A few weeks ago, I wrote about rumors circulating that the Saturn plant at Spring Hill, Tennessee may be coming back online as GM’s volume increases. Well, the rumors are getting stronger. (Read More…)
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Just weeks ago, Amp Electric Vehicles CEO Steve Burns told the New York Times
G.M. doesn’t know if we are friend or foe… They’re trying to figure it out.
What The General was trying to figure out was whether allowing Amp to sell $50k electrified versions of its Chevrolet Equinox is a good or bad thing. After all, if BMW can charge $800 per month for EV-anxious consumers to test its disappointing MINI E, why shouldn’t GM get in on the early adopter-scalping game? Two weeks ago, GM spokesfolks said
We’re pro-E.V., and it’s a good thing that there others out there moving the electric vehicle market forward.
Today, Amp is announcing that it has signed an agreement with “a major OEM” to electrify one of its SUVs… within 60 days, no less. Though the press release doesn’t specify which OEM is sponsoring the project, the fact that AMP exclusively electrifies GM products and hires former GM consultants should speak for itself. And with Tesla prepping an EV RAV-4 for Toyota, would it be shocking to find out that GM is playing the me-too game by commissioning an EV Equinox? On the other hand, maybe we should take the “SUV” label seriously and consider the possibility that Amp is electrifying a full-size GM ute? Either way, the trend towards rapid outsourced development of EVs is seriously starting to take hold…
Wolfsburg must be fuming. Among all the good news coming in from all corners of the earth, there’s a market that insists on being the proverbial thorn in their side. That’d be my little ole Brazil, which is, en passant, the world’s fourth largest. And it’s a market where Volkswagen has been nearly forever. Well-known Brazilian automotive journalist Fernando Calmon, writing for the just-auto website, reports a major shakeup in automotive brand values in Brazil (can you feel the ground shaking a little?). Mr. Calmon, citing the Brand Finance consultancy, reports that the most valuable car brand in Brazil is… (Read More…)
Remember the Saturn Vue? It’s back, baby, and more cannibalistic than ever. Starting in 2011, the refreshed Chevrolet Captiva will be undercutting Opel’s Antara, itself a rebadge of the same Daewoo Winstorm. Because what Opel needs right now is to prove that sometimes it’s worth paying a little extra for a German brand on your rebadged Korean Crossover. That’s what you call giving a brand a sense of purpose. Meanwhile, does anyone out there actually miss the Vue?
Digging through the finances of a company as large as GM is never an easy task, especially when the balance book in question was recently wiped clean in a bailout-bankruptcy. Luckily, Bloomberg columnist Jonathan Weil has the chops to do the task justice, and he’s come up with a fascinating insight: through the power of an accounting tool known as “Goodwill,” Weil claims that GM has juiced its assets and liabilities during its “fresh start.” He notes with TTACian zeal:
It’s as if a $30.2 billion asset suddenly materialized out of thin air. In the upside-down world that is GM’s balance sheet, that’s exactly what happened.
The short version: GM undervalued some assets and overvalued some liabilities during its “fresh start.” The scary result: improvement in GM’s performance and creditworthiness could actually lead to writedowns on its Goodwill… which is currently The General’s largest non-current asset. Oh yes, and without that $30.2b in Goodwill, GM would have about an equity value of -$6.3b. Welcome to the new General Motors…
(Read More…)
When you start a new job, it’s considered important to make a good impression. How does the saying go? “Start as you mean to go on”. Well, Dan Akerson, I suspect, tried to heed that advice and ended up putting his foot in it. The Associated Press reports that Dan Akerson, CEO of Government (soon to be “General” again) Motors, presented a webcast to GM employees. The usual CEO rhetoric came out. “GM needs to keep competitors on their heels rather than responding to what they do” said one GM worker, who asked not to be identified as the broadcast was not available to the public; despite being owned by them. “Attack mode” was another phrase used. But then Mr Akerson said that GM’s Cadillac brand has to make cars that are better than BMW’s. Now I thought this was quite a harmless statement to make. The CEO set a (quite high) benchmark to beat. Sounds reasonable, right? Not according to some. (Read More…)
The current mantra at General Motors: Everybody and everything look sharp and attractive for the coming IPO. During the sprucing-up operations, there are times when someone at RenCen sighs: “Maybe we should have gotten rid of Opel after all.” (Read More…)
Editor’s note: GM CEO Dan Akerson sent the following email to GM’s employees, his first such communication as GM’s CEO, in recognition of Labor Day Weekend Eve.
GM Employees,
As Labor Day approaches in the U.S. and Canada, I would like to wish everyone at General Motors a safe, happy holiday weekend. I also ask that we pause for moment to reflect on what this day means as we celebrate labor’s many contributions here and around the world.
Of course, labor’s role in building up this nation and others is well recognized and rightly so. And, coming from a union family, I know on a very personal level the good things that unions can do.
