GM’s New CEO Ed Whitacre made his first appearance at the Fastlane blog in a webchat that represented the first access GM has given reporters to Whitacre. Needless to say, journalists do not like sharing their access with the general public, and they let GM know. Thedetroitbureau’s Paul Eisenstein asked “like many of my colleagues, I wonder when you will address us in the media directly, even if by telephone conference. To be honest, a webchat is quite a bit different and doesn’t carry the veracity of seeing or at least hearing you directly.” To which Whitacre responded:
Dear Paul,
I’ve been on the job for four days. I’ll do it as soon as I feel comfortable and have enough clear air and time. I promise we’ll talk soon.
No worries though. Whitacre didn’t actually say anything newsworthy.
From here on out, GM’s success in the US market comes down to two people: Susan Docherty and Mark Reuss. The two fielded their first joint sales conference call last week, and it was clear that they were still settling into their roles. Listen to the whole hour of awkwardness here, or, for a quick summary check out the final questions of the session (from the WSJ’s John Stoll), and the prickly, defensive answers from Docherty and Reuss. When Stoll asks how Reuss and Docherty expect to change a culture when they’re a product of that culture, the tension is palpable. Then, when Stoll accuses Docherty’s sales organization of buying market share with incentives, the pair’s non-answer is “I guess that’s what you feel.” Meanwhile, Edmunds reports that GM has by far the highest incentives of any automaker, with a True Cost of Incentives of $4,270, over a thousand dollars more than number two Chrysler. Good thing we’re tackling those problems head-on then.
As soon as GM and Chrysler agreed to review their dealer cull decisions, the culled dealers in question began complaining that the review would not improve their situations. According to the aggrieved dealers, the new review would be based on the same allegedly flawed data as the initial cull, meaning nothing would be changed. By GM’s own admission, only 39-51 of the over 1,000 dealers cut would even stand a chance at reinstatement. Now, Automotive News [sub] reports that a new measure has passed the House of Representatives which would allow dealers to “present any kind of relevant information during the arbitration.” The measure comes in the form of an amendment to the House Financial Services bill, which is headed to a conference committee in which House and Senate leaders must arrive at a compromise in order to send the bill to President Obama.
Rumors of a VW-Suzuki tie-up were first floated on these pages by Bertel Schmitt, who reported that VW might be after a ten percent stake in the Japanese firm last summer. And with news last week that GM was buying out Suzuki’s stake in CAMI, the momentum seemed to be building. Well, Reuters reports that Volkswagen could announce that it’s taking a 20 percent stake in Suzuki, a deal valued at $2.8b, as soon as this week. Another source tells Reuters that the VW stake could become a 33 percent plus controlling interest in the future. (Read More…)
“A Flush GM to Lavish Cash On New Vehicles,” goes the NY Times headline, forshadowing the kind of profligacy that only happens when you have $42.6 billion of taxpayer money burning a hole in the corporate pockets. From the next generation of truck and SUV platforms to the Cadillac Alpha (known in-house as “BMW Fighter”), that money is going towards products…. at least it is when it’s not going to faltering overseas operations. And in most cases that’s a good thing. For example, Mark Reuss explains “ with the BMW fighter, the steering in that vehicle is going to be absolutely critical. In the past we would have gone to the lowest cost source, but not anymore.” Well, good on ya, mate. When it comes to the Volt though, the money doesn’t seem like it’s being quite as well spent.
It’s pretty much as clear as it can possibly be that China’s BAIC will cart off the used tooling of the 9-5 and 9-3 models, and possibly others to Beijing, and then that’s the end of Trollhättan and Saab, Reuters reports.
Other assets of the brand, including its headquarters will be liquidated, more than 3,000 Saab jobs in Sweden will go bye-bye. The Saab car brand will be retired. (Read More…)
“Susan is more than capable of doing the job,” said Mark LaNeve, a mentor of Ms. Docherty’s who left GM in October and is now CMO at Allstate. The position “is a very big job and it’s a lot easier when the market is good than when the market is bad.”
From AdAge‘s paean to GM Sales and Marketing Diva Susan Docherty. Of course, what AdAge fails to mention is that LaNeve was ousted after overseeing years of declining sales, a detail that casts his judgment on the topic severely into question. No worries though. AdAge enthuses that Docherty is
described by insiders and former co-workers as a smart, hard-charging and pragmatic leader who will push responsibility down the food chain and vigorously defend ad managers who work for her — while being a champion of creative and holding them accountable for their decisions.
Uh huh. Too bad the primary evidence for this is the fact that Docherty “vigorously defended” the Buick ad seen above from none other than GM’s Bob Lutz. A former colleague of Docherty’s describes that bold stand as “good for the creative side,” and GM CEO Ed Whitacre must agree, seeing as he recently stripped Bob Lutz of his marketing title and gave it to Docherty. When MaxBob sounds like the only sane person in the building and ousted deadwood execs are endorsing their replacements, you know it’s time to get scared.
In my editorial on GM’s plant to take on the Indian market in partnership with SAIC, I wrote that Maruti Suzuki’s monstrous market share indicated the possibilities for GM. Well, the Indian market leader isn’t going to just sit on that lead. In 2007, Osamu Suzuki said that his firm’s Indian passenger car market share would never drop below 50 percent, an assertion that took two years to prove untrue. The WSJ reports that although the overall Indian market will probably grow 16 percent this year, Maruti’s share of that market has fallen over the last year from 45 percent to about 40 percent (with passenger car share down from 55 percent to 48 percent).
