In a conversation with The WSJ [sub]’s Paul Ingrassia, former Car Czar Steve “Chooch” Rattner did some “back-of-the-envelope calculation” to show why he believes the US taxpayers will see their $50b “investment” in GM recouped when The General goes public sometime in the next year.

Here’s how Rattner gets to his latest calculation: Bonds of GM’s bankruptcy estate – known as Motors Liquidation – are currently trading around 30 cents on the dollar, according to Thomson Reuters. Those bondholders were owed $27 billion.

As part of GM’s restructuring, those bondholders were promised a 10% stake in GM when it goes public. In very rough calculations, those bonds are currently valued at about $9 billion (because they currently trade at around 30 cents and were originally worth $27 billion).

Assuming that $9 billion represented 10% of GM if it went public now that would imply GM had a value of around $90 billion. The taxpayer’s stake: 60% of that $90 billion, or $54 billion — Rattner’s magic number.

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In a recent Fastlane livechat, GM’s North American boss Mark Reuss revealed that:

Chevrolet re vamp in ads is well under way with Susan Docherty–you will like it a lot–shows the car, and uses “excellence for everyone”….you will really like it.

When asked if he was saying that “Excellence For Everyone” would be the new Chevrolet tagline, Reuss replied in the negative. Which makes it… a pickup line? Just a line? With “May The Best Car Win” having failed to make much headway, and “American Revolution” a pre-bankruptcy artifact, it wouldn’t be surprising to see this “Excellence for Everyone” briefly become Chevy’s main tagline. If only to give Reuss and Whitacre an excuse to fire Docherty when the campaign collapses under the weight of its own vacuity.

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As an American citizen, it is tough on my part to pay tax dollars to an entity that can turn around and use those tax dollars to get my fellow American citizens to not do business with me. The government owns 60% of General Motors, and these American tax dollars are funding business activity for one company, with the express goal of negatively impacting another company

Paul Atkinson, President of Toyota’s National Dealer Council, manages to capture the central problem with government intervention in industry without resorting to the hyperbole that so often accompanies such lines of criticism [via Radio WAOI]. Examples?

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In 1989, Toyota launched a new luxury brand that would go on to largely replace Cadillac as a vernacular term for excellence in luxury. Known as Lexus, this brand has spent the last 20 years making headway in the US market without ever publicly associating itself with its parent brand. Could this strategy have contained a lesson for the brand managers at GM who have spent the same 20 years fretting (or not) about declining Cadillac sales? Apparently so, as BusinessWeek reports that Cadillac is distancing itself from the corporate mothership in hopes of improving Cadillac’s aspirational appeal. And yet, strangely, it’s still not clear that the lesson has actually been learned.

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Edmunds AutoObserver Michelle Krebs, commenting on the termination and replacement of Cadillac’s leadership, concluded, “If GM is going to change and is going to succeed, it must change people.” Paraphrasing Eistein, she added that “Doing the same thing over and over again with the same people in the same positions and expecting a different result is…insane.”

Michelle Krebs is far from the first to suggest that, to survive, a struggling company must replace the executives that oversaw its decline. And she won’t be the last. But this is a superficial solution that, without additional measures, will surely fail.

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GM’s recent reinstatement of 661 culled dealers has put pressure back on Chrysler to come to arrangement with the dealers it shed during last year’s bankruptcy and bailout. Rep. Chris VanHollen, the sixth ranking Democrat in the House or Representatives, tells Automotive News [sub] that with GM buckling to dealer pressure, the time has come for Chrysler to follow suit. “There’s no quicker or easier way to build this network than to reinstate its terminated car dealerships,” says VanHollen, who drafted much of congress’s dealer arbitration legislation. The Committee to Restore Dealer Rights contacted Chrysler CEO Sergio Marchionne “to discuss the reinstatement of the rejected dealers who had their franchises so abruptly taken and were unfairly terminated.” The response?

We believe that all communications concerning the subject matter of the arbitration should be between counsel and request that your clients follow this procedure in the future. Please ask them not to send such communications to Mr. Marchionne or any other Chrysler personnel.

Oh snap! Chrysler isn’t going down without a fight… even if that means taking on the representatives who have oversight of the government’s eight percent stake in the automaker.
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The Shreveport Times reports that GM will restart production of the HUMMER H3 and H3T starting April 12, for a batch build of 849 units. An unidentified “fleet buyer” apparently needs a grip of the baby-HUMMERs, despite the fact that the brand is being wound down after a deal to sell it to Sichuan Tengzhong fell through. Production at Shreveport had been shut down until the deal went through, and unless one of the two rumored post-Tengzhong offers materializes (and we’re not holding our breath), this could be the last production run for the brand. In other “rumors of HUMMER’s survival have been greatly exaggerated” news, the German tuner shop CFC is just now announcing an all-chrome HUMMER model [via bornrich.com]. What is this, 2004?

