It’s classic tale from the convoluted and mysterious world of the global supply chain. Crain’s Business [via Automotive News [sub]] explains how GM was forced to recall heated windshield washers not once, but twice. And we take a look at why GM took the extraordinary measure of blaming customers and GM technicians for “misdiagnosing” the problem, a strategy that makes for an interesting counterpoint to the recent Toyota recall hoopla. After all, like Toyota’s pedal problems, GM’s heated windshield washer woes are rooted in a complicated relationship with one of its suppliers… and one of its regulators.
(Read More…)

Ed does things that are bolder and bigger rather than small and timid. All things being equal, Ed would like it bigger versus small. But all things aren’t equal. He needs to get the government the best value for its stake, too.

Former AT&T exec James Kahan tells BusinessWeek what kind of IPO GM’s Chairman would prefer. Unfortunately for “Big Ed,” that’s not up to him. GM’s value must be determined by the market, and due to political pressure on the government to end its ownership of GM and Chrysler, it will have to happen as soon as possible. A fourth-quarter IPO with “about half of the government stake [being sold] to the 20 top institutional investors” is in the cards. So we know the government won’t get out of GM entirely in the IPO… but how much will the market give the Treasury for half of its 61 percent stake?

(Read More…)

Doubtless somewhat shocked and surprised about GM Chairman/CEO/Non-Car-Guy Ed Whitacre’s decision to take over product planning responsibilities, Automotive News [sub] did some digging into the decision, and offers a full report. According to AN’s GM sources, the decision comes down to one fundamental goal: holding lower-tier executives accountable for decision making. By reducing executive reviews of forthcoming vehicles by one third, or about four times per development cycle, lower-level executives and engineers will have more freedom to make decisions, and will spend more time developing and less time preparing data for executive reviews. And lest you think this decision doesn’t merit your attention, consider this: though GM’s bureaucracy had created incredibly long lead times, most automakers hold about ten executive reviews per new product. By cutting to four, GM is taking something of a step into the unknown.

(Read More…)

GM is tired of playing third fiddle in the growth market of Brazil. Come on, being outdone by Italians and Germans? Gotta pay to play, so GM do Brasil announced a new investment package for operations in Brazil. That according to car site Webmotors. The money will be pouring in to the tune of R$2 billion or US$1.1b. GM corporate honchos said R$1.4 billion (US$777 million) will go to raise production capacity and modernize its plant in Gravataí, Rio Grande do Sul. The gaúcho plant now produces the Celta and derivatives. The objective, according to the suits, is to (finally!) retire the Celta line in Brazil and other emerging markets and substitute it with the Onyx family line. Will that get GM ahead? (Read More…)

Handling [GM’s] IPO assignment is something of a vanity project for the Wall Street banks, given the relatively small fees the banks will earn through the process. One person familiar with the offering said that the banks may earn less than 1% of the overall deal. At a valuation of $10 billion, that would equal a total fee pool of $100 million.

The Wall Street Journal [sub]’s take on the forthcoming GM IPO. Persons anonymous tell The Journal that Morgan Stanley and JPMorganChase are the frontrunners in the vanity project sweepstakes. But as charitable as the one-percent arrangement seems, the Wall Street mavens have their work cut out for them…

(Read More…)

I understand the economic argument for the off-shoring of production, but I think the practice is reprehensible. U.S. automakers have benefitted greatly from federal largesse and should feel morally compelled to retain and create as many domestic jobs as possible.

As one of the strongest proponents of the Detroit Bailout, Rep John Dingell (D-MI) carries some weight when he makes statements like this. But how can Detroit rise again by ignoring the undeniably strong “economic argument” for outsourcing? In a Bloomberg BusinessWeek feature, Thomas Black shows why production numbers are on the rise in Mexico, and makes the case that the Detroit automakers will only increase their reliance on Mexican production when they are free from government ownership.

(Read More…)

Two Republican congressmen have written to GM CEO Ed Whitacre, asking him to halt the destruction of electronic documents as long as the automaker is owned by the government, reports the Detroit News [Full letter in PDF here]. Reps Darrel Issa (R-CA) and Jim Jordan (R-OH) allege that documents destroyed by GM could have helped their House Oversight Committee investigation of GM’s decision to run its infamous “payback” ad, and shed light on government interference in day-to-day operations including influence over plant locations and a “secret agreement” on revised EPA standards. The congressmen write:

In light of these ongoing investigations, we are deeply disturbed to learn that GM is engaging in a continuous process of destroying documents relevant to the Committee’s oversight efforts

(Read More…)

We knew it would be one of Angela’s feel good meetings. Careful parsing of her statement yesterday gave the clues: “I will do everything so that the employees who were pushing for the preservation of Opel receive all possible help and support we have at our disposal.” Angela hadn’t promised help for Opel. She promised to do what she can to cushion the blow to the Opel workers. Anyway, Frau Merkel met with the Premiers of the Opel states, only to tell them that the decision stands: (Read More…)

GM has released the following statement on its apparent decision to discontinue use of the term “Chevy” in communications.