We can’t pretend to be overly enamored with former “car czar” Steve Rattner, who oversaw the auto bailout before being disgraced for his role in a New York pension fund pay-for-play scandal. Still, the guy was in the thick of things during last year’s negotiations over Detroit’s rescue, so he knows where the bodies are buried. And in his new book, Overhaul, which has been released to select outlets ahead of its October 14 publication, he tells a whole lot of stories about the months of bailout proceedings that led to the rescue of GM and Chrysler. Of course, Rattner has an agenda in all this, namely proving that
so he’s not necessarily an unbiased source. But with grains of salt at the ready, let’s dive into his spilled guts and see if what secrets lie beneath.
Another day, another story detailing the political nightmare that is the GM IPO. The WSJ [sub] reports that
The U.S. Treasury is concerned about how many overseas investors it should allow to buy big stakes in General Motors Co. through the car maker’s initial public offering this fall, according to people familiar with the matter.
The caution—aimed at minimizing any political fallout from the massive stock sale—could involve limiting or being selective about which non-U.S. investors such as sovereign-wealth funds would be invited to be “cornerstone” investors in the IPO
Expect Treasury to publicize any limitations on foreign investment in GM’s IPO sometime “within the next couple of weeks.” And no matter how the bureaucrats rule, it won’t be great for taxholders. After all, foreign investors (particularly in China) have the motivation and means to invest heavily in GM, which would help boost the IPO price. The downside, of course, is that the taxpayers’ $50b investment wouldn’t have kept the company American-owned. If keeping ownership in the US is the priority, it’s fair to expect a considerably lower IPO valuation. Heads they win, tails we lose. Ain’t the intersection of politics and business grand?
Looking for proof that politics are an overriding concern for GM during its forthcoming IPO: look no further than a report by Reuters which claims that
GM’s roadshow is set to begin on Nov. 3 and will last two weeks, the sources said. The IPO is expected to price on Nov. 17 and debut on Nov. 18.
Now why would GM wait until the day after midterm elections to file? Well, it could be so GM has time to file 3rd Quarter financial data before offering shares to the public, but GM’s CFO has already warned that 3rd Quarter results will be worse than results from the first half of the year. In other words, waiting to file is likely to materially hurt the IPO (and taxpayers’ chance of payback). But if GM launches its roadshow the day after elections, it won’t turn the midterm election into a referendum on the auto bailout, a situation that would surely exacerbate the already-strong anti-incumbent trend in American politics. And clearly protecting craven pols is far more important than maximizing the return on “investment” for taxpayers, right?
People have a lot of fears with electric cars/extended range electric cars. Will the government subsidies distort the market? Can manufacturers be able to sell them profitably? Are they really that environmentally sound? But the one which gets everyone is “range anxiety”. Will I have enough juice to get me home? It’s an issue which manufacturers are dealing with in their own ways. GM has come up with their own way of dealing with it; they’re trademarking it: With range anxiety being trademarked, someone just dreams the word, and GM’s lawyers will be on top of him, and make him surrender the illicit dream. (Read More…)
Sales of GMs core brands dropped 10.6 percent in August compared to their Cash-For-Clunkers-fueled August 2009 performance, but overall sales were down 25 percent. Because the C4C program helped The General shift more value-oriented models, Buick was up 66 percent, Cadillac was up 83 percent, and GMC was up 12.3 percent, while Chevrolet shed 21.5 percent.
In recent interviews with Automotive News [sub] and AutoObserver, GM’s recently-hired marketing boss Joel Ewanick dished out some of the insights that have earned him the reputation for being an ace image guy. He tells AN [sub] that
Consumers don’t buy General Motors. General Motors sells nothing
Oh, really? Because GM decided to remove the GM Mark of Excellence from its vehicles right around the time it emerged from bankruptcy, the better part of a year before Ewanick was brought on board. Since the first Government Motors joke emerged on the internet, GM has sought to distance itself from its corporate umbrella’s brand… and this is the insight Ewanick is bringing to the organization? Hell, Automotive News [sub] suggested that “Stop mentioning General Motors” when he was hired in June of this year. Which leaves Ewanick only one choice: don’t talk about General Motors more than anyone might imagine.
When Opel needed a a low-cost subcompact for the European market, it did what all good car companies do: rebadged a Suzuki. And thus, the Opel Agila was born. For the latest version of the Agila, which debuted in 2008, Opel opted to let Suzuki build the car itself at its Hungarian plant (alongside the Suzuki SX4 and Fiat Seidici). It also tasked its Managing Director, a man known around the office as “Mr Opel,” with developing the new micro-MPV in partnership with Suzuki. For his trouble, Mr Opel (aka Hans Demant) was then shunted aside by GM, and ended up being poached by VW to head up “international project coordination.” Quite by coincidence (or not), VW’s biggest international project is in building new low-cost small cars with… Suzuki. Automotive News [sub]’s Paul McVeigh notes that
Neither GM or Opel has commented publicly on Demant’s defection to archrivals VW. But executives are said to be very angry in private.
But then, GM could hardly have expected Demant to stick around after having been shuffled off to “intellectual property protection” after nearly 40 years of service to Opel at some of the highest levels. The fact that he’d just been demoted at a time when Opel’s owners in the RenCen were enjoying record-low popularity in Germany made the move all the more likely. And because it’s happened at a time that Opel is struggling for its life makes the move just as damaging to GM as it is a windfall for VW.
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