Bård Eker, the Norwegian partner in Koenigsegg Automotive, and Koenigsegg Group, appeared as one of the guests on Friday night’s regular Swedish/Norwegian talk show “Skavland” this weekend (the following, translated conversation starts at 27:09). Mr Skavland, first talking a bit about Eker’s feelings about the broken deal, and how he felt visiting Trollhättan talking to Saab employees after the deal broke, he then asked Eker: “Is there a tiny chance you’ll try again? Saab isn’t sold yet…!” Eker smiles and answers “…we’ll see. Maybe!” laughing, shrugging his shoulders, audience cheering. Skavland: “how would you wanna do it?” Eker: “I don’t know…Seriously – we haven’t given it much thought. We’ll see…perhaps there’s a new opportunity. Maybe someone’ll give us a phonecall” Skavland: “So it’s not definitive that you’re out of the game?” Eker – laughing, glancing at his watch – “..err..how long is this show?” Skavland says: “So, you’ll still want a Saab?”, Eker: “yeah, sure” Skavland: “Alright….?” and shifts to another subject. All the while Eker has a cunning smile on his face.
Courtesy of GM-Volt.com, here’s GM’s first post-bankruptcy Volt jingle! And arguably a slight improvement over last May’s jingle. But if you think Big Ed Whitacre will stop all the song-and-dance frivolity, think again. “He will not try to run the programs,” Bob Lutz sneers at GM-Volt. “He knows almost nothing about the business. Nobody will diminish our focus on electrification.” As long as Whitacre kills the Volt-related musical development program, we’ll be happy.
News that GM is selling a control-shifting single share in GM Shanghai to its Chinese partner SAIC was the toads-from-heaven flourish at the end of an epic week for the RenCen. The day after the last of GM’s lifer CEOs left the building, Opel’s CFO followed suit. One management re-organization and a rough LA Auto Show later, came this symbolic surrender of GM’s largest market for a measly $85m. Accompanied by news that The General would buy out Suzuki’s stake in CAMI for an estimated $46.5m, no less. Oh yeah, and something about India. Freshly-minted CEO and notorious rattlesnake killer Ed Whitacre isn’t about be accused of not trying to shake things up. The only question is where will everything land?
GM’s new European Viceroy, Nick Reilly, surprised and astonished the participants of a Saturday conference call by saying that German aid, or no German aid to Opel, “it won’t make any difference to our restructuring plan, so it will not lead to more layoffs in Germany or less layoffs.”
Now what’s that all about? Wasn’t the line before “you either pay us, or you pay unemployment benefits, anyway, you’ll pay?” (Read More…)
After yesterday’s press conference in which he had announced the ties with a stronger SAIC in China and India, Reilly spoke to 9,000 employees at Opel’s Rüsselsheim headquarters, Reuters reports.
The good news: 548 engineering jobs at the engineering center, formerly slated to be eliminated, will stay. The bad news? (Read More…)
Fresh details on GM’s Asian wranglings are coming in, and it seems that SAIC paid The General a mere $85m for the one percent needed to control the joint venture. GM’s Nick Reilly tells the New York Times:
the 51 percent stake would give S.A.I.C. the right to approve the venture’s budget, future plans and senior management. But the venture has a cooperative spirit in which S.A.I.C. has already been able to do so… S.A.I.C. wanted to have a majority stake to consolidate the venture in its financial reporting
Which is about as credible as the conclusion that the Shanghai and India deals are going to provide GM International with a meaningful amount of cash with which to rescue its European and Korean divisions. As it turns out, the Indian deal isn’t going to translate into free cash for GM. GM and SAIC will set up a joint Hong Kong-based investment company, which GM will give its Indian operations and SAIC will fund with $300-$530m, bringing its overall value to $650m.
The AP reports that GM’s Ed Whitacre is reshuffling executives, turning an already-nervous RenCen on its head. Whitacre has elevated global engineering boss Mark Reuss to take charge of US operations, not an entirely surprising decision as the former Holden boss’s star had clearly been rising. Considerably more shocking was Whitacre’s decision to strip Bob Lutz of his marketing position and roll that responsibility into Susan Docherty’s Sales position. But don’t cry for the man called Maximum: Lutz will remain vice-chairman, will become “an adviser on global product development,” personally advising Whitacre on the auto industry. Nick Reilley, who has been GM’s international fix-it man, has been appointed President of GM Europe, while Diana Tremblay has been named vice president, Manufacturing and Labor Relations. “I want to give people more responsibility and authority deeper in the organization and then hold them accountable,” Whitacre said in GM’s statement, found here.
GM’s New CEO Ed Whitacre made his first appearance at the Fastlane blog in a webchat that represented the first access GM has given reporters to Whitacre. Needless to say, journalists do not like sharing their access with the general public, and they let GM know. Thedetroitbureau’s Paul Eisenstein asked “like many of my colleagues, I wonder when you will address us in the media directly, even if by telephone conference. To be honest, a webchat is quite a bit different and doesn’t carry the veracity of seeing or at least hearing you directly.” To which Whitacre responded:
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