When I visited GM’s Detroit-Hamtramck Assembly plant back in October, I was greeted with a few surprises. One was a small fire that flared briefly on my sweater after a cinder from the Volt’s body-welding station struck me. The other was the sight of GM’s latest, most high-tech green car being assembled on a line that was filled with GM’s oldest-school dinosaur cars, the Cadillac DTS and Buick Lucerne. The scene was no doubt intended to inspire appreciation for the changing face of GM, but the scarcity of Volts amid the oceans of giant front-drive barges (production was just beginning) made it clear that it would be a while before Volt production would occupy much of the sprawling facility. With the DTS and Lucerne headed for retirement, the new 2013 Malibu will be taking up residence at Detroit-Hamtramck later this year, even as Volt production capacity is increased to hit next year’s 60k unit goal. And now GM is announcing that the next generation of Chevy Impala will be built at Detroit-Hamtramck as well, leaving folks in Oshawa saying “eh?” (or words to that effect).

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Pop quiz: when does an eight-month-old story generate a huge amount of interest? When it’s got political overtones, of course. And what better way to milk the last dregs of bailout resentment than by telling a story that seems too bizarre to be true: Cadillac is a “proud” chief sponsor of a Chinese Communist Party-produced film entitled “The Birth of a Party” (or “The Great Achievement of Founding the Party” depending on the quality of your translator). The story started last September, at ChinaAutoWeb.com, and was recently revivified by the Washington Times, Commentary Magazine, and Big Hollywood. Our main interest in the story has to do with its lessons about the rise of China, that country’s tortured relationship with luxury goods, its foreign (from the American perspective) political economy and Cadillac’s continued need for better momentum in China… but clearly others are more interested in it for different reasons.

The political point seems to be that government money is being funneled to the Chinese Communist Party via General Motors, an accusation that, though shocking, doesn’t hold up well to scrutiny. After all, nearly anyone doing business of any kind in China ultimately supports the political and economic structure created by the Chinese Communist Party, legitimizing it and lining its pockets. And surely nobody is suggesting GM abandon China altogether, thus eliminating its greatest opportunity for growth. Meanwhile, as the Freep helpfully points out, Caddy needs all the help it can get in China: without a single vehicle in the luxury car top-ten, Cadillac needs to be aggressive in marketing to China. Still, from a PR perspective, Cadillac clearly has a line to walk here… perhaps it should look for less visible (and risible) ways of building up guanxi (connections) with the powers that be in the world’s largest market for cars.

One of the most consistent and valid criticisms of GM’s product development, even in the post-Lutz era, is the class-leading weight that so many new GM products carry around with them. To a number of industry observers, the lingering weight problem that so many of GM’s cars struggle with is a sign of corners cut in the design process. GM’s cars may look, feel and drive better than they did five, let alone ten, years ago, but clearly the battle for truly “world class” products isn’t over.

And now we’re getting some of the first indications that GM is taking the weight issue seriously, as GreenCarCongress reports that GM’s engineers have pulled 13 lbs out of its 3.6 liter direct-injected V6 simply by redesigning its head. Given that the 3.6 is already one of GM’s better engines, and is used in a huge number of its vehicles, that’s a solid first step as The General takes on the battle of the bulge.

The combined market share of GM and Ford will reach 40% of the US market by the end of 2015. Yes, you just read that correctly. That’s a full five percent more share than what they have today, or a gain of just one percent a year. Call me crazy… but recall that Farago and I called the GM bankruptcy way before most industry observers (and certainly before the BoD of Old GM) could see it coming. Long time TTAC readers will also remember my call to buy Ford’s stock in April 2009 when it was trading in the three buck range. So calm those gut-reactions for a few minutes and let’s walk through this.

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Jefferies is one of those starchy global investment banks and institutional securities firms where a two tone collared shirt is their idea of casual Friday. It is also a place where highly paid financial analysts outsnark the most ruthless TTAC writer, Yesterday, Jefferies sent its “Jefferies institutional clients that include investment managers, insurance companies, hedge funds and pension funds worldwide” a research note that my pal who owns a hedge fund volunteered to share with TTAC readers, as long as we guarantee full anonymity. No problem.

The note is titled “Is GM Turning into a Busted Thesis?” and deals – you guessed it – with the GM stock. H. Peter Nesvold, CFA, and Thomas Fogarty, CFA, both equity analysts at Jefferies, are underwhelmed by the GM share. (Read More…)

One of Bertel and my favorite Chinese car blogs, ChinaCarNews, has been reporting since October than the next-generation of MG/Roewe midsized sedans would be based on GM’s Global Midsized (Epsilon II) chassis (which underpins Buick LaCrosse/Regal and the new Chevy Malibu), and now the rest of the media appears to be catching up. From InsideLine to Autocar, everyone’s running with the story that MG/Roewe, which is owned by GM’s main Chinese partner SAIC, is working on an Epsi II-based MG7 for launch in the 2015 timeframe. According to InsideLine

[In 2015], the MG7/Roewe 750 sedan replacement appears some 15 years after the debut of the Rover 75 they’re based on. A coupelike four-door, it uses GM’s Epsilon platform and will be powered by 2.0 and 2.4 four-cylinder gasoline engines and a 1.9 diesel, all with dual-clutch transmissions.

GM and SAIC signed a Memorandum Of Understanding back in October [.DOC file here], which included the provision that, in addition to developing a next-gen electric architecture,

SAIC and GM anticipate sharing an additional vehicle architecture and powertrain application in an effort to help reduce development costs and benefit from economies of scale.

