As part of its eleventh-hour decision to hold onto its Opel subsidiary, GM has made a 200m euro ($300 million) payment on its German “bridge loan” reports the WSJ. GM Europe Chief Financial Officer Enrico Digirolamo announced that the nationalized automaker will repay the remaining 400m euros ($600 million) by the end of the month. The German government greeted the news with something roughly akin to a Gallic shrug. “If General Motors and its subsidiary are in the position to restructure through its own strength and financing, that’s good news,” German Ec0nomy Ministry spokesman Felix Probst opined. Translation: we’ll take it. Which is just as well, given that GM’s Chairman of the Board returned the money with some seriously sarcasm attached. “I think we won’t be needing money from your government for Opel,” Edward Whitacre said, according to Merkur newspaper. “If Mrs. Merkel declines help, we will pay for it ourselves. Maybe this make will your chancellor happy.” Yes, well, meanwhile, GM’s European operatives had the begging bowl at the ready. “The restructuring of Opel for long-term sustainability requires involvement and financial support from all stakeholders, including employees and governments. We remain in discussions with governments to engage our plan.”
Posts By: Robert Farago
You know how terrorism experts talk about increased “internet chatter” as foretelling some kind of attack? On Monday, GM will release its post-C11 financial results which, thanks to dubious accounting, could very well mean nothing. Even so, I’m getting the feeling that there’s some bad news a brewin’, ’cause the MSM is kissing some major GM butt today. First, the Freep shows GM’s Chairman of the Board the love that dare not grant it an interview. Now the Times’ Bill Vlasic, late of the Detroit News, shows up with a piece that supposedly reveals the depth and breadth of GM’s much ballyhooed “cultural change.” Mea culpa comes in the form of “After bankruptcy, G.M. Struggles to Shed a Legacy of Bureaucracy.” While I’m a firm believer that cultural change starts at the top—such as, I dunno, firing the ancien regime that led to GM’s nationalization—I’m all ears, Bill. Where’s the evidence that la plus ca change, la plus ce n’est pas la même chose?
In four day’s time, my byline will appear on this website for the last time. During the previous nine-and-a-half years, I’ve watched the mainstream automotive press slowly evolve from paid cheerleader to . . . nope that’s it. No progress there. Despite having written literally thousands of diatribes against the media’s willful ignorance on the auto industry, I’m still galled that people who call themselves professional journalists have such little moral fiber and testicular fortitude. Only more so, now that GM and Chrysler’s endless turnaround promises have been revealed as a combination of epic self-delusion, outright lying and near-as-dammit criminal conduct (e.g. we never got the bottom of that SEC accounting case). This morning’s Detroit Free Press continues the tradition. “GM Chairman Ed Whitacre clear he’s in driver’s seat” is the worst kind of non-journalism—the kind that enables the rape of the American taxpayer by a bunch of egocentric incompetents.
Automotive News [sub] reports that President Obama’s Pay Czar has done an about face. Kenneth Feinberg pledged to remove the $500,000 salary cap for NEW executives hired for TARP-recipients—if he’s convinced that a rule-busting pay boost would help the bailout queens return U.S. taxpayer’s money. Feinberg’s climb-down comes just two days after New GM’s federally-appointed Chairman of the Board said that Uncle Sam’s pay caps could be, indeed should be, “modified.” Of course, Ed Whitacre didn’t make his suggestion directly. Nor did Feinberg reveal the locus of his “come to Jesus with cash” moment. “[Feinberg] said the automotive firms did not appeal his rulings. But he said he would be open to requests to hire in new executives at competitive pay. ‘If General Motors or any other company wants to bring someone in laterally — laterally — and competitive pay packages require that lateral hires get certain competitive pay, what have you, we’re perfectly willing to examine that.'” So the new rule: GM can hire someone for more than $500,000 in cash per year if that person was already making $500,000 per year doing the same job, only better (one would hope). Which would exclude, uh, no one. And create mucho resentment at that special place where RenCen’s express elevators ascend to glory. More Feinbergian 180 after the jump, and a mystery to be solved . . .
