Yesterday, Italian police raided the Brescia headquarters of a speed camera manufacturer accused of fraud involving seventy municipalities throughout the country. Officers from the Guardia di Finanza, the law enforcement arm of the Ministry of Economy and Finance, seized computers, machine components and fifty speed cameras as evidence. Salerno prosecutor Amato Barile ordered the raid after discovering that municipalities located hundreds of miles apart were using 512 photo radar units bearing the same individual serial number.
Automotive News [sub] reports that GM will force its remaining dealers to sign “participation agreements” requiring them to complete any upgrades GM requires. If they don’t sign on the dotted line by mid-June they face having their franchise agreements “yanked” says GM’s Mark LaNeve. “They get put into the old company and get a fairly quick termination, like the Chrysler dealers did,” LaNeve said. “Their sales and service agreement will be rejected and put into the old company.” GM will send out letters to its dealers tonight, according to AN, which will detail the requirements to remain a part of GM’s happy family.
Well, Ion Mihai Pacepa was. “When the Romanian dictator Nicolae Ceausescu decided in the mid-1960s that he wanted to have a car industry, he chose me to start the project rolling. In the land of the blind, the one-eyed man is king. I knew nothing about manufacturing cars, but neither did anyone else among Ceausescu’s top men. However, my father had spent most of his life running the service department of the General Motors affiliate in Bucharest.” Plus he was in charge of industrial espionage, which is also a good place to start. Pacepa wrote his recollections for the WSJ, because “the current takeover of General Motors by the U.S. government and United Auto Workers makes me think back to Romania’s catastrophic mismanagement [of its auto industry].” Though the differences between the US and Romania are legion, and not to be forgotten, the story makes for an interesting perspective.
Plug-in diesel hybrids? Anyone? Only 50 grams of carbon dioxide per kilometer! Of course, Volvo’s plans are plagued with the usual “big plans, little company” problems. Like the fact that Volvo has no money. Ford’s Swedish division will build diesel-hybrids with about 30 miles of plug-in capacity for this latest project, while utility company Vattenfall will develop infrastructure and charging systems. In other words, like Mama Ford’s planned plug-in this puppy is only in play because of outside help. Speaking of which, there’s just one more piece to the partnership. “We do of course expect that the purchasing price will be higher,” Volvo’s Stephen Odell tells Reuters. “In this area we are keen to see further subsidies and incentives from the political arena to promote green choice among customers.” Of course.
Government Motors is expected to make an imminent announcement on the sale of its Hummer brand, says Reuters. Note that the revelation comes from Kevin Wale, president of GM China Group. Just another attempt to disseminate more feel-good news in its second largest market? Or an indication of the location of the buyer?
TTAC’s Google ranking on the whole GM bankruptcy deal has delivered unto us a few shout-outs from the MSM. Now that the C11 deed is done, public radio’s “The Takeaway” ’phoned this afternoon—to ask what they should ask GM marketing maven and dealer destroyer Mark LaNeve. Other than that, Al Jazeera. The Arab TV service called to arrange to interview about the collapse of the artist formerly known as the world’s largest automaker. I have mixed feelings about this. On one hand, I’m worried that the network might use my comments about GM’s epic fail, the federal government’s abandonment of free market principles and GM’s bleak future to fuel the fires of anti-Americanism. I am, believe it or not, a patriot. On the other hand, it is what it is. America’s greatest strength is our citizens’ freedom of speech. Of course, I would say that, wouldn’t I? What say you? Should I accept or decline this invitation to discuss the dark side of America’s corporate culture and centralized governance?
This from Fiat spokesfolks speaking with Automotive News [sub]. “The Fiat 500 — we see that, like the Mini[sic], as a sort of boutique car that we think we can sell in good numbers on the East and West coasts in the same way that Mini has been successful in the U.S.,” he tells AN. Interestingly though, the 500 will also be the only Fiat-badged vehicle in the new generation of Fiatsler products. But, says the Fiat source, “there is a misconception out there that Chrysler is going to build the Fiat Bravo, just stick a different badge on it. They will be Chrysler products. They will be specific to Chrysler. The vehicle architectures will be based on our stuff, and there will be some powertrains. The vehicles will be U.S. vehicles, designed for U.S. customers by a U.S. company.”
