Good morning! Two years after GM reneged on the Opel sale to Magna and Sperbank, the Times of London has the big scoop. GM cancelled the sale of Opel because the buyers wanted the right to sell its factories to a Russian state-owned car maker, says the Times, citing U.S. diplomatic cables revealed in Wikileaks. Really? You don’t say! We are shocked! (Read More…)
The word “truth” in our title has long been a cudgel for our critics, who, finding fault with our analysis, condemn us for failing to publish their version of the truth. But, as I’ve steadfastly maintained since taking up TTAC’s editorial reins, we do not hold ourselves up as the sole source of truth. Rather, by provoking an engaging discussion, we hope that our readers will use our posts as a jumping-off point to debate the issue at hand with vigor. The truth, as I find myself saying again and again, is a journey, not a destination.
Accordingly, I’m always thrilled when manufacturers read our pieces and offer up their own counterpoint to the discussion, broadening our understanding of the issue at hand and moving the conversation forward. One of my posts from yesterday, which examined GM’s decision to invest in full-sized truck production in the midst of CAFE negotiations and an inventory backlog, has drawn just such a thoughtful response from GM’s Tom Wilkinson, which is published after the jump. It provides some inside perspective on GM’s decision to move forward with the next generation of full-sized pickups, and is a great example of the kind of conversations that TTAC hopes to start every day.
(Read More…)
[UPDATE: GM responds to this piece here]
With environmentalist groups on the warpath over forthcoming 2017-2025 CAFE standards, trucks sitting on lots, and the Flint HD Pickup plant idled for much of the month, this is probably not exactly the moment GM might have chosen to put $328m into tooling for new full-sized pickups to be built at Flint. But time and the market wait for no company, and because the Silverado is GM’s single best-selling product, the investment isn’t tough to justify:
“Truck sales play an important role in the success of General Motors,” said Joe Ashton, UAW-GM Vice President. “We are confident that the next-generation of trucks will continue to be an important source of revenue for the company and jobs for our members
In case there’s any confusion though, GM is making perfectly sure nobody thinks they’re making any product choices because of union demands. At the investment announcement ceremony at Flint, Cathy Clegg, GM vice president of labor relations told Reuters [via Automotive News [sub]]
We certainly aren’t going to make a decision and make a commitment solely as a way of getting an agreement. If the market doesn’t drive it, we can’t do that
So, how is that truck market?
No good deed goes unpunished. While the leadership of GM refuses to comment on Opel, Volkswagen’s Winterkorn filled the void and dispensed some helpful advice. He said that only the Chinese would be interested in Opel, and even that remains a very theoretical possibility. GM did not like that advice and fired back.
GM top echelons refused to break cover. Instead, there is a big pronouncement on GM’s website.
“General Motors has a longstanding policy of not commenting on rumors and speculation. Unfortunately, some of our competitors do not show similar restraint. (Read More…)
GM still won’t comment on the matter, but a recent rumor that the Cruze’s two-liter diesel engine will be federalized for the 2013 model-year has been confirmed to the AP [via the DetN] by “two people briefed on GM product plans.” That motor, designed by VM Motori and built since 2006 by GM-Daewoo, was recently updated to Euro 6 standards, and according to the Holden website, the Australian-spec version makes 160 HP (at 3,800 RPM) and 236 lb-ft (at 1,750 RPM), while returning 42 MPG (combined with manual transmission) or 35 MPG (combined, automatic). Of course those aren’t EPA numbers, and they could easily change by the time the engine is certified for US emissions standards.
We didn’t want to mention it when we wrote about GM’s buy a car, get free insurance deal. If we would have said it, it would have been the nasty B-word all over again. The rest of the media showed less compunction. “The worse you drive, the bigger the deal” headlined MSN Money. The deal can be staggering under the right or wrong circumstances, says MSN Money: (Read More…)
When we wrote about dealer lots overflowing with trucks, especially of the GM kind, there were a lot of nods, but also many flames. Some commenters said it can’t possibly be true. Mainly because the charts were the product of financial analyst algebra that was not readily transparent to the common high school graduate. Then, we received messages accusing us of sleeping, because other more esoteric blogs supposedly “called the GM bulls.. months ago” ago. (Or two days later.) Can’t please them all. However, today, Automotive News [sub] confirms that “Big pickup trucks are clogging many U.S. dealer lots, causing headaches for General Motors and other automakers, and raising concerns about price wars and lower profits later in the year.” (Read More…)
At GM, Joel Ewanick and Chris Perry need to repeat the miracles for which they became famous at Hyundai. So what do you do in that case? “Let’s just do the same thing again.”
If GM would do a repeat of the Hyundai Assurance Plan (lose your job, return your car), with a 10 year warranty thrown in, the journos would snicker, but the cars would fly off the lot. But at GM, this would be too gutsy. So what about the next best idea? That’s right: “Free insurance!” (Read More…)
It has been around the net since yesterday that “trucks are piling up on auto lots” and that this could spell “trouble for GM.”
Bloomberg reports that GM did bet on a strong recovery and built more trucks to fill the imaginary demand. “The strategy is backfiring.”
The National Legal and Policy Center has more sinister suspicions. It states that “it looks like General Motors is up to its old tricks as it stuffs inventory channels with higher profit trucks.” The center is accusing GM and the Obama administration of “fudging earnings.” (Read More…)
Our patent-pending China sales oracle has spoken, and it says. The only bubbles in China are in the heads of some self-styled experts.
