The Truth About Cars » Czar http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 11 Sep 2014 23:24:13 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.2 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 is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Czar http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com GM Chairman Ed Whitacre: Fitting In Already http://www.thetruthaboutcars.com/2009/11/gm-chairman-ed-whitacre-gm-ipo-doa/ http://www.thetruthaboutcars.com/2009/11/gm-chairman-ed-whitacre-gm-ipo-doa/#comments Wed, 11 Nov 2009 14:58:21 +0000 http://www.thetruthaboutcars.com/?p=334938 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. […]

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Walkin' boss.

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.

Whitacre shot down his own not-so-highly-paid executives’ promises of a 2010 GM stock offering—the planned method for returning U.S. taxpayer’s $52 billion (plus) investment in GM. “It depends on how quickly we become profitable. I think we can see that on the horizon, but I can’t promise a date.”

Now that’s what I call GM speak! Lots of promises, no firm targets and zero accountability. Looks like Ed’s fitting right in.

Oh, and don’t worry about that dropped IPO. Ed’s gonna maybe kinda sorta ensure that GM makes an unspecified payment to the feds at some unspecified date (ahead of the 2010 mid-term elections, presumably). “It’s conceivable we could pay back some of the loans before the end of the year,” he kinda sorta maybe promised.

Now that’s what I call GM speak! Lots of promises, no firm targets and zero accountability. Looks like Ed’s fitting right in.

Oh, and don’t worry about that cultural change thing. Whitacre said GM isn’t “rushing” to hire outside executives. “GM has made several inside changes recently,” the Detroit News paraphrases, “and the move to bring in new blood will be meted out slowly, he said, without giving timing.”

Now that’s what I call GM speak! Lots of promises, no firm targets and zero accountability. Looks like Ed’s fitting right in.

Oh, and don’t worry about all that talk about increasing market share. Despite his insistence upon protecting GM’s piece of the American new car sales pie, Ed says GM hasn’t set a specific market share goal and doesn’t want to add significantly to incentives. “We are just looking at ways to sell more vehicles, and it’s a very competitive market. We need to strike a balance.

Now that’s what I call GM speak! Lots of promises, no firm targets and zero accountability. Looks like Ed’s fitting right in.

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Bailout Watch 377: Cash For Clunkers Pulled From Stimulus Bill http://www.thetruthaboutcars.com/2009/02/bailout-watch-377-cash-for-clunkers-pulled-from-stimulus-bill/ http://www.thetruthaboutcars.com/2009/02/bailout-watch-377-cash-for-clunkers-pulled-from-stimulus-bill/#comments Fri, 06 Feb 2009 17:46:44 +0000 http://www.thetruthaboutcars.com/?p=241652 CNN Money reports that Sen. Tom Harkin (D-IA) has pulled the “Clunker Culling” proposal from the economic stimulus plan making its way through Congress. The provision would have provided up to $4,500 in tax credits for scrapping a used vehicle with under 18 mpg and replacing it with a new car. The bill would have […]

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CNN Money reports that Sen. Tom Harkin (D-IA) has pulled the “Clunker Culling” proposal from the economic stimulus plan making its way through Congress. The provision would have provided up to $4,500 in tax credits for scrapping a used vehicle with under 18 mpg and replacing it with a new car. The bill would have cost taxpayers up to $16b, according to CNN, which notes that lack of support from Republicans doomed the bill. Why? Apparently, “the provision required that the [new] vehicle be assembled in the United States.” Who knows, maybe common sense even had anything to do with it. President Obama did not take a strong position on the Clunker provision according to the Detroit News, but he is vocally backing $2b in battery development spending and a $600m purchase of fuel-efficient cars for the government fleet.

“Critics of this plan ridiculed our notion that we should use part of the money to modernize the entire fleet of federal vehicles to take advantage of state-of-the-art fuel efficiency. This is what they call pork,” Obama said in a speech at the U.S. Energy Department in Washington. “You know the truth,” the president said. “It will not only save the government significant money over time, it will not only create manufacturing jobs for folks who are making these cars, it will set a standard for private industry to match.”

Meanwhile, the Wall Street Journal reports that by not naming a Car Czar, Obama is delaying efforts to negotiate an agreement with the UAW and GM/Chrysler bondholders. The deadline for a Car Czar appointment is less than two weeks away, and Chrysler’s Jim Press says his firm isn’t even in talks with bondholders. Obama has teams in the Treasury and National Economic Council working on the auto industry issue, and the WSJ’s unnamed source says, “we assume and expect that the companies will bring forward restructuring plans consistent with the terms of loan agreement on Feb. 17, and if they are not able to meet those terms we expect them to present an explanation for why that’s the case.” According to one GM executive interviewed, “apparently, a lot of candidates do not want that (Czar) job.” Great.

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Bailout Watch 374: Obama Admin Favors Multiple Car Czars http://www.thetruthaboutcars.com/2009/02/whats-wrong-with-this-presentation-czarevitch-edition/ http://www.thetruthaboutcars.com/2009/02/whats-wrong-with-this-presentation-czarevitch-edition/#comments Thu, 05 Feb 2009 19:55:38 +0000 http