The Detroit News, by some regarded as the in-house organ of GM, has issues with GM. The DetN doesn’t like GM’s latest TV ad (“some future models shown”) in which Ed Whitacre proclaims that GM paid back its “loan, in full, with interest, years ahead of schedule.”
The “GM ad glosses over the reality” complains the headline of the article in which the former unofficial organ of GM rips Whitacre a new one. Says the DetN: “He’s technically correct because he clearly uses the word “loan.” Otherwise vague? Yes. Misleading? Depends on your perspective.”
To stay alive, Opel wants to scale down. The factory in Antwerp is being closed. With amazing results for Opel’s bottom line: Closing the factory costs GM around €400m ($532m) in termination benefits. GM and the unions reached an agreement on the termination benefits earlier this week, reports Reuters. There are 2,600 workers in Antwerp. Now do the math: $532m divvied up amongst 2600 workers is a little bit over $200,000 per worker. Ouch! Wait, there is more pain … (Read More…)
[Editor’s Note: The following farewell message from GM Vice Chairman “Maximum” Bob Lutz was published today at GM’s Fastlane blog. In honor of Lutz’s larger-than life presence on the American auto scene, we are republishing his official goodbye in its entirety. Thanks for the memories, Bob!]
As I mark my last day at General Motors today, I want to say a special thank you and farewell to the loyal readers of FastLane. This blog would not have been the success it has become without you, and I’m sure you’ll continue to read the many interesting posts about GM and its vehicles that will follow on these virtual pages.
Personally, the lack of a blue “Mark of Excellence” was the last thing I noticed about GM’s latest advertisement. Over at GMInsidenews.com, however, they picked up on it a little quicker. GM’s trademark “chiclet” has already been removed from all of its future vehicles, and Cadillac has publicly announced that it’s distancing itself from the GM name. In fact, post-bankruptcy, everyone at GM has said that the “GM brand” should take a backseat to Chevrolet, Buick, Cadillac and GMC. But will The General go as far as get rid of its little blue box altogether?
If there were a global brand that GM should have killed, it’s probably Daewoo. Outside the South Korean market, the name is so associated with cheap, crummy cars, that GM rebadges nearly all of Daewoo’s exports as Chevrolets. And even then, the “Chevwoo” brand is tainted by the fact that GM refuses to take ownership of its troubled South Korean operations, and enforce a one-badge policy in line with Chevy’s global branding. And it’s not like the Daewoo name is all that beloved in Korea either, as The General recently figured out that as many as 40 percent of all Korean Daewoo buyers were replacing their badges with Chevy bowties supplied by the aftermarket. In fact, GM was threatening to get rid of the Daewoo name altogether and replacing it with Chevrolet. But apparently because of fears of alienating Korean customers and “resistance from labor unions,” GM has decided to introduce the Chevrolet brand to Korea without killing off Daewoo. As GM’s presser puts it:
today’s announcement is about brand coexistence, not brand replacement
The Treasury may be standing by GM’s “payback” claims, but the Congress hasn’t exactly been looking for ways to do the auto industry any favors. In fact, a toxic brew of political fallout from the financial crisis, auto bailout, and Toyota recall scandal has seems to have inspired a backlash against the industry that came to a head this week in the US Senate. Legislation has been introduced that would prevent NHTSA officials from taking jobs with automakers for up to three years after they leave the agency, and yet more is being drafted which could require a vast array of standard safety equipment on all cars sold in the US and could even add a federal fee to new car sales. Adding insult to injury, a much-hoped for exception to dealer financing oversight in the new financial reform bill appears to have fallen victim to Senate negotiations. Did nobody tell the old guys that they’re investors in the auto industry? (Read More…)
GM’s decision to pay off the loan signaled the automaker did not face “extraordinary expenses,” and that Treasury approved the loan payoff.
“The fact that GM made the determination and repaid the remaining $4.7 billion to the U.S. government now is good news for the company, our investment and the American people,” said Herbert Allison, assistant Treasury secretary for financial stability.