Looking at the June and half year results of GM China, one can only conclude that all is well in the Middle Kingdom. What’s good for GM China is good for America: China is GM’s largest market. GM’s sales in China are up 9.9 percent in June and 5.3 percent for the half year. But there is a much more important lesson: (Read More…)
Fortune [via CNN]’s Alex Taylor III is clearly as disappointed as I was with Joe Nocera’s toothless, vaguely pro-Volt piece in last Sunday’s NY Times, and he’s riled up enough about it to lay down a savage call-out the Volt hype machine. In fact, it’s a less scientific, less comprehensive (and, by virtue of the passage of time, less speculative) version of a piece my father wrote in 2008, comparing the then-undelivered Volt with the also unlaunched 3rd gen Prius and Plug-In Prius. Taylor’s foil for the Volt is the plug-in Prius, which now arrives in less than a year, and in the eyes of the longtime industry writer, the contrast is stark:
Volt enthusiasts like to recite the fact that the Volt can go 35 miles on battery-power and then shift seamlessly into gasoline-engine mode, saving on gas and reducing emissions of greenhouse gases. It is an impressive technological improvement but one that is already obsolete.
Here’s why:
Our sharp-eyed, GM-obsessed buddies over at GMInsidenews.com captured this image from a video that appears to have disappeared from the GM.com website, and they’re pretty sure it shows a skin-off look at the forthcoming Cadillac ATS. Based on the troubled (think: 4,000 lbs)Alpha platform that will also underpin the next-gen CTS and Camaro, the ATS is likely to launch with four-cylinder engines in naturally-aspirated and turbocharged forms, with a possible twin-turbo V6 rumored for the “V” version. Unless, of course, GM has made the questionable decision to engineer the platform to take a small-block V8 (which actually would not be much harder to package than a twin-turbo V6). Meanwhile, the big news recently on the ATS front has been GM CEO Dan Akerson’s opinion that the ATS and XTS
are not going to blow the doors off, but they will be very competitive.
We can’t see any front or rear subframes, so rumors of a complex and “sub-optimal” multilink front suspension must remain rumors for now. Otherwise, the body seems to have some strong potential looks-wise. Let’s just hope the entire package is able to deliver something better than what the rumors are suggesting, otherwise GM will have squandered yet another opportunity to crack the lucrative 3-Series market.
Smell that? It’s the gathering scent of a new industry trend towards natural gas. Honda’s expanded its pioneering Civic GX to 50 states, Sergio Marchionne wants to replicate his Italian CNG success at Chrysler (eventually), and now GM is jumping on the bandwagon while it’s still relatively uncrowded. The Winnepeg Free Press reports that GM has signed a development deal with Vancouver, B.C.-based Westport Innovations which could see a prototype light-duty natural gas-powered engine completed “within 18 months” if preliminary study proves promising. A Westport spokesman boasts
If both parties agree to move ahead with commercialization this would be one of the first pure OEM [natural gas-powered] products
You know, except the Civic GX which has been prowling American streets since 1998. Still, with Chrysler targeting CNG commercialization no earlier than 2017, GM could have a strong head-start on a fuel technology that promises to be a viable and promising gasoline alternative, especially if the NatGas Bill [PDF] passes, expanding $7,500 plug-in tax credits to natural gas vehicles. And GM’s got a strong partner in Westport, which has heavy-duty commercial deals with Cummins and Caterpillar. With Nissan all-in on EVs and years ahead of the competition in terms of global EV production capacity, look for other competitors to hedge their alt-energy bets… and natural gas is rapidly becoming the most popular alternative.
Talk about bad associations! Bloomberg reports that
General Motors Co.’s European Opel unit is introducing models with advanced options typically sold on luxury cars, seeking to revive a business that’s lost $14.5 billion since 1999.
The GM unit is working with AlixPartners LLP on how to tweak options packages or production plans to spur higher prices, said two people familiar with the matter. They are also studying ways to reduce engineering and manufacturing costs, said the people, who asked not to be identified disclosing private plans. Some new features include headlights tuned to high-speed driving on the Autobahn.
Which leads to one damning conclusion:
“They can’t price their cars like Audi or BMW,” said Thomas Stallkamp, principal of Collaborative Management LLC, a Naples, Florida-based consulting firm. Stallkamp, a former Chrysler Corp. president, was a partner at private-equity firm Ripplewood Holdings Inc. when it tried to buy Opel in 2009. “They’re like the Chrysler of Europe.”
Keep in mind, this isn’t just any old analyst… this is a guy who tried to buy Opel back when it was officially for sale. And though pricing issues in the face of rising costs are one Chrysler-like problem facing Opel, there’s another issue that may even be more troubling…
I love General Motors. I’m bringing this age-discrimination suit action because it’s the right thing to do — for me, my family, as well as my GM peers who have been severely affected by GM’s conduct.
A critical aspect of GM’s turnaround was breaking a culture that has been held up for decades as an example of insularity, stagnation and inefficiency [for more read Ron Kleinbaum’s classic four-part editorial on the subject here], a task that various recent CEOs have gone about differently. Fritz Henderson had a “change agent” vanguard approach, while Ed Whitacre took more of a “set tough goals and fire regularly” tack towards GM’s culture wars. But regardless of differences in tactics, everyone’s agreed that GM’s culture needed to be seriously retooled if the company’s huge advantages after a government-backed bankruptcy-bailout weren’t going to be pissed away, and as a result a lot of GM’s “lifers” found themselves on the outside looking in. And rather than slinking away, one of those jilted lifers is suing GM for age discrimination.
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