The Truth About Cars » Inside The Big Three http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 31 Jul 2015 21:47:19 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars » Inside The Big Three http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/inside-the-big-3/ Car Building in Ontario Could Die, and They Probably Can’t Save It http://www.thetruthaboutcars.com/2015/07/car-building-ontario-die-probably-cant-save/ http://www.thetruthaboutcars.com/2015/07/car-building-ontario-die-probably-cant-save/#comments Mon, 27 Jul 2015 21:00:15 +0000 http://www.thetruthaboutcars.com/?p=1125985 Ontario’s debt is swelling and as home to eight manufacturing plants — the largest complex in North America — automakers may have a tough time keeping plants open in Canada’s most-populous province. According to a story by the Financial Post, Ontario is moving forward with an ambitious plan to revamp roads and mass transit systems despite its debt being downgraded […]

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Chrysler Brampton Assembly Plant

Ontario’s debt is swelling and as home to eight manufacturing plants — the largest complex in North America — automakers may have a tough time keeping plants open in Canada’s most-populous province.

According to a story by the Financial Post, Ontario is moving forward with an ambitious plan to revamp roads and mass transit systems despite its debt being downgraded by Standard & Poor’s bond index. The broad public spending plan also extends to other sectors, despite high unemployment numbers and slumping manufacturing jobs.

Automakers such as Fiat Chrysler Automobiles have called on the provincial government to cut back on public programs and reduce costs on utilities in an effort to keep car building in the province profitable. This year, Chevrolet will shift production of its Camaro to Michigan. On the whole, Oshawa GM production has a dark cloud lingering overhead until the company decides what to do with the facility in 2016.

Ontario’s debt is twice that of California’s with only half the population, the Financial Post reported.

Last month the province reported that 5,200 manufacturing jobs left the region, which prompted local business leaders to sign a petition asking the government to reconsider its proposed pension plan that FCA CEO Sergio Marchionne said this month could hamper growth.

“We’re fully aware of the fact that this proposal on pensions and cap and trade and all this stuff … these are all things that add cost to the running of operations, they don’t come for free,” Marchionne said, according to the Toronto Sun.

Already, automakers such as Volvo and Land Rover have turned down Ontario in favor of operations in the United States and it’s unclear if swelling debt and rising costs of operation will cost the province more jobs in the future.

Other automakers that already have facilities in Ontario are making changes. Honda and Ford are both positioning their plants to manufacture vehicles for export markets. Toyota, on the other hand, will end Corolla production in Ontario in favor of Mexico. The company stated it will “switch from producing Corollas to mid-sized, higher-value vehicles” at their Canadian plant. The replacement product has not yet been announced.

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Fiat Chrysler May Have to Take Back 1.5M Defective Jeeps, Rams http://www.thetruthaboutcars.com/2015/07/fiat-chrysler-may-take-back-1-5m-defective-jeeps-rams/ http://www.thetruthaboutcars.com/2015/07/fiat-chrysler-may-take-back-1-5m-defective-jeeps-rams/#comments Mon, 27 Jul 2015 17:00:21 +0000 http://www.thetruthaboutcars.com/?p=1125729 In an order detailing the largest civil penalty for an automaker so far, the National Highway Traffic Safety Administration said Monday that Fiat Chrysler Automobiles could have to buy back 500,000 defective trucks and accept trade-in above market value for 1 million defective Jeeps . The automaker’s record $105 million fine includes a $70 million […]

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FCA US LLC HQ WTFBBQ

In an order detailing the largest civil penalty for an automaker so far, the National Highway Traffic Safety Administration said Monday that Fiat Chrysler Automobiles could have to buy back 500,000 defective trucks and accept trade-in above market value for 1 million defective Jeeps .

The automaker’s record $105 million fine includes a $70 million penalty, $20 million set aside for meeting safety standards dictated by the federal bureau and an additional $15 million in penalties if an independent monitor discovers further safety violations.

The record ruling comes after the agency said FCA botched recalls of more than 11 million vehicles for wide ranging issues, including Jeep models with rear gas tanks that could catch fire in rear collisions. The issue has been linked to more than 50 deaths. 

NHTSA Administrator Mark Rosekind scolded the automaker in a statement Monday announcing the fine.

“Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk,” he said. “This action will provide relief to owners of defective vehicles, will help improve recall performance throughout the auto industry, and gives Fiat Chrysler the opportunity to embrace a proactive safety culture.”

According to a statement by the automaker, Jeep owners who haven’t yet complied with their recall could get a $100 gift card to bring their vehicle into a dealer. Owners of defective Jeep models would also be eligible to trade in their vehicle for $1,000 above fair market value.

In addition to the Jeep fix, FCA will attempt to purchase or fix for free Ram trucks or Chrysler SUVs with a suspension defect that could cause the car to lose control. FCA could resell those fixed cars.

The automaker will have to submit to independent monitoring of its recalls for the next three years, with NHTSA being able to extend that agreement further for an additional year.

Last week, FCA announced it would be recalling 1.4 million cars for a security vulnerability that could allow hackers to remotely take control of a vehicle.

Read the ruling here.

The vehicles that may be eligible for repurchase are:

• 2009-2012 Ram 1500s

• 2008-2012 Ram 1500 Mega Cab 4×4, Ram 2500 4×4, 3500 4×4, 4500 4×4, 4500 4×4

• 2009 Chrysler Aspen and Dodge Durango

• 2009-2011 Dodge Dakota

The vehicles that may be eligible for a $100 gift card for dealer inspection or $1,000 over market value for trade-in are:

• 1993-2004 Jeep Grand Cherokee

• 2002-2007 Jeep Liberty

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Mid-size XT5, Full-size CT6 Highlight 2016 for Cadillac http://www.thetruthaboutcars.com/2015/07/mid-size-xt5-full-size-ct6-highlight-2016-for-cadillac/ http://www.thetruthaboutcars.com/2015/07/mid-size-xt5-full-size-ct6-highlight-2016-for-cadillac/#comments Sat, 25 Jul 2015 15:00:25 +0000 http://www.thetruthaboutcars.com/?p=1125097 There will be big things for Cadillac next year, but they may not come in small packages, Automotive  News is speculating. In their series of what could be coming up for automakers, writer Mark Colias details a few models to be expected for Cadillac in the coming year. There may be not be a subcompact […]

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2016 Cadillac XT5

There will be big things for Cadillac next year, but they may not come in small packages, Automotive  News is speculating.

In their series of what could be coming up for automakers, writer Mark Colias details a few models to be expected for Cadillac in the coming year. There may be not be a subcompact crossover next year, but there could be refresh for the ATS, including a Vsport variant.

Next year for Cadillac could be marked by its more traditional entries with new names.

On top of the all-new XT5, which will serve as Cadillac’s mid-size crossover, the new CT6 will be the brand’s large sedan — but not its flagship.

Colias writes that Cadillac’s BMW 7-Series/Mercedes S-Class fighter will come toward the end of the decade and be called the CT7 (maybe?)

A small compact sedan and subcompact crossover aren’t expected until 2018, at the earliest. The ELR, Cadillac’s slow-selling plug-in hybrid may have life until 2018 despite sluggish sales.

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Instead of Mid-engined ‘Vette, Expect a New Malibu in 2016 http://www.thetruthaboutcars.com/2015/07/instead-mid-engined-vette-expect-new-malibu-2016/ http://www.thetruthaboutcars.com/2015/07/instead-mid-engined-vette-expect-new-malibu-2016/#comments Wed, 22 Jul 2015 22:00:13 +0000 http://www.thetruthaboutcars.com/?p=1123513 Next year for General Motors could be defined by a new lower, longer Spark, production starting on the Bolt and a convertible Camaro, according to Automotive News’ facts and factoids department. The automotive publication posted a speculative timeline of cars that may or may not be in GM’s future, including fuzzy details on a mid-engined Corvette that […]

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2016-Chevrolet-Malibu-007

Next year for General Motors could be defined by a new lower, longer Spark, production starting on the Bolt and a convertible Camaro, according to Automotive News’ facts and factoids department.

The automotive publication posted a speculative timeline of cars that may or may not be in GM’s future, including fuzzy details on a mid-engined Corvette that may or may not happen in or around the year 2020.

In case you’re wondering, we don’t know either.