We reported yesterday that GM’s recent dealer cull flip-flop was motivated by Chariman/CEO Ed Whitacre’s desire for increased sales volume. Though that may have been the main reason GM took over 600 dealers back into the fold, there was clearly another, more sinister reason for the move: making an example of dissident, activist dealers. Automotive News [sub] reports that GM has contacted all 661 reinstated dealers, and believe it or not, none of the 7 dealer members of the Committee to Restore Dealer Rights have been contacted. Founding member Tammy Darvish tells AN [sub],

The only thing I’m confident of is that I’m sure it’s not a coincidence

So, how do you spin the bankruptcy of the world’s largest automaker? Former GM spinmeister Steve Harris recently took an hour to help prepare future generations for the day when they too will have to soft-pedal the inevitable collapse of their very own lumbering giant employer. Bonus revelation:

[the presidential task force was] very interested in what we were doing from a communications standpoint, but I can not say that they really exerted much control at all. Once or twice they said “we would really like it if you add this message or this communication into your plans,” but it was really minimal. It was not overbearing at all.

Details?

With Russian financiers offering up to $100m to back the new Saab-Spyker project, it’s not surprising that the internet is awash with glad tidings of new cars from the new Dutch-Swedish venture. On the Saab side, CEO Victor Muller and company are teasing analysts with news that Saab is “already working on plans” for a new compact car, tentatively named 9-1. Having quoted Muller as saying the 9-1 had a “better than average chance”of being built (whatever that means), Automotive News Europe [sub] filled in the blanks:

[The 9-1] would be needed to help achieve Saab’s stated goal of closing the gap with BMW and Audi. Saab debuted a concept for an entry-premium car at the 2008 Geneva auto show. ANE sister publication AutoWeek named the 9-X BioHybrid the best concept at that year’s event.

One of the arguments in favor of GM Chairman/CEO Ed Whitacre’s use of AT&T corporate jets is that “given the role he plays and the decisions that need to be made worldwide, you want this guy to be working 24/7.” But like so many of the “answers” we’re given about GM’s turnaround, this merely raises another question: besides learning such arcane auto-industry jargon as the term “segment,” what exactly is Ed Whitacre doing at GM? Thus far, the answer seems to be “firing executives,” as the last several months have seen a number of executive reshufflings at the RenCen. And though GM’s bailout left a number of GM lifers in positions they had mishandled prior to bankruptcy, the recent firings and re-orgs aren’t simply motivated by the desire to revitalize GM’s corporate culture. A look inside Whitacre’s reign of terror shows a more traditional GM impulse at play: the desire for quick spikes in volume.
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Recently-reassigned Cadillac boss Bryan Nesbitt isn’t the only GM exec paying the price for weak Cadillac sales, as Automotive News [sub] reports that GM has terminated three other Caddy executives.

Cadillac’s Steve Shannon and John Howell were dismissed Monday, said eight sources familiar with the moves. Jay Spenchian, an executive director who worked on Cadillac and other brands, was also let go, the sources said.

China will most likely announce strong sales numbers for February. Not as strong as in January, when sales of all motor vehicles shot up by 126 percent, but still strong. How do I know this without the official numbers? By looking at GM. GM has always been a good leading indicator for China’s sales. (Read More…)

Toyota and GM have both announced 0% financing on 2010 models, reports Automotive News [sub]. GM will offer the 60-month financing deal on 55 percent of its new models, while Toyota will offer the same terms on its Camry, Corolla, Matrix, Avalon, Yaris, Highlander, RAV4 and Tundra (not including hybrids). According to GM’s Susan Docherty, Toyota’s woes had nothing to do with the decision to offer finance deals, telling AN [sub]:

Obviously, with our hot launch products, we don’t need to put 0 percent financing for 60 months on that. That 0-for-60 will be primarily on products like our pickups. That’s completely in line with what our marketing strategy is. We’re going headstrong into truck month for both Chevrolet and GMC, which is a traditional play that we have normally done during March.

And no wonder: GM’s truck sales were flat in February. According to Automotive News [sub], Toyota will also offer several lease and dealer cash deals which vary from region to region.

GM has announced its new North American organizational shuffle [full release available here], and have included the following slides to help explain some of the changes. The clear winner: President of NA operations, Mark Reuss, who had this to say:

It’s become extremely clear to me since taking this role that there is a better way to structure this organization. The premise of the structure is simple — a clearer marketing focus to sell more vehicles, and freeing our sales and service experts to focus on customers and dealers. In order to be successful in North America, we need the right mix of product, people and structure. We’ve worked with a small group of executives to align this model and appoint the best candidates for each job.

Notice how he doesn’t call the new structure a simplification. As the following slides show, there’s nothing simple about the structure changes. In fact, the only thing that’s certain about this latest GM reshuffle is that wrestling with GM’s bureaucracy still takes up as much time for top managers as actually working on products, planning, outreach and other core business activities.

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