This could explain MG/Roewe’s rumored use of the Epsilon II chassis, but for the moment GM dismisses these rumors as “speculation.” And no wonder: even GM hasn’t announced when it will offer a dual-clutch transmission in its Global Midsized platform. Chances are, The General will want to offer that combination before its Chinese partners use it to beef up its MG/Roewe brands, which have been in product rehab for some time now.

GM solidly trounced analysts’ expectations and delivered $3.2 billion if Q1 2011 net income.  The consensus of a Bloomberg panel was $1.74 billion. Compared with the first quarter of 2010, revenue increased $4.7 billion to $36.2 billion, says GM press release. GM’s first-quarter profit more than tripled to its highest in at least 21 years. (Read More…)

Today, 3,700 employees of Saab received an invitation to come to an all hands meeting tomorrow, Wednesday. It will be a break from the doldrums. In Trollhättan, the lines have been down for three weeks now because Saab has no money to pay parts suppliers, reports Automobilwoche [sub]. Tuesday ended in Sweden without a solution. Suppliers, unions and Swedish politicians demand immediate action, or Saab will go down the drain.

Talk about a Chinese savior has died down. All hopes hinge on Vladimir Antonov, and the sale of the factory to the Russian, well, business man. The problem is: The real estate is collateral for a loan from the European Investment Bank (EIB). Saab told Automobilwoche that the sale is “no sure” due to harsh demands by the EIB. (Read More…)

An earlier report, stating that Bob Lutz would be returning to GM as a consultant was true… but so was the news that Treasury opposed GM’s plans to pay its longtime executive, who retired a little over a year ago. Speaking to the press at the New York Auto Show, Maximum Bob confirms that he is on the board of Lotus, and revealed that he is doing “pro-bono” work as a consultant for GM’s new product development boss, Mary Barra. According to Automotive News [sub], the prospect of Lutz returning as a GM consultant (ala Fritz Henderson) caused such a stir at Treasury, that he decided to work informally at GM, without pay. Given that Lutz’s heavily-hyped products have yet to return GM to steady retail market share growth, perhaps GM is finally paying him what he’s worth?

When you have a larger joint venture with a Chinese automaker, at some point it will be strongly suggested to you to create a Chinese brand. At least this is how The Financial Times understands it: “Foreign carmakers wishing to build new plants or add capacity in China’s burgeoning car market are being told by the government that if they wish to expand, they must develop a low-cost local car brand.”

Early fruits of these suggestions can be seen at the Shanghai Auto Show. (Read More…)

Remember the gold plated Infiniti that was arrested by Chinese police? Did you think that was a bit over the top? GM China shares your sentiments. Instead of gauche gold, GM China displays an all chrome Buick Excelle XT at the Shanghai Auto Show. (Read More…)

The fifth generation of that other legendary car was launched on China by Shanghai GM. Ample 50s cues were not spared. Rock’n’Roll and a historic Camaro were on hand that had served as the official pace car of the 1967 Indy 500. (Read More…)

Speaking at the New York Auto Show today, GM CEO Dan Akerson defended his inconsistent approach to sales incentives, telling the AP [via The Washington Examiner]

I feel pretty good about that. I think we’re in pretty good shape. I don’t want to be a predictable competitor. I don’t want the other guy to know exactly what I’m doing.

For some context,

GM surprised the industry — and Wall Street — when it raised discounts by $400 per vehicle in January and February. Most automakers didn’t raise them because demand for new vehicles has been rising in line with supply…

GM pulled back on its incentives in March, spending $600 to $800 per vehicle less on the deals. But it was too late for some investors, who shied away from the company’s stock because higher rebates lower car companies’ profits.

But does Akerson’s upside, the element of surprise, outweigh the downsides of his hot-cold incentive strategy?

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With GM’s share price slipping below $30, the cries are going up again around the internet about the government’s stake in the bailed-out automaker. Thus far the Treasury has remained mum on its exit strategy, only indicating that it would emphasize speed rather than maximum return as it charted the course for its sell-off. But now, Reuters reports that “a big chunk” of the government’s 33% remaining stake in GM could be sold “in the summer or fall.” With the government’s shares “locked up” until May 22, that could mean the government is bailing as quickly as possible at a time when GM’s stock is hitting post-bankruptcy lows, and its CEO offers little in the way of explanations beyond blaming the Japanese tsunami and rising fuel prices. The Wall Street Journal figures taxpayers would lose $11b on its “investment” in GM equity if the government sold at today’s prices (the stock must hit $53 for break-even), but reports that political motivations outweigh fiscal considerations. The White House does not want “Government Motors” to be an issue in the next election.

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Retail market share is one of those metrics that tends to cut through the vagueness of pure sales-volume numbers, reflecting an automaker’s performance compared to the competition, without the distraction of fleet sales. It’s not a perfect measure of a business’s overall strength, as fleet sales can help with economies of scale and capacity utilization, but it’s one of the most accurate ways to measure the appeal of a firm’s products with real consumers. And, based on this chart of GM’s monthly retail market share (as calculated by TrueCar VP for Industry Analysis and all-round data ninja Jesse Toprak), GM’s much-vaunted Lutz-era products aren’t moving the needle with those real consumers. Emerging from bankruptcy didn’t seem to provide much of boost either. And unless drastic happens soon, GM’s battle for consumer acceptance will continue its slow but steady decline. Not good!

Hit the jump for raw data and a historical chart of GM’s non-retail market share.

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