The timeline includes tantalizing details that GMC may be looking at adapting the Chevrolet Trax — which could be called the “GMC Granite” — and that the Colorado/Canyon may finally get an off-road ZR2 edition next year.

The story also summarizes their earlier claim that GM will be shrinking the Equinox and offering a new, mid-size crossover based on the current Traverse. Cadillac wasn’t included in their analysis, but the automotive publication spelled the death for the Chevrolet SS. We can’t have nice things.

A redesigned Malibu will see the light of day next year, and the curtain may fall on the Spark EV.

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General Motors Investing $1.4B into Texas SUV Plant http://www.thetruthaboutcars.com/2015/07/general-motors-investing-1-4b-texas-suv-plant/ http://www.thetruthaboutcars.com/2015/07/general-motors-investing-1-4b-texas-suv-plant/#comments Wed, 15 Jul 2015 21:00:48 +0000 http://www.thetruthaboutcars.com/?p=1116713 General Motors announced Wednesday it would invest $1.4 billion into its Arlington Assembly Plant, which produces SUVs. The investment will create a new paint shop, body shop and “general assembly area upgrades” for the plant that produces Chevrolet Tahoes and Suburbans, GMC Yukons and Yukon XLs and Cadillac Escalades. Construction will take three years and plant […]

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GM Arlington Plant

General Motors announced Wednesday it would invest $1.4 billion into its Arlington Assembly Plant, which produces SUVs.

The investment will create a new paint shop, body shop and “general assembly area upgrades” for the plant that produces Chevrolet Tahoes and Suburbans, GMC Yukons and Yukon XLs and Cadillac Escalades.

Construction will take three years and plant operations won’t be impacted, GM said.

GM received tax incentives from Arlington for the plant expansion in April. According to minutes from the Arlington City Council, the plant will add 589 new jobs as a result of the expansion.

The announced $1.4 billion for the Arlington plant comes ahead of GM’s negotiations with the United Auto Workers, which will focus on pay raises for “second-tier” workers hired after the recession.

GM said it will invest $5.4 billion in U.S. manufacturing over the next three years. GM says it has identified $4.5 billion in improvements so far.

 

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FCA Awaits NHTSA’s Wrath After Recall Hearings http://www.thetruthaboutcars.com/2015/07/fca-awaits-nhtsas-wrath-recall-hearings/ http://www.thetruthaboutcars.com/2015/07/fca-awaits-nhtsas-wrath-recall-hearings/#comments Fri, 03 Jul 2015 17:00:48 +0000 http://www.thetruthaboutcars.com/?p=1107233 Yesterday, the National Highway Traffic Safety Administration took the unusual step of hauling a single automaker to the Capitol to scold Fiat Chrysler for delays in recalls and repairs. The hearing is ahead of anticipated fines NHTSA may deal later this month, possibly as high as $700 million. Attention was focused on Jeep Liberties and Grand […]

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1999 Grand Cherokee Launch-12

Yesterday, the National Highway Traffic Safety Administration took the unusual step of hauling a single automaker to the Capitol to scold Fiat Chrysler for delays in recalls and repairs. The hearing is ahead of anticipated fines NHTSA may deal later this month, possibly as high as $700 million.

Attention was focused on Jeep Liberties and Grand Cherokees with rear-mounted gas tanks that could leak fuel if struck in a high-speed rear collision and potentially catch fire. Also of importance is the rate at which Jeep notified its owners of the recall.

FCA’s Senior Vice President for Vehicle Safety and Regulatory Compliance Scott Kunselman said at the hearing that FCA “could have done better in carrying out the campaigns.”


Owners of Grand Cherokees and Liberty SUVs had trailer hitches installed on their cars that could protect in low- to moderate-speed impact collisions. Eric Mayne, a spokesman for FCA, said that NHTSA tested the trailer hitches and found them to perform similarly to their peers.

A Massachusetts father testified at the hearing, saying his 17-year-old son was killed when the Grand Cherokee he was driving was struck and ignited. The issue has been linked to more than 50 deaths.

A second recall was recently issued for faulty wiring that could disable airbags.

NHTSA “tentatively concluded” FCA didn’t address the recalls in time, or adequately. Despite issuing a recall in June 2013, NHTSA said only 23 percent of the cars had been fixed by the end of April. FCA said that figure is now around 33 percent.

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FCA Defects from Takata, Finds Solace with TRW for Airbag Inflators http://www.thetruthaboutcars.com/2015/06/fca-defects-from-takata-finds-solace-with-trw-for-airbag-inflators/ http://www.thetruthaboutcars.com/2015/06/fca-defects-from-takata-finds-solace-with-trw-for-airbag-inflators/#comments Tue, 23 Jun 2015 17:00:19 +0000 http://www.thetruthaboutcars.com/?p=1097793 FCA, looking a 4.1 million unit recall in the face thanks to defective Takata airbag inflators, will source replacements from a rival, ZF-owned TRW Automotive. The Chrysler/Dodge/Jeep/Ram parent will be the first company to refuse to toe the line. While the announcement has not yet been made official, The Detroit News obtained “copies of the written […]

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FCA US HQ

FCA, looking a 4.1 million unit recall in the face thanks to defective Takata airbag inflators, will source replacements from a rival, ZF-owned TRW Automotive.

The Chrysler/Dodge/Jeep/Ram parent will be the first company to refuse to toe the line.

While the announcement has not yet been made official, The Detroit News obtained “copies of the written testimony from the executives ahead of Tuesday’s hearing” before the Senate Commerce Committee.

Scott G. Kunselman, FCA U.S. senior vice president and head of vehicle safety and regulatory compliance, said in written testimony the company is “replacing all driver-side inflators involved in the recall with an alternate and permanent design provided by TRW,” effective June 8.

That does not mean FCA is leaving Takata full stop. The two companies are working together to improve passenger airbag inflators, says the report.

A total of eleven automakers have been affected by the recalls.

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Too Big To Fail, Too Confused To Operate: Analysis Of 619 Pages Of Cobalt Engineering Documents [w/ Full Text] http://www.thetruthaboutcars.com/2014/04/too-big-to-fail-too-confused-to-operate-analysis-of-619-pages-of-cobalt-engineering-documents-w-full-text/ http://www.thetruthaboutcars.com/2014/04/too-big-to-fail-too-confused-to-operate-analysis-of-619-pages-of-cobalt-engineering-documents-w-full-text/#comments Thu, 17 Apr 2014 14:00:20 +0000 http://www.thetruthaboutcars.com/?p=799138   The House Energy & Commerce Committee recently released the documents GM submitted for investigation, which includes emails and internal reports documenting GM’s response to reports of their early Chevrolet Cobalt and Saturn Ion models inadvertently shutting the car “off” while driving due to an ignition cylinder that was, simply, too easy to turn out […]

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The House Energy & Commerce Committee recently released the documents GM submitted for investigation, which includes emails and internal reports documenting GM’s response to reports of their early Chevrolet Cobalt and Saturn Ion models inadvertently shutting the car “off” while driving due to an ignition cylinder that was, simply, too easy to turn out of the “run” position; and in the case of several accidents, allowed the ignition cylinder to rotate out of the run condition before or during accidents, causing the airbags to not deploy when required.

The documents, totaling 619 pages (some with repeat info), reveal just how deep seated “old GM” was in their cost cutting ways (Driving down supplier costs to the point of sacrificing quality, admittedly poorly designed ignition cylinder, and removing internal quality control on the parts), and just how blind sided “new GM” was during their investigations. It also confirms how suspended engineers Ray DeGiorgio and Gary Altman were involved in the ignition switch response, and fuzzy problem solving. Full text and an analysis of key documents below.