Our man on the ground has passed along a few documents from GM’s first day filings in bankruptcy court. And it seems that Fritz Henderson’s “Faster, Pussycat Kill! Kill! Kill!” strategy is for real. This looks to be one mother of a fast bankruptcy. As the sale agreement states, “Consumers must have confidence in GM’s products, i.e., that a new GM will exist in the future so that it can stand behind its products. It is in this context that the timing of the transformation of the assets, in connection with the approval of the sale, becomes critical.” The fact that GM is filing a sale agreement on its first day shows that speed is the critical factor. Even Chrysler’s relatively rapid sojourn in Chapter 11 didn’t start with a sale proposal on the first day. Debtor-In-Possession financing has been lined up as well (big hand for your US taxpayers), including an expected $950 million “wind-down” loan. The lawyer carve-out is also limited to $20 million. Hit the jump to find out how it all could go wrong (but probably won’t).
Motor Trend has picked up on news that GM plans on building a B-segment replacement for its Aveo at a US-based, UAW plant. True to form, the new Fiesta competitor will not build on the rich legacy of goodwill accumulated by the Aveo. Probably because the Aveo was a repeat TTAC Ten Worst offender that built no such legacy of goodwill. And thus a new name is born: meet the Chevrolet Viva. MT figures Lake Orion, Michigan; Wilmington, Delaware; or Shreveport, Louisiana, could get the nod. “Building a Chevy Viva in a UAW plant will cost more than building the Aveo in South Korea,” figures MT. “It should be much more stylish and upmarket compared with the current Aveo. Chevy would have the advantage over Ford of a more ready supply of its competitor if the b-segment, fueled also by the coming Fiat 500 and a small Dodge, takes off in the next few years.” Count the assumptions there, folks. Meanwhile, with a Fiesta-Viva battle brewing, it seems that the automakers may be paying attention to the increases in Hispanic population in the US.
Dan Neil’s April 2005 review of the Pontiac G6 ended by calling for fresh blood at the top of GM. His comments triggered the GM advertising boycott that inspired TTAC’s General Motors Death Watch. As you might expect, the Pulitzer-prize winning carmudgeon has a few things to say about GM’s bankruptcy. But I bet you wouldn’t have guessed that GM’s most famous (and talented) nemesis would mark the occasion by suggesting that failing to fully support Al Gore’s bid for the U.S. presidency was the company’s ultimate undoing. No really. Writing in the LA Times, Neil claims that “by backing Gore, who had the support of organized labor, GM would have gained enormous goodwill with the United Auto Workers, goodwill it desperately needed as it attempted to downsize in the new century. Gore also argued for universal healthcare, a program that, had it become reality, might have relieved GM and the other domestic carmakers of that burden . . .
Advertising Age asked the same question of a brace of marketing experts, with predictably hilarious results. Early on, one Mad Man suggests revamping GM by introducing “a promotion that would transform General Motors into America’s first truly owner-owned company: The government issues anyone who purchases a new GM vehicle in the next 12 months 1,000 shares in General Motors stock. Then GM shareholders become people who are motivated to make both better products and a better company.” Seriously. As if the cure for GM’s woes were for marketing to wag the entire bankrupt dog. Anyway, check out the whole thing for a wild assortment of interesting ideas and pure, unadulterated crazy. Then riddle me this: how does GM take advantage of its new structure and piles of tax money while minimizing bailout backlash? Or does it? Can a government-owned firm be popular with the public under any circumstances?
TheDetroit Free Press is reporting that GM supplier Delphi will emerge from its three-year bankruptcy by selling itself to L.A.-based private equity firm Platinum Equity, for $3.6 billion. The bad news? Delphi will terminate its salaried pension plan, which covers 20,000 workers and retirees.The Pension Benefit Guaranty Corp will take over Delphi’s pensions, a move which will “cap the annual payments to $54,000 a year for salaried retirees age 65 years or older.” Delphi’s hourly retirement fund “will be addressed by GM.” Or not. Whichever.
“It’s not something we would bring up on our own, and we don’t know enough about the restructuring plan,” Toyota’s President Katsuaki Watanabe told a small group of reporters, one of them writing for Reuters. Ever so polite, they would never suggest something like that on their own. But . . . “If some talk about supporting GM comes up, we would like to consider it earnestly.” Fritz Henderson, two magic words: Tasukete kudasai. Help me, please.
Recent Comments