Sex sells. Or does it? I’ve long argued that sex actually gets in the way of selling cars. Who can think about cars when they’re thinking about sex? Sure, the blog posts on The Babes of SEMEN—I mean SEMA get eight billion hits. But so what? Does a pretty face and a pneumatic chest do anything to stimulate people to buy the trash and treasure (mostly trash) on display at a show or available (God help us) via the web? The example here is a perfect example of why you catch more flies with honey than vinegar. But as far as I know, the only reason to catch flies is to kill them. Or at least trap them on a sticky stuff until they die. Hey, come to think of it, maybe sexual come-ons (so to speak) aren’t such a bad idea . . .
Times are tough. Margins are tight. Carmakers are looking for savings anywhere they can. As mechanical work performed by a dealer under a manufacturer’s warranty comes straight off the automaker’s bottom line, it’s not all that surprisingly that we’re getting reports that certain manufacturers (cough Chrysler cough) are dragging their heels on paying for warranty work. In specific, we’re hearing that owners of Cummins diesel-powered Rams are having to stump-up for the cost of engine repairs, as the mothership blames “issues” on driver negligence, poor operating conditions and the knock-out punch “contaminated fuel.” Are you having any trouble getting warranty work on your vehicle(s)?
Celebritycarsblog.com commentator sunbeam shows that the first cut isn’t always the deepest: “Cadillacs are for old people, or in the this case, maybe just people that are old news.” Ouch.
When GM CEO Fritz Henderson promised Congress he would run the nationalized automaker with complete transparency, we knew he was full of shit. How could anyone expect New GM to do anything but lie, misdirect, prevaricate and obfuscate when the same Bozos that ran it into the ground were still large and in charge? Which GM dealers are canned? Which GM dealers have been resurrected? Why? Who is the GM executive (other than Fritz) who earns more than $500,000 per year—that the company refuses to name? What are the internal targets that GM says it’s meeting? Why did the company overestimate sales of some of its key models in its November press release? Why did Fritz and CFO Ray Young promise a 2010 GM IPO without the Chairman’s approval? And so on. To that list, add this from the AP: “But GM postponed the Cruze’s April build date about three months, said Mark Reuss, GM’s vice president of global vehicle engineering. The company, he said, wasn’t happy with the Cruze’s performance, especially with the six-automatic transmission. ‘No one was thrilled with where it shifted, how it shifted.'” Well that’s the first I’ve heard of that. And while it’s nice that GM is putting our money where it’s mouth is in its desire to ensure the Cruze’s “flawless launch,” what the hell happened? And why wasn’t anyone fired for it? Oh right, GM.
In tune with the times, automakers are making their vehicles easier to recycle. But is this effort making the vehicles less durable? Look at the designs Toyota put into the Prius to make it easy to dismantle for recycling (to comply with the Japanese recyclability laws). Wiring connections that come loose when you pull on them? Soundproofing held in place with a few “ultrasonic spot welds” instead of glue? Reading lights secured with bent metal clips instead of screws? Instrument panels made so they can be pulled out easily? With design features like this you have to wonder about the vehicles’ durability and wonder what other manufactures are doing—-especially when you combine “easy to disassemble” with the beancounters’ mantra of “cheap to build.”
A US District Judge has ruled that South Carolina’s proposed “I Believe” license plate (modeled on the already-banned Florida model, above) violates the First Amendment’s establishment clause.
GM’s government-appointed Chairman of the Board was out and about last night, speechifying at Texas Lutheran University. Ed Whitacre used the occasion to plea for the “modification” of Pay Czar Kenneth’s Feinberg’s pay caps. To recap the caps, the nationalized automaker’s top 25 executives took a 31 percent hair cut since joining the federal payroll. Aside from CEO Fritz “Opel Eyes” Henderson, that is, who had his cash compensation trimmed by just 25 percent (from $1.26 million to a paltry $950,000). Leaving only one other unnamed GM executive—cough, transparency, cough—who will “earn” more than $500,000 cash money for 2009. ‘Cause $500,000’s the new limit. And Ed’s not happy about that. “To find top-level people where you need them, that’s a more difficult thing to do at that salary level,” Whitacre said. “I don’t think [the caps] will be lifted, but hopefully they’ll be modified.” Now there’s a man who knows the value of politics. As for the value of GM stock, same deal. Or, in this case, no deal.