We already know the basics of how this happened, but it’s still surprising just how ingrained GM was in putting the issue aside. The key issues are these:

  • GM became aware of the ignition issue in the 2001 preproduction Saturn Ion and the 2005 preproduction Chevrolet Cobalt.
  • Gary Altman initiated the report that lead to the insert, and Ray DeGiorgio consulted on the fix and argued against ignition switch changes.
  • Many different options were proposed, including suggestions from Delphi.
  • Cost played a major role in the decision to not recall the ignition switch early on.
  • The later key insert was the result, and was seen not as a fix, but as a “containment.”
  • GM also had very little oversight on parts from Delphi, only relying on Delphi’s incomplete testing.
  • GM’s engineers knowingly put the cars to market with a defective ignition switch.
  • This lead to ISB #05-02-35-007.
  • In 2006, DeGiorgio eventually signed off on design changes for Delphi, that included a stronger spring and plunger for the detent mechanism in the ignition cylinder, which provides a physical resistance between the different key positions.
  • When implemented in 2007, the new ignition cylinders cost less than a dollar per unit more than the original design; $400,000 to retool the production lines. These are the same changes that were deemed “not an acceptable business case” in 2005
  • As company, however, no one knew who signed off on the change until the Melton family lawsuit.
  • In court, DeGiorgio testified that he was unaware of changes to the ignition cylinder that would have effected the detents, only mentioning the key change..
  • Later investigations showed that the Cobalt had a substantial number of airbag warranty claims.
  • Higher level GM representatives broadsided by NHTSA’s investigations and disapproval of their slow reaction to other recent recalls.

First up, Gary Altman’s and Ray Giorgio’s role in the ignition cylinder issue is a problem. In court, Altman claimed that he did not feel that the Melton’s car was “unsafe.” This coming after submitting the initial mechanical complaint about the ignition falling out of run, in 2004:

docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf
During the investigation, several different approaches to modify the ignition cylinder were brought up to DeGiorgio. All of which were quickly dismissed by DeGiorgio, because the switch was already “very fragile,”

docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf (1)
Later on, all fixes were dropped, as it wasn’t deemed necessary. With a tight deadline and budget, the engineers could not justify any of the fixes at the time, as it wasn’t an “acceptable business case.”

docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf (2) docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf (3) docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD017.pdf (4)

In 2006, DeGiorgio finally signed off on a design change for Delphi. The design change included  a stronger spring and longer detent plunger to increase the force needed to switch the key between different positions, along with an unrelated electrical upgrade. In an unexplained move, DeGiorgio did not assign a new part number to the improved switch design. The design change added 90 cents to the parts cost, and about $400,000 in tooling costs.

 

cobalt report 3
docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD047.pdf (1)

But, with this large of a role in the decision to delay the redesigned ignition switch, DeGiorgio claimed that he was not aware of any mechanical changes to the switches during his testimony in the Melton family suit against GM:

docs.house.gov meetings IF IF02 20140401 102033 HHRG-113-IF02-20140401-SD056.pdf
Though, he did sign off on the changes, and worked with Delphi to test batches of ignition cylinders that contained an upgraded PCB (Printed Circuit Board), and detent plunger:

cobalt report 14

democrats.energycommerce.house.gov sites default files documents GM-Commodity-Validation-Sign-Off-2006-4-26.pdf

 

Curiously enough, though, is that GM had very little oversight on Delphi’s quality control, and Delphi did not check the rotational torque needed to turn past the switches detents. GM simply accepted Delphi’s parts and trusted their QC. But with rumored tensions between GM and Delphi, it’s said that cost cutting measures might be to blame as GM forced Delphi to push prices down, sacrificing parts quality. If this were true, GM’s choice to outsource QC to the supplier left them in the dark for too long, preventing them from seeing the immediate effects of their problems with Delphi:

cobalt report 4cobalt report 18

While this was going on, GM released the key insert as a “containment solution;” it would be the minimum needed to alleviate the problem for effected customers. This was chosen over two other modifications to the ignition cylinder, which were seen as a “partial solution” in the case of adding an additional detent mechanism to add more resistance to rotating the key out of “run,” and a “sure solution” involving moving the ignition switch higher up on the column, using a gear drive system to reach the rotary switch responsible for selecting which electrical circuit to run on. The added gearing would also increase rotational torque, the design stated.
cobalt report 11
cobalt report 12cobalt report 13
In 2007, the NHTSA began to probe into the surprising number of airbag-related complaints, despite “GM’s indications that they see no specific pattern.”
cobalt report 15

The issue was set aside, for the most part, until GM was informed by the Melton suit that there was a possible design change in the switch, based on an investigation into junkyard-found switches from the effected models. The testing showed that there was a noticeable change in detent torque, but no documentation from GM to show the changes. The GM engineers and representatives in the case were caught off guard by this design change, and began an internal investigation. This investigation lead GM engineer Brian Stouffer to find the documents that showed DeGiorgio signing off on design changes with no part number change.

cobalt report 5cobalt report 16
Finally, the most impressive point of this story comes from GM’s reactions to the NHTSA’s investigations. The NHTSA emailed GM asking for clarification on several other recalls, documenting GM’s reactions to other product issues with a disdain for GM’s penchant for doing the least amout possible to avoid full recalls; ie: regional recalls for parts failures in the rust-belt states. Saying that some were broadsided by this information would be an understatement:

cobalt report 19[…]
cobalt report 19

The response by Mike Robinson, VP for environment, energy and safety policy, sums up GM’s perception and confusion over their responses to the Cobalt issue, and several other poor recall responses in the past. “This note from NHTsA, both the content and tone, comes like a bolt out of the blue,” he states, “We worked way too hard to earn a reputation as the best and we are not going to let this slide.”

cobalt report 19
To summarize, GM is its own worst enemy. They responded poorly to incredibly early reports, dismissing the issue too quickly as a casual problem. With reports going back to 2001, during the Saturn Ion development, there is no reason why the switch should have come unmodified to the Cobalt development; never mind the dismissal of the problem before the car was produced. Ray DeGiorgio’s role in this problem is larger than he initially lead on in the Melton case, though his motive in this discrepancy is unknown at this time.

Full text to all 619 pages can be find here.

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US Justice Dept, House Panel To Investigate GM Ignition Recall http://www.thetruthaboutcars.com/2014/03/us-justice-dept-house-panel-to-investigate-gm-ignition-recall/ http://www.thetruthaboutcars.com/2014/03/us-justice-dept-house-panel-to-investigate-gm-ignition-recall/#comments Wed, 12 Mar 2014 11:12:40 +0000 http://www.thetruthaboutcars.com/?p=770273 Things are going from bad to worse for General Motors amid the fallout related to the long-delayed recall of 1.6 million vehicles worldwide over a faulty ignition switch installed between 2003 and 2007, as both the U.S. Justice Department and a House panel plan to conduct separate investigations into the matter. Automotive News and Bloomberg […]

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GM-building-US-Flag

Things are going from bad to worse for General Motors amid the fallout related to the long-delayed recall of 1.6 million vehicles worldwide over a faulty ignition switch installed between 2003 and 2007, as both the U.S. Justice Department and a House panel plan to conduct separate investigations into the matter.

Automotive News and Bloomberg report the Justice Department’s investigation will focus on whether or not GM violated criminal or civil laws in failing to alert regulatory bodies sooner than they had about the switch, with lawyers in the U.S. Attorney’s Southern District of New York office leading the charge.

Meanwhile, the House Energy and Commerce Committee will determine if either the automaker or the National Highway Traffic Safety Administration — who is also conducting an investigation into the recall via a 107-question survey due April 3 — missed anything “that could have flagged [the] problems sooner,” according to Representative Fred Upton, who also added:

If the answer is yes, we must learn how and why this happened, and then determine whether this system of reporting and analyzing complaints that Congress created to save lives is being implemented and working as the law intended.

On top of the aforementioned inquiries, GM itself has hired Jenner & Block LLP chairman Anton Valukas to head an internal investigation into the handling of the recall. Valukas was the appointed examiner for the Justice Department in the inquiry of Lehman Brothers over the financial institution’s downfall in the run-up to the Great Recession in late 2008.

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U.S. Government Sells Remaining General Motors Stock http://www.thetruthaboutcars.com/2013/12/u-s-government-sells-remaining-general-motors-stock/ http://www.thetruthaboutcars.com/2013/12/u-s-government-sells-remaining-general-motors-stock/#comments Tue, 10 Dec 2013 10:30:21 +0000 http://www.thetruthaboutcars.com/?p=676634 It’s official: the United States government has sold off its remaining $49.5 billion investment in General Motors. U.S. Treasury Secretary Jack Lew announced that of the aforementioned investment — made during the fallout of the Great Recession — $39 billion came back to the government’s coffers while the taxpayer lost $10.5 billion on the deal. […]

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gmstock

It’s official: the United States government has sold off its remaining $49.5 billion investment in General Motors.