DETROIT — Today’s emotional debate over a poorly worded memo on our use of the Chevrolet brand is a good reminder of how passionately people feel about Chevrolet.  It is a passion we share and one we do not take for granted.

We love Chevy.  In no way are we discouraging customers or fans from using the name.  We deeply appreciate the emotional connections that millions of people have for Chevrolet and its products.

In global markets, we are establishing a significant presence for Chevrolet, and need to move toward a consistent brand name for advertising and marketing purposes.  The memo in question was one step in that process.

We hope people around the world will continue to fall in love with Chevrolets and smile when they call their favorite car, truck or crossover  “Chevy.”

So, GM’s ban on use of the term “Chevy” hasn’t quite taken effect yet. Above is an image of the front page at Chevrolet.com, and clearly there are still a number of references to the old abbreviation. And no wonder: the term “Chevy” has been a mainstay of Chevrolet’s advertising from time immemorial… up until very recently, you could even catch Chevy ads that never used the whole word “Chevrolet.” We’ve assembled a few ads featuring the word “Chevy” throughout the years, and we present them now in memoriam of a convenient and iconic nickname.

We’d ask that whether you’re talking to a dealer, reviewing dealer advertising, or speaking with friends and family, that you communicate our brand as Chevrolet moving forward. When you look at the most recognized brands throughout the world, such as Coke or Apple for instance, one of the things they all focus on is the consistency of their branding. Why is this consistency so important? The more consistent a brand becomes, the more prominent and recognizable it is with the consumer.

From a GM memo, signed by Alan Batey, vice president for Chevrolet sales and service, and Jim Campbell, Chevrolet’s vice president for marketing [via NY Times]. Chevrolet spokesfolks confirm the decision to abandon “Chevy,” saying the move comes from Chevrolet’s new ad agency of record, Goodby Silverstein. Chevrolet employees are reportedly already using a “Chevy Can,” similar to a “Cuss Can,” in which employees must deposit a quarter every time they say “Chevy” instead of “Chevrolet.” They’re serious about this thing.

(Read More…)

Yesterday, as predicted by TTAC on many occasions, Germany’s Economics Minister Rainer Brüderle denied state aid for Opel. Even before the announcement, his boss Angela Merkel called a pow-wow of the premiers of the Opel states to find out what can and should be done now. The pow-wow will take place today. Yesterday’s statements by Brüderle and his boss are quite telling. Here they are, unedited (German version courtesy of Automobilwoche [sub], translation by yours truly.) (Read More…)

I’ve declared many times on TTAC that I’m a bit of what you folks across the pond would call a liberal. I believe people should have a baseline in terms of living standards, but people should still work for the better things in life. The state should be there to help people, not sustain them. My point is that when an entity gets too much power (or THINKS it has) then the balance of power is shifted and seldom ever for the better. Everything is good is moderation. I feel the same way about Unions. Contrary to popular belief, I’m not anti-union. Unions have done a lot of good for the common working person. They fought for better working environments, better pay, better job security, etc. It is impossible to deny the good they’ve done. But like Harvey Dent said in “The Dark Knight”, “You can either die a hero or live long enough to become a villain”. And unfortunately, this article doesn’t exactly show unions in a good light.
(Read More…)

To be perfectly honest, I wrote about half a post on GM’s decision to give Detroit Tigers pitcher Armando Galarraga a new Corvette after he was robbed of a perfect game by a bad call, before deciding not to run it. Why? Well, the story is classic Detroit: Galarraga’s victimhood is exactly the image GM would like to associate itself with (remember, everything was going fine before the credit markets collapsed), and The General owed the Tigers anyway because of owner Mike Ilitch’s decision to not charge GM for ad space on the stadium’s fountain when it was in bankruptcy (Ilitch added free Ford and Chrysler ads in the interest of fairness). In short, there was plenty of room for some trademark TTAC cynicism… and yet I couldn’t quite bring myself to twist the knife.

(Read More…)