Strictly speaking, GM’s claim to have paid back all US Government loans is correct. The only issue is that GM’s ad touting the payback makes no reference to the fact that it still owes the Treasury upwards of $40b. If that misleads folks, well, apparently the Treasury Department isn’t going to do anything about it. (Read More…)
Former EV-1 driver and “science guy” Bill Nye hams it up while promoting GM’s Volt Extended Range Electric Vehicle. And actually, according to a recent gm-volt.com interview with Bob Lutz, GM now prefers that you refer to the Volt as “an electric vehicle with range extension.” Huh? Sounds like they’re gonna need a science guy to break this one down…
At this point about 19 percent… We’ll finalize that, but I’m not interested in going down from that
And according to the Detroit Free Press, GM actually achieved that goal in December, logging a 21 percent share based on Autodata findings. Unfortunately, things have been slip-sliding ever since. In February, GM’s share fell to 18.1 percent, and last month it fell even further, to 17.6 percent.
CAFE got you down? Worried that it’s only a matter of time before the feds come for your V8? You can relax a little, as General Motors is announcing that it will spend nearly a billion dollars rolling out its next generation of small-block V8 engines. According to Automotive News [sub], GM is dropping $893m to upgrade or renovate engine plants in Tonawanda, NY; Bay City, MI; Bedford, IN; Defiance, OH; and St. Catharines, Ontario. These new plants will build GM’s next generation of all-aluminum V8 engines, which will use direct-injection and a new combustion system for improved efficiency.GM won’t say what vehicles these new V8s will be offered in, but expect this to signal the end of the road for the Northstar family of engines as well as replacing the outgoing small-blocks. And what of GM’s commitment to reducing emissions? According to The General’s presser, all of its future small-block V8s will be E85-capable, meaning they qualify for the CAFE ramp-up’s Flex Fuel Vehicle credit loophole. As such,
their fuel economy is determined using a special calculation procedure that results in those vehicles being assigned a higher fuel economy level than would otherwise occur.
Last week’s announcement that had Chrysler turned a Q1 profit and GM had “repaid” taxpayer loans brought a flurry of political posturing about the success or lack thereof of the auto bailout. With Republicans laying into the auto bailout from several angles, President Obama dedicated his weekly address to a defense of industry assistance. Obama still frames the bailout as an unpleasant necessity, but argues that last week’s news means the chances that taxpayers will recoup their “investment” are improving. And apparently the Treasury agrees. According to the Detroit News, Treasury has revised its estimate of auto bailout losses (not counting GMAC) downwards, from $30.6b to $28b. Progress, sure, but hardly a sign that taxpayers can expect full payback from its state-owned automakers.
Automotive News [sub] reports that 19 rejected Canadian GM dealers have been given the green light to sue GM as a class, rather than go through the arbitration process that is being used to resolve dealer cull disputes in the US. The dealers are suing GM for breach of their dealer agreements, and for failing to provide compensation beyond wind-down costs. They argue that the arbitration process would be expensive for dealers, non-transparent to the taxpayers who funded GM’s reorganization, and would put GM at an unfair advantage.
For 90 years, the ad agency Campbell-Ewald has been Chevrolet’s go-to source for all-American ad messages, including the “See the USA in your Chevrolet,” “Heartbeat of America,” “Like A Rock” and “American Revolution” campaigns. But despite a track record of household-name campaigns, trouble has been brewing between GM and C-E for months now. In December, GM announced that C-E would focus on developing Silverado pickup ads for the Winter Olympic Games, while car and crossover advertising would migrate over to the French agency Publicis. Today, AdWeek reports that Chevy is terminating its nearly century-old relationship with Campbell-Ewald, and will move its entire Chevrolet business to Publicis. So what does this mean for Chevy’s advertising? (Read More…)
While the White House and most of the media spent the last two days parroting GM’s claim that it “paid back” taxpayers, Senator Chuck Grassley was busy writing a letter to the Secretary of the Treasury [letter available in PDF here]. The three-page note opens:
Dear Secretary Geithner:
General Motors (GM) yesterday announced that it repaid its TARP loans. I am concerned, however, that this announcement is not what it seems. In fact, it appears to be
nothing more than an elaborate TARP money shuffle.
No surprises there: TTAC has been all over this rusefor months now. Grassley does sum the situation up nicely, stating that “A debt-for-equity swap is not a repayment,” but the most interesting part of his letter is his theory for why GM and the Administration approved the tax-money reshuffle. Thus far, we’ve assumed that PR was the driving concern in this transparent deception. According to Grassley though, there may be another reason…
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