U.S. Treasury Secretary Jack Lew announced that of the aforementioned investment — made during the fallout of the Great Recession — $39 billion came back to the government’s coffers while the taxpayer lost $10.5 billion on the deal. The government originally received 912 million shares — or 60.8 percent total ownership — in exchange for saving the automaker from certain doom in 2008. Once the company regained its footing in November 2010, the government began selling shares in a divestiture that lasted until this afternoon, when only 2 percent remained of GM remained in the federal investment portfolio.

On the other side, GM’s stock rose to $41.17 during regular trading hours, the highest peak the stock has seen since their IPO debuted in 2010. The automaker currently sits upon a nest egg of $26.8 billion in cash, and is considering bringing back dividends to their stockholders. Most of the nest egg was built during 15 consecutive months of profitability based on the strength of their brand and rising sales in North America and China.

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The Legend of Ford’s Truck Czar’s Rule Over Truck Mountain http://www.thetruthaboutcars.com/2013/11/the-legend-of-fords-truck-czars-rule-over-truck-mountain/ http://www.thetruthaboutcars.com/2013/11/the-legend-of-fords-truck-czars-rule-over-truck-mountain/#comments Tue, 12 Nov 2013 07:59:30 +0000 http://www.thetruthaboutcars.com/?p=648954 Once upon a time, one man rose from the realm of sales to helm Ford’s truck division. With his iron fist, he divided the F-150 range into several specialized units, reaping the rewards as his dominion over the light truck market expanded. That man is Doug Scott, and this is the tale of how he […]

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Doug Scott

Once upon a time, one man rose from the realm of sales to helm Ford’s truck division. With his iron fist, he divided the F-150 range into several specialized units, reaping the rewards as his dominion over the light truck market expanded.

That man is Doug Scott, and this is the tale of how he came to be the Sovereign of Truck Mountain.

Though his title is humble, Ford’s Truck Group marketing manager has brought in $22 billion in revenue over the years, bettering his competitors through offering an F-150 for everyone. For example, contractors and landscapers just starting out could have the STX for just over $26,000, while businessmen making the big bucks off the Bakken could opt for the top-of-the-line Limited for around $54,000, and hardcore off-road prerunners can feel like a reptile in their Raptor beginning at $45,000.

This strategy has not only paid off for Ford, but has inspired General Motors and Chrysler to play follow the leader, with the Italo-American alliance spinning off the Ram brand from Dodge for greater focus while GM’s bowtie has unveiled their own luxury pickup to go up against the F-150 Platinum Edition. Meanwhile, the F-150 has lived at the summit of Truck Mountain since 2010, picking up $4,000 per truck than GM per Kelley Blue Book.

With 2013 sales on track to hit 700,000 units, and recording the best October since 2004, Scott aims to keep his competitors on their toes. His latest from the F-Series is a sport truck dubbed the Tremor, whose 3.5-liter turbocharged V6 will push the superbeast from zero to 60 in 6.4 seconds, just over one second slower than the V6 version of the Mustang.

The Tremor, like the King Ranch, the Raptor and all of the other F-150s, were born from the collaboration between the marketers and engineers within the truck group, who, in turn, gathered their information on what customers want from the customer relationships built through events and organizations, such as the Professional Bull Riders Association and the Future Farmers of America. The result: a 34.6 percent share of the truck market through September 2013, with the Chevy/GMC tag team a close second at 30.7 percent, and Ram a distant third with just 16.3 percent.

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Chevrolet In Duel With Volkswagen For The Heart of China http://www.thetruthaboutcars.com/2013/10/chevrolet-in-duel-with-volkswagen-for-the-heart-of-china/ http://www.thetruthaboutcars.com/2013/10/chevrolet-in-duel-with-volkswagen-for-the-heart-of-china/#comments Mon, 28 Oct 2013 17:53:54 +0000 http://www.thetruthaboutcars.com/?p=636369 When one thinks of General Motors’ relationship with China, Buick flashes into the mind like a brake light in the Beijing smog. Sometimes, Cadillac comes up, as well. However, with Volkswagen preparing to slingshot past them in a manner akin to Danica Patrick being flung toward the front of the pack with help from Tony […]

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#8 Chevrolet Cruze. Picture courtesy globaltimes.cn

When one thinks of General Motors’ relationship with China, Buick flashes into the mind like a brake light in the Beijing smog. Sometimes, Cadillac comes up, as well. However, with Volkswagen preparing to slingshot past them in a manner akin to Danica Patrick being flung toward the front of the pack with help from Tony Stewart, CEO Dan Akerson is planning to aggressively push Chevrolet through the choking air, and into as many Chinese garages as he can find.

As Automotive News reports, the push will be directed by GM China’s chairman Tim Lee, who will also add SUV sales goals to the maturing market:

We got still a lot of mother brand-building to do for Chevrolet and we will resource that appropriately and get that job done… It’s a brand that has a total history in the country of about seven or eight years, so based on that relatively short time in the marketplace, our brand awareness is good, our product consideration is good. But can it be better? I guess.

The first volley fired in the upcoming battle for Chinese automotive supremacy will be the introduction of the second-generation Cruze to spur demand in the country’s burgeoning western sector, as well as smaller — and, one hopes, fully occupied — cities. GM aims to add 1,000 dealerships to this area by 2017, backed by an $11 billion investment through 2016 that promises to establish four new assembly plants manufacturing locally around 5 million units per year. GM also plans to bulk up Cadillac’s presence in China with a locally built version of the ATS come 2014.

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Ford’s Transit Taxi To Connect Passengers Worldwide http://www.thetruthaboutcars.com/2013/10/fords-transit-taxi-to-connect-passengers-worldwide/ http://www.thetruthaboutcars.com/2013/10/fords-transit-taxi-to-connect-passengers-worldwide/#comments Tue, 22 Oct 2013 17:00:14 +0000 http://www.thetruthaboutcars.com/?p=631698 With a few successes under Ford’s strap with the American buckle, the Blue Oval made be known its aspirations to go for the world championship belt in ferrying drunk revelers and harried air travelers with their Transit Connect Taxi in its debut in Hong Kong. “Ford Transit Connect Taxi has proven itself in taxi fleets […]

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Ford-Transit-Connect-Hong-Kong-Main-ArtWith a few successes under Ford’s strap with the American buckle, the Blue Oval made be known its aspirations to go for the world championship belt in ferrying drunk revelers and harried air travelers with their Transit Connect Taxi in its debut in Hong Kong.

“Ford Transit Connect Taxi has proven itself in taxi fleets across the U.S.,” said Ford’s head of global product development Raj Nair in a statement. “Now, we are building on that success, offering the vehicle for sale in even more markets, including global cities like Hong Kong.” The taxi, set to go on sale in 2014 globally, will run off of Hong Kong’s liquefied petroleum gas infrastructure, an option that has been available since 2010 in the U.S. domestic market alongside compressed natural gas and gasoline.

Under the hood, a 2.5-liter engine attached to a six-speed automatic will keep things moving smoothly, or as smooth as driving (or riding in) a taxi can be, at least. The new taxi is longer than the previous domestic-only models, with seating for up to five and more room for the myriad of baggage travelers will be dragging tiredly behind them. The taxi is also shorter for more clearance for strip club adverts on the roof, with a lower floor allowing for easier access, especially if converted for wheelchair use.

In exchange for spreading the love of the Transit Connect Taxi around the world, Ford has plans to bring the Transit Connect Wagon from Europe to the United States for the 2014 model year. The people carrier holds seven, and sips down a gallon of fuel every 30 miles on the highway. Ford truck communications manager Mike Levine has high hopes for the newest addition to the family:

We believe there’s an opportunity. The Transit Connect Wagon is virtually the same size as seven-passenger minvans were when they were introduced in the 1980s. Since then, they’ve gotten too big, too expensive and consume too much fuel.

The Transit Connect Taxi currently serves markets in New York, Los Angeles, Chicago and Miami, with the Blue Oval owning 60 percent of the taxi market. Ford offers the C-MAX Hybrid for taxi service, as well.

