Weinstein and Erika Jones as former NHTSA officials who also now work for Toyota. And then there are the former regulators who work for other automakers: Jacqueline Glassman, a former NHTSA chief counsel and then deputy administrator now works for a law firm that represents Nissan and Mercedes. And that’s not all:
Former agency compliance engineer Amanda Prescott now works for Ford. Former agency director of the Office of Crashworthiness Research, Ralph J. Hitchcock, now works for American Honda Motor Co. And past agency administrator Diane Steed is a partner at Strat@Comm, a Washington public relations and lobbying firm that represents General Motors Corp.
And once again, Toyota wriggles out of some of the most damning accusations against it, not by confirming that it actually holds itself to especially high quality and safety standards, but by proving that it’s just like every other automaker. As we noted some weeks ago, this loss of exceptionalism is the ultimate price that Toyota will pay for this scandal (not counting lawyer fees).
Carmageddon was hell for makers of premium brands. For all but – Audi. Audi closed out the crisis year 2009 with a after tax profit of €1.3b, reports Automobilwoche [sub]. And all that despite sinking sales. Speaking of sinking sales, Audi emerged relatively unscathed from 2009. Their sales sunk by only 5.4 percent, mostly due to booming business in China. Even the workers profit. Read More >
The Japanese government floated a highly interesting idea in Geneva. It could possibly revolutionize international car trade. Except for the United States. According to today’s Nikkei [sub], the Japanese government has proposed that the World Forum for Harmonization of Vehicle Regulations, a working party of the United Nations Economic Commission for Europe, create a system for international whole vehicle type approval. The UNECE immediately began looking into the idea last Saturday, and as per the Nikkei, by Saturday evening, “a majority of the member countries had agreed to the proposal.” That was fast.
It did not need much work: An international mutual recognition framework already exists for automobile components. The USA and Canada are absent from this framework. Says the Nikkei: “But for vehicles themselves, automakers have to obtain for each model approval from their own government as well as the governments of the countries to which they export.” Well, not exactly. Read More >
Apparently eager to avoid uncertainties of the Congressional-mandated arbitration, GM announced that 661 of its 1,160 terminated dealers that sought arbitration would be back in business pronto. Automotive News quotes GM North America President Mark Reuss: We are eager to restore relationships with our dealers, and get back to doing what we do best — selling cars and taking care of customers,” “The arbitration process creates uncertainty in the market. We believe issuing these Letters of Intent is good for our customers, our dealers and GM.” Read More >
Chrysler fan site Allpar.com got its paws on a list that it says depicts Chrysler’s upcoming production plans. If true, this list confirms that many of Chrysler’s refreshed products won’t be hitting the streets until 2010 is nearly over, and that the debuts will come thick and fast. So don’t expect much to improve in the way of sales for Chrysler until at least December. Even then, every other TV ad will have to be for a Chrysler, Jeep or Dodge if the firm hopes to educate the buying public about these re-launches. The chances are good that Chrysler will survive until December, barring any supplier issues, recalls or further sales dips. Come December, when we have seen and driven this new generation of Fiat-refreshed products, we’ll have an idea of Chrysler’s chances of survival until 2013, when the next wave of fully Fiat-developed projects arrive. This should be interesting.
While Toyota is trying to convince the American public that they’re as American as losing at hockey Wal-Mart, Hyundai is pulling the same stunt over at the other side of the pond. Forbes reports that Hyundai wants to become a card carrying member of the European Automobile Manufacturers’ Association (ACEA). Read More >
This is the news from the Lake Wobegon car show, where all the vehicles look beautiful, all the engines are low-emission, and all automotive managers are above average. No wait, this is Geneva, probably the world’s most important car show. The rest of the opening sentence is true, though — at least, that’s what public relations would have you believe. Read More >
GM has announced its new North American organizational shuffle [full release available here], and have included the following slides to help explain some of the changes. The clear winner: President of NA operations, Mark Reuss, who had this to say:
It’s become extremely clear to me since taking this role that there is a better way to structure this organization. The premise of the structure is simple — a clearer marketing focus to sell more vehicles, and freeing our sales and service experts to focus on customers and dealers. In order to be successful in North America, we need the right mix of product, people and structure. We’ve worked with a small group of executives to align this model and appoint the best candidates for each job.
Notice how he doesn’t call the new structure a simplification. As the following slides show, there’s nothing simple about the structure changes. In fact, the only thing that’s certain about this latest GM reshuffle is that wrestling with GM’s bureaucracy still takes up as much time for top managers as actually working on products, planning, outreach and other core business activities.
Here’s a question for you automotive sales historians: when was the last time (month) Ford outsold GM? Four hundred and seventy one cars was the difference, but the bragging rights would have been worth it if Ford had given them away. Here are the highlights: Sales were up a Toyota tidy 22% from January. Camry-fighter Fusion experienced unintended sales acceleration, rocketing ahead at an unrestrained 116 mph percent.Ford brand vehicles were up 46%; Mercury +24%; Lincoln +19%. Company wide, passenger cars were up 54%, utilities +39%, trucks +36%. Retail sales were up 28%, as fleet sales came back to “normal” after a near stand-still a year ago. Ford estimates its February market share at 17%, up a hefty 3 points from a year ago. Detailed charts follow: Read More >
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