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Ford CEO Mulally To Head Boeing Or Microsoft Soon? http://www.thetruthaboutcars.com/2013/10/ford-ceo-mulally-to-head-boeing-or-microsoft-soon/ http://www.thetruthaboutcars.com/2013/10/ford-ceo-mulally-to-head-boeing-or-microsoft-soon/#comments Sat, 19 Oct 2013 16:06:35 +0000 http://www.thetruthaboutcars.com/?p=627322 The rumor mill has been grinding away as of late regarding the possible return of Ford CEO Alan Mulally to helm either one of two of Seattle’s many economic engines: Microsoft and Boeing. In the face of these rumors, Mulally has opted not to dispel the rampant speculation. Reuters was  among those in attendance at an […]

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ford-ceo-alan-mulally-china-lincolnjpg-894a92e3f2c9121aThe rumor mill has been grinding away as of late regarding the possible return of Ford CEO Alan Mulally to helm either one of two of Seattle’s many economic engines: Microsoft and Boeing. In the face of these rumors, Mulally has opted not to dispel the rampant speculation.

Reuters was  among those in attendance at an automotive conference in Wuhan, China, where Mulally’s response to being asked whether he was directly or indirectly approached by either company to take the wheel was, “I love serving Ford.” He added that there were no changes to the plan laid out for Ford to find a successor to the third longest serving CEO when he steps down at the end of 2014, though Reuters did report that the auto maker may be open to an earlier departure should Mulally accept an offer elsewhere.

Since taking over Ford in 2006, Mulally helped steady the then-troubled company through his One Ford plan, which led to the sale of acquired brands — including Aston Martin and Volvo — to bring the focus back upon the Ford and Lincoln product lines. In turn, Mulally’s Ford was the only auto maker to avoid the pitfalls and bailouts experienced by Chrysler and General Motors during the Great Recession’s early days in late 2008.

With Microsoft’s market price still stagnant a decade on, and Boeing’s own woes with the 787 Dreamliner, either company could possibly benefit should the right offer approach his desk, especially if hand-delivered by his senior contacts in both companies to his home in Seattle.

Of course, when asked if he were open to a new executive post upon the end of his term at Ford, Mulally laughed and only had three words for the reporter: “I don’t know.”

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Former Volvo CEO Stefan Jacoby to Run GM’s International Unit Minus China http://www.thetruthaboutcars.com/2013/08/former-volvo-ceo-stefan-jacoby-to-run-gms-international-unit-minus-china/ http://www.thetruthaboutcars.com/2013/08/former-volvo-ceo-stefan-jacoby-to-run-gms-international-unit-minus-china/#comments Mon, 05 Aug 2013 14:49:28 +0000 http://www.thetruthaboutcars.com/?p=498260 Stefan Jacoby, whose most recent job was CEO of Volvo, has been hired by General Motors to head their international operations. Jacoby replaces Tim Lee who is slated to become chairman of GM China as that unit is split off from the rest of GM International. Lee will continue to head global manufacturing for the […]

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Stefan Jacoby new

Stefan Jacoby, whose most recent job was CEO of Volvo, has been hired by General Motors to head their international operations. Jacoby replaces Tim Lee who is slated to become chairman of GM China as that unit is split off from the rest of GM International. Lee will continue to head global manufacturing for the Detroit based automaker. The business unit that Jacoby will be running will still have operations in more than 100 markets in Africa, Asia Pacific and the Middle East.

Before Volvo, Jacoby had been CEO of Mitsubishi Europe and he had been in charge of Volkswagen’s U.S. operations, one of a number of positions that he held at VW. His tenure at Volvo ended following a mild stroke that he suffered in September of 2012, though it was reported that his health had less to do with his departure than a conflict with Volvo vice chairman Hans-Olov Olsson over strategy and executive hiring as well as a failure to meet sales growth objectives in China. Other than saying that he is fit to do the job, GM declined further comment on Jacoby’s health.

Jacoby is the latest former VW executive to be hired at GM, with Karl-Thomas Neumann now running Opel, Michael Lohscheller, Opel’s CFO and Tim Mahoney GM’s, head of global marketing, all joining the company within the past year.

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GM Misses Estimates, Doubles Losses In Europe http://www.thetruthaboutcars.com/2013/02/gm-misses-estimates-doubles-losses-in-europe/ http://www.thetruthaboutcars.com/2013/02/gm-misses-estimates-doubles-losses-in-europe/#comments Thu, 14 Feb 2013 14:33:17 +0000 http://www.thetruthaboutcars.com/?p=477510 For decades, big corporate profits were blasted as a sign of greed, especially by unions. GM changed all that. When a sheep dipped GM, free of legacy finance costs, and not paying taxes due to losses a normal company would not have been able to carry over after a bankruptcy, declared a record $7.6 billion […]

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For decades, big corporate profits were blasted as a sign of greed, especially by unions. GM changed all that. When a sheep dipped GM, free of legacy finance costs, and not paying taxes due to losses a normal company would not have been able to carry over after a bankruptcy, declared a record $7.6 billion profit in 2011, chests of GM boosters swelled with pride, as if the profits had been theirs. A year later, there is $2.7 billion less to be proud of. GM’s European millstone, Opel, continues to drag the company down. Opel’s operative losses more than doubled to $1.8 billion for all of 2012.

GM reported as $4.9 billion profit for 2012, and “a weaker-than-expected fourth-quarter profit on Thursday, citing wider losses in Europe and lower vehicle prices in its core North American market,” says Reuters. Analysts had hoped GM would do better.

The situation in Europe is expected to be getting worse. CFO Dan Ammann told Reuters that “GM still sees industry sales in Europe declining in 2013 and is “not betting on” a pickup later in the year.”

GM wrote down $5.2 billion worth of assets in Europe. GM’s $423 million investment for a 7 percent stake in Peugeot, is now carried at half price on GM’s books. Ammann said that GM has “no intention of putting more cash into Peugeot.”

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GM Back To Its Channel Stuffing Ways http://www.thetruthaboutcars.com/2012/04/gm-back-to-its-channel-stuffing-ways/ http://www.thetruthaboutcars.com/2012/04/gm-back-to-its-channel-stuffing-ways/#comments Sat, 14 Apr 2012 15:45:37 +0000 http://www.thetruthaboutcars.com/?p=439947 The Nikkei [sub] comes with the good news that “Japan’s automakers have finally resolved the inventory shortages that have hindered their sales in the U.S. market.” According to the Tokyo wire, Japan’s automakers “are in a better position to compete with their Western and Korean rivals,” now that lots are stocked again. Well, not quite. […]

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The Nikkei [sub] comes with the good news that “Japan’s automakers have finally resolved the inventory shortages that have hindered their sales in the U.S. market.” According to the Tokyo wire, Japan’s automakers “are in a better position to compete with their Western and Korean rivals,” now that lots are stocked again.

Well, not quite. Japanese inventories are still fashionably slim compared to some Detroit chubbos. Pop some Tums and have a look.

According to data compiled by Automotive News, Honda has a 54 day supply. Around two months are considered normal for the industry.  Toyota however has only a 32 day supply, smaller Subaru has 30.

Let’s take this opportunity to look at all lots.

Days of supply Units Days Apr 2012 Days Mar 2012
Detroit 3: 1,534,900 70 72
European 231,300 53 42
Japanese 827,400 43 46
Korean 122,200 27 34

The Detroit 3 definitely have no shortage of cars with an average of 70 days’ supply on the lots. The Europeans are at the current industry average with 53 days of supply. The Japanese have 43 days’ worth  on the lots, but “the Koreans” have only 27 days.

Units Days 1 Apr 2012 Days 1 Mar 2012
HYUNDAI-KIA 122,200 27 34
SUBARU 35,000 30 33
BMW 32,300 30 33
TOYOTA 230,400 32 36
PORSCHE 3,600 41 41
NISSAN 226,400 47 54
JAGUAR LAND ROVER 9,200 47 48
DAIMLER AG 44,500 51 45
HONDA 244,000 54 50
MAZDA 62,300 54 59
Industry 54 57
FORD 477,300 60 68
CHRYSLER GROUP 354,900 61 66
VOLVO 15,000 63 66
VW GROUP 116,200 67 42
SUZUKI 6,800 72 68
GENERAL MOTORS 713,200 86 80
MITSUBISHI 22,500 88 125
TOTAL 2,715,800 54 57

Indeed, Hyundai-Kia’s supply is the lowest of them all with only 27 days until empty. As indicated by the Detroit 3 number, American makers are generously stocked, but averages can be deceiving.

Ford and Chrysler carry a regulation two month supply on the books.

The absolutely worst of Detroit is GM with a nearly three month supply. Only consolation: Deadman walking Mitsubishi carries two days more. While days to sell are down industry-wide, inventory is increasing on GM lots: From March to April, it took a week longer to move an already sluggish inventory.

GM’s lot queens: Escalade EXT (144 days), Yukon (136 days), Yukon XL (133 days), Sierra (132 days), CTS (124 days), all Cadillac cars (123 days), all Buicks (121 days).

Have a look at this chart: No wonder that GM is losing market share. The cars are all sitting on the lot.

 

 

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General Motors Trying Stealth Tactics For Super Bowl Ads http://www.thetruthaboutcars.com/2012/01/general-motors-trying-stealth-tactics-for-super-bowl-ads/ http://www.thetruthaboutcars.com/2012/01/general-motors-trying-stealth-tactics-for-super-bowl-ads/#comments Thu, 05 Jan 2012 19:46:59 +0000 http://www.thetruthaboutcars.com/?p=424547 Rather than running commercials during the Super Bowl, General Motors is looking to try something more subversive – product placement within other brand’s TV spots during the big game. Automotive News reports that GM marketing man Joel Ewanick was investigating the possibility of paying other advertisers to insert GM vehicles into their ads. But various […]

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Rather than running commercials during the Super Bowl, General Motors is looking to try something more subversive – product placement within other brand’s TV spots during the big game.

Automotive News reports that GM marketing man Joel Ewanick was investigating the possibility of paying other advertisers to insert GM vehicles into their ads. But various contractual elements related to Super Bowl advertising may kill the idea in its nascent stages.

Super Bowl ads are apparently restricted via a form of non-compete clause. Ford and Chevrolet could not run ads in the same “pod” (i.e. commercial break), and GM’s plan would cause havoc with this arrangement. Having GM products inserted into another company’s ad, as well as commercials for GM’s own products would cause a logistical nightmare for the people who decide where and when ads are placed.

Furthermore, the plan would run afoul of a long-standing policy against buying a 30 second spot and then re-selling 5 or 10 second blocks of time. NBC, which broadcasts the game, would also have to approve any ads that feature the promotion of an unrelated brand. The article also mentions a “reward system” that would give small prizes to viewers who are able to spot product placements, though no details on this seemingly silly scheme were given.

As much as Super Bowl ads have become a part of pop culture, meriting their own examination, the undeniable fact remains that for many, the ads are a great way to grab another beer or, shall we say, recycle the liquids via the municipal sewage system.

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GM Will Build Less To Make More http://www.thetruthaboutcars.com/2011/08/gm-will-build-less-to-make-more/ http://www.thetruthaboutcars.com/2011/08/gm-will-build-less-to-make-more/#comments Thu, 11 Aug 2011 15:43:15 +0000 http://www.thetruthaboutcars.com/?p=406674 “In attempts to boost profitability, GM wants to cut the number of vehicle platforms by half over the next decade and consolidate the number of engines,” reports the DetN. That’s the good news. The bad news is that “GM’s executives admit the automaker continues to have an inefficient manufacturing network, weak supplier relations and too […]

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“In attempts to boost profitability, GM wants to cut the number of vehicle platforms by half over the next decade and consolidate the number of engines,” reports the DetN. That’s the good news. The bad news is that “GM’s executives admit the automaker continues to have an inefficient manufacturing network, weak supplier relations and too many variations in the types of engines and vehicle underpinnings it uses to build cars and trucks globally.” If the DetN says it, then it must be true. Putting platforms and engines on a diet is seen as the cure.

Mary Barra, GM’s product chief, told the DetN and an assemblage of Wall Street analysts that by 2018, “GM hopes to build 90 percent of its vehicles on 14 platforms — half the number now — and boost manufacturing efficiency by 40 percent.” Not to nitpick, but if you build 90 percent of your vehicles on 14 platforms, then you can’t build the remaining 10 percent on thin air and you will need more platforms for low volume cars. So we talked a bit to GM to find out more about how they will go from zaftig to svelte.

The basic story is that GM is trying to streamline its “too many variations in the types of engines and vehicle underpinnings,” and this is a good thing.

Currently, only a third of GM’s volume comes from cars that share what GM calls “core architectures.”  The rest sits on a hodgepodge of what GM charitably calls “regional architectures.” Currently, there are 30 “Core Architectures” and an untold number of regional dishes.

In the future, GM’s local chefs will have to use a common cookbook.  By 2014, in the world of cars that is tomorrow, the number of “Core Architectures” will shrink to 24, but the global volume that uses these core architectures will grow to 62 percent. Four years later, by 2018, all regional architectures will have vanished. The number of global architectures will have shrunk to 14. Those 14 global architectures will serve 90 percent of the volume.

But again, what about the remaining 10 percent? “There are a few cars that have a unique architecture, which they share with nobody,” explains Klaus-Peter Martin, GM spokesman in Detroit. As examples, he names the Chevrolet Corvette and some vehicles produced with GM’s JV partners in China.

Likewise, the number of engine platforms will shrink from currently around 20 to less than 10 in 2018. Keep in mind theses are engine platforms, which allow a multitude of engines.

GM expects global efficiency gains between 35 and 40 percent from this, which is a tall order. But if you look at how little global commonality there is currently in the world of GM, those numbers should be doable. With a lot of screaming from the natives.

Michelle Krebs of Edmunds says “it’s the course a lot of manufacturers are taking. Everyone is trying to get to greater economies of scale.”

Volkswagen for instance is moving away from platform-think and goes to its new kit architecture. This allows a much higher number of different cars with different character, built from modules. Object-oriented car design, if you will.  On a smaller scale, BMW creates a number of engines, gasoline and diesel, from one building block, a single, standardized cylinder.

This industry takes huge investments, and spreading them across as many units as possible is the name of the game. If you make the most from the least, you win. Don’t think “badge engineering” when you hear this. If done right, the slimdown can make the offerings more attractive, and can help the brand(s) gain sex-appeal. That of course remains in the eye of the beholder. If you like the right lady, you’ll complain that the left one is the wrong one.

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It Turns Out GM And Ford Really Don’t Like Each Other http://www.thetruthaboutcars.com/2011/07/it-turns-out-gm-and-ford-dont-really-like-each-other/ http://www.thetruthaboutcars.com/2011/07/it-turns-out-gm-and-ford-dont-really-like-each-other/#comments Thu, 21 Jul 2011 17:06:18 +0000 http://www.thetruthaboutcars.com/?p=403792 Earlier this year when it seemed that a price war could be brewing in the US market, one of TTAC’s industry sources noted that the problem wasn’t strictly a question of business competition. Speaking on background, the source told us that when speaking with old friends at Ford and GM, the level of mutual distaste […]

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Earlier this year when it seemed that a price war could be brewing in the US market, one of TTAC’s industry sources noted that the problem wasn’t strictly a question of business competition. Speaking on background, the source told us that

when speaking with old friends at Ford and GM, the level of mutual distaste for each other is very high…it seems to be getting personal. Lots of egos involved, [which] increases potential for short-sighted decision-making

At the time, I was willing to chalk up this animosity to the usual industry hyper-competitiveness (or at least a return to form after the lockstep mutual support of the bailout era), but it seems I should have paid more attention to our source’s concerns. As it turns out, the bad feelings between Detroit’s cross-town rivals has apparently gotten worse…

Jalopnik reveals that NYT auto reporter Bill Vlasic’s forthcoming book highlights just how uncivil the Ford-GM rivalry has become:

What [Ford marketing boss] Jim Farley really wanted to do was kick the daylights out of General Motors. “I’m going to beat Chevrolet on the head with bat,” he said with a slightly wicked smile. “And I’m going to enjoy it.” There was a saying going around Ford: GM was like the kid who was born on third base and yells out, “Hey Ma, I hit a triple!” Farley and his fellow Ford executives and workers were ready to rumble.

…This was like the glory days again — Ford versus GM, let the better car company win. “We’re going to beat on them, and it’s going to be fun,” said Farley. “F—- GM. I hate them and their company and what they stand for. And I hate the way they’re succeeding.”

Now I understand why people are forever accusing TTAC of “hating” one car company or another… it seems that behind a thin veneer of professional courtesy, the auto industry nurtures a viciously competitive streak that crosses into hatred and contempt for competitors. What a pity it is that competition isn’t enough any more, and that executives have to “hate what their competitors stands for” to motivate themselves. Isn’t taking pride in your own products and achievements enough?

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Inside The Mind Of Dan Akerson http://www.thetruthaboutcars.com/2011/06/inside-the-mind-of-dan-akerson/ http://www.thetruthaboutcars.com/2011/06/inside-the-mind-of-dan-akerson/#comments Mon, 06 Jun 2011 19:48:44 +0000 http://www.thetruthaboutcars.com/?p=397555 The Detroit News snagged a lengthy interview with GM CEO Dan Akerson, giving observers one of the first in-depth looks at the man who will be leading The General for the next three to four years. The interview is to lengthy to summarize here, but there are a few items that are worth noting… For […]

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The Detroit News snagged a lengthy interview with GM CEO Dan Akerson, giving observers one of the first in-depth looks at the man who will be leading The General for the next three to four years. The interview is to lengthy to summarize here, but there are a few items that are worth noting…

For one thing, Akerson has some serious ambitions and doesn’t mind sharing them with the world.

There are a couple milestones in my tenure I want to accomplish. I want to earn $10 billion a year profit. I want get the U.S. pension fund to fully funded — and we’re making real progress there. I want to make Europe profitable on a sustainable basis.

None of these are going to be easy to accomplish. A $10b profit would require a doubling of GM’s performance last year, and the other goals (particularly in regards to the troubled European operations) will divert a huge amount of cash. Meanwhile, the old GM challenge of “culture change” continues to be one of Akerson’s top priorities as well, as he seeks to develop a competitive atmosphere and break down the tradition of “boss worship” which holds back the necessary give-and-take.

But possibly the biggest challenge Akerson faces has to do with GM’s product, and the DetN includes a separate write-up of Akerson’s thoughts on the matter. Speed of development is one of his major changes, and he acknowledges that his desire to pull forward development of the 2013 Chevrolet Malibu faced internal dissent (which he overruled, raising questions about the alleged death of “boss worship” at GM).

On the issue of fuel economy, he argues that the Chevrolet Volt

is a novelty (today), but it won’t be in five years. It’s going to be an old, old technology and old news.

He also says ethanol will “die slowly” and hints that GM will eventually start selling dual-fuel commercial vehicles, capable of running on natural gas or gasoline. Akerson also says that

we’re not going to do these big, heavy trucks that are making 15 miles, 12 miles to a gallon.

Which, given rising CAFE standards and gas prices, comes as no real surprise. It does, however, create some challenges to his goal of $10b annual profits, as much of GM’s profit traditionally comes from the sale of large trucks, and fuel-economy-improvement-related cost increases for pickups are projected to be costly.

Akerson made a few surprising statements on the luxury front, including a perplexing assessment of Cadillac’s next two vehicles, the XTS and ATS, which he says

are not going to blow the doors off, but they will be very competitive.

Whatever that means. And despite his apparent lack of confidence in the next generation of Caddies, he still took a potshot at Ford, saying

They are trying like hell to resurrect Lincoln. Well, I might as well tell you, you might as well sprinkle holy water. It’s over

In general, Akerson comes across as quite candid, possibly overly so (though you won’t hear us complaining about it). But for all his ambitions, he offers relatively little in the way of specific strategies to accomplish them. For example, his desire to make GM more like Toyota is hardly a “strategy,” as every automaker has been studying and trying to replicate Toyota’s success for decades. Speeding up development is an indication of his approach, but it brings with it worries about future quality. Similarly his desire to compete with every Volkswagen model while simultaneously downsizing and restructuring Opel sounds like a tough balancing act. But then, when it comes to turning around a company as large and perennially troubled as GM, ambitious goals and tough strategies are the only way forward.

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TTAC Contest: What Car Inspired GM’s Panel-Gap Improvements? http://www.thetruthaboutcars.com/2011/05/ttac-contest-what-car-inspired-gms-panel-gap-improvements/ http://www.thetruthaboutcars.com/2011/05/ttac-contest-what-car-inspired-gms-panel-gap-improvements/#comments Fri, 20 May 2011 19:03:25 +0000 http://www.thetruthaboutcars.com/?p=395634 The auto media has been receiving its advance copies of Bob Lutz’s forthcoming book “Car Guys versus Bean Counters” over the last few weeks, and have been leaking some of the more provocative statements and conclusions from it. I too requested a book and tore through it over the past week, enjoying Lutz’s direct voice […]

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The auto media has been receiving its advance copies of Bob Lutz’s forthcoming book “Car Guys versus Bean Counters” over the last few weeks, and have been leaking some of the more provocative statements and conclusions from it. I too requested a book and tore through it over the past week, enjoying Lutz’s direct voice and keen insights into his time at General Motors… as well as the attention-grabbing, politically-charged statements that the rest of the media seems so fixated upon. The bad news is that I won’t be able to write a full review until we get closer to its mid-June launch date, but the good news is that our forbearance has been rewarded: despite sideswiping yours truly in one passage, a brief but rewarding email conversation has generated more mutual respect, and Mr Lutz has agreed (in principle) to a TTAC interview to accompany our review at the time of the book’s release. Sometimes observing an embargo is worth it.

But fear not: just because the promise of an interview with one of the most influential figures in the industry has us delaying our review for another month or so, we’ve got more Lutz-related material with which to build up to what I expect to be a watershed interview for TTAC. Next week I’ll be publishing a review of Mr Maximum’s previous book “Guts,” and to kick of the coming months of Lutzmania, we’ve got a very special contest that is sure to stump even TTAC’s most well-versed Best and Brightest.

Shortly after Lutz’s arrival at GM, he began tackling the problem of body panel gaps, which at the time was 5mm with a variation of up to 2mm, a standard that he “complained and complained” about, given that the Germans and Japanese were building cars with smaller gaps and almost no variation. At one point, Lutz attended a large meeting at GM’s Milford Proving Grounds in which he and senior execs from GM’s Product Development, Design, Quality and Manufacturing examined GM’s then-current lineup and compared them to the competition. After some loud complaints about GM’s inability to create crisp panel gaps, Lutz was confronted by the executive in charge of GM’s sheet metal fabrication, who apparently grabbed Lutz by the lapels and raised him up on his toes, saying

OK, I think I’ve heard about as much of this shit as I want to. YOU are now going to take ME to the car that you think is best and we’re going to focus on that one.

Lutz then took him to one of the competitive cars that Lutz thought was the best sheet-metal-wise… which leads us to the question: which car did Lutz identify as having the best sheet metal of the competition? This vehicle became GM’s “new standard for sheet metal,” and learning from it directly improved GM’s sheet metal quality, according to Lutz. So, what was it?

Leave your answer in the comments section, and the first correct answer gets our Lutzian prize: a special booklet and USB storage drive (along with branded packaging) that was handed out to journalists attending the launch of the Chevrolet Volt. In short, your knowledge of GM’s obscure history will gain you a piece of GM’s less-obscure history. Qualifying answers must identify the make, model and generation (expressed in the range of model-years produced or model code, for example “1998-2005 (E46) BMW 3 Series”). This contest is closed to GM employees, members of the auto media or anyone else in possession of an advance copy of “Car Guys”(i.e. show a little honor and don’t cheat).

Good luck!

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GM Ramps Up Production. Of Cheerful Numbers http://www.thetruthaboutcars.com/2010/12/gm-ramps-up-productio/ http://www.thetruthaboutcars.com/2010/12/gm-ramps-up-productio/#comments Wed, 08 Dec 2010 09:32:43 +0000 http://www.thetruthaboutcars.com/?p=376212 Even the Detroit News, by some regarded as an extension of the Big 3 PR departments, can’t help but ask: “Are Detroit’s new automakers falling back into old habits?” New automakers? Old habits? Well, it sure looks like the Big 3 have drastically ramped-up production. Production of good numbers, that is. Especially one of them […]

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Even the Detroit News, by some regarded as an extension of the Big 3 PR departments, can’t help but ask: “Are Detroit’s new automakers falling back into old habits?”

New automakers? Old habits?

Well, it sure looks like the Big 3 have drastically ramped-up production. Production of good numbers, that is. Especially one of them has been very busy in that department: GM. The General currently has a 95 day supply of cars sitting on dealer lots, up from 76 days in August.

The industry average stands at 67 days, says a Citi Investment Research report. A two month supply is considered normal. What’s more, carmakers are supposed to switch from rich to lean at this time of the year: “With December production poised for a typical seasonal slowdown, inventory should end the year around the 60-day norm,” Citi analyst Itay Michaeli wrote in his report.

GM’s answer? GM says everything is fine, they are bulking up for a strong 2012. Jim Bunnell, general manager of GM’s dealer networks, doesn’t “want to leave anything on the table. We don’t want to be short.”

The other old and new automakers are a bit more cautious.

Ford has a 71 days’ supply.

Chrysler Group LLC has a 79 days’ supply.

Both higher than the industry, but not alarmingly so.

GM desperately needs better news, and cars stuffed into the channel are considered and reported as sold. For the first 11 months, GM’s sales rose only 7 percent. Whereas Ford rose 19 percent and Chrysler 17. In November, GM’s ”sales,” despite an overstuffed channel, rose only 12 percent. Ford’s sales went up 20 percent and Chrysler’s 17 percent.

What’s more, GM could be within spitting distance of the world’s number one carmaker, Toyota. When global production numbers are counted, it will most likely be a photo finish this year, and every car made counts – even if it sits around unsold.

Good year-end numbers would be good for the newly minted stock. Overstuffing could also be its undoing. “If they don’t get it, then Wall Street will punish them in January,” said Warren Browne, a retired GM executive who now runs his own firm, WP Browne Consulting LLC.

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New Research Reveals: Your Father’s Oldsmobile Was Designed By A Sex-Obsessed Pervert http://www.thetruthaboutcars.com/2010/11/new-research-reveals-your-father%e2%80%99s-oldsmobile-was-designed-by-a-sexpervert/ http://www.thetruthaboutcars.com/2010/11/new-research-reveals-your-father%e2%80%99s-oldsmobile-was-designed-by-a-sexpervert/#comments Sat, 27 Nov 2010 10:35:49 +0000 http://www.thetruthaboutcars.com/?p=374610 Arthur Ross started in 1935 as a „Creative Designer” at GM. He did Cadillacs and Buicks. He had a hand in drawing the lines of some famous cars of those times, the Cadillac Sixty Special, LaSalle, Fleetwood, and the Buick Y-Job, GM’s first concept car. He also was a pervert. Now don’t get me wrong. […]

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Arthur Ross started in 1935 as a „Creative Designer” at GM. He did Cadillacs and Buicks. He had a hand in drawing the lines of some famous cars of those times, the Cadillac Sixty Special, LaSalle, Fleetwood, and the Buick Y-Job, GM’s first concept car. He also was a pervert.

Now don’t get me wrong. Where I come from, “pervert” is a honorific, and I have been to certain parties where the host proudly walked around with a red sash, inscribed “Hentai-ou.” Which is Japanese for something like “King of the perverts.” All in attendance bowed to him. It’s a Japanese thing.  I’m familiar with harder core environments also.  I worked for Volkswagen during a certain period.  (“Bertel, how many girlfriends do you have?” “Two.” “Sorry, you don’t qualify for a board seat. Get some more.”) But let’s get back to Art Ross.

During the war, Ross was assigned to GM’s Camouflage and War Services Section. War over, he became Chief Designer of Cadillac, then Oldsmobile. Those were the golden years of American car design, and in fourteen years as Chief Designer, Ross literally changed the shape of the industry. In 1958, Ross left GM and started his own design house, Arthur Ross Associates. Remember the Parker Pen? A Ross design. Arthur Ross died in Chicago in 1981.

His estate contained a large body of art Ross had drawn, painted, airbrushed, and magic markered in his free time (and possibly during boring conferences.) It came in two genres.

His traditional art, including portraits, surrealistic paintings, and a treasure of car designs can be found at The Art Of Art Ross.com.

His, how shall I say this, more eclectic art is found at Erotica By Art Ross. Now let me warn you that this is not for the faint of heart. I had to do hours of painstaking research, sifting through his complete body of naked bodies, engaged in various activities, before I found one (and only one) image that is barely SFW. This is Thanksgiving weekend, you are not supposed to be working. You are safe unless your wife has installed snitching software on your home PC. In that case, she already knows about your activities. But once you click on Erotica By Art Ross, you see stuff your mother didn’t dare to warn you about. You have been warned now. I don’t want to hear any complaints.

Ross’s work reflects his fantasies of statuesque blondes, with the occasional BBW thrown in. His most prolific and most pornographic period was during the WW II time – designing new camouflage patterns obviously wasn’t challenging enough to keep his wandering mind focused.

So now we know it: Your father’s Oldsmobile was designed by a dirty young man.

(Side story: I wouldn’t have known, would I not have received mail from our in-house connoisseur of fine Detroitophilia, from our buff-book buff, Mr. Ronnie Schreiber. Strangely, he shied away from writing the piece himself, saying “I figured that it was suitable for B&B (Bertel & Baruth). I’ve only looked at just the home page, so I disclaim any blame if you find something offensive, or not offensive enough.” Sure, Ronnie. I just loved those erudite Playboy interviews.

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Akerson: BMW Better Than Cadillac http://www.thetruthaboutcars.com/2010/09/akerson-bmw-better-than-cadillac/ http://www.thetruthaboutcars.com/2010/09/akerson-bmw-better-than-cadillac/#comments Thu, 09 Sep 2010 12:05:50 +0000 http://www.thetruthaboutcars.com/?p=365181 When you start a new job, it’s considered important to make a good impression. How does the saying go? “Start as you mean to go on”. Well, Dan Akerson, I suspect, tried to heed that advice and ended up putting his foot in it. The Associated Press reports that Dan Akerson, CEO of Government (soon […]

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When you start a new job, it’s considered important to make a good impression. How does the saying go? “Start as you mean to go on”. Well, Dan Akerson, I suspect, tried to heed that advice and ended up putting his foot in it. The Associated Press reports that Dan Akerson, CEO of Government (soon to be “General” again) Motors, presented a webcast to GM employees. The usual CEO rhetoric came out. “GM needs to keep competitors on their heels rather than responding to what they do” said one GM worker, who asked not to be identified as the broadcast was not available to the public; despite being owned by them. “Attack mode” was another phrase used. But then Mr Akerson said that GM’s Cadillac brand has to make cars that are better than BMW’s. Now I thought this was quite a harmless statement to make. The CEO set a (quite high) benchmark to beat. Sounds reasonable, right? Not according to some.

The comment drew the ire of USA Today. As the article said, “How sad if he really said that. He’s echoing the out-of-date bias of many car shoppers. Cadillac, data show, already is better than BMW.” Blimey! Calm down, lads! The article then goes on to quote J.D Power and Associates’ Initial Quality Study (IQS) and Vehicle Dependability Study (VDS). In those studies, Cadillac ranks higher than BMW nearly every year. USA Today then starts ranting about how even “bad” GM (their word, not mine) beat BMW.

“In IQS scores back to 2005, Cadillac finished as high as third of some three dozen brands surveyed, and no worse than 13th (except for 25th in 2007). BMW, meantime, ranked 3rd back in 2005, but since then no better than 16th of about three dozen brands. (The exact number surveyed varies by one or two each year.)”

On the VDS, they mentioned that Cadillac, apart from years 2005 and 2007, beat BMW. Then things started getting hot under the bonnet.

“Sure, but BMW will blow the doors off Cadillac, right? Apparently not. In a “run what ya brung” challenge race last October, Caddy’s CTS-V took first, second and third. The highest-finishing BMW was an M3 in fourth. BMW declined at the time to send a factory-backed car and driver because it was a GM-sponsored event rather than a neutral competitive setting. Still the showdown was open to all production-stock (unmodified) cars, so, theoretically at least, it was a fair fight.”

Now whilst these are all valid points, there’s one point which USA Today doesn’t mention. In August 2010, The US public bought 12,689 Cadillacs. In comparison, 19,450 BMW’s were purchased. So, even with those points which USA Today raised, the US public isn’t buying it, literally. But, I think that USA Today was extremely harsh. I don’t think Dan Akerson meant anything by that comment (if he did say it, GM won’t confirm it). I like bashing a GM CEO as much as the next person, but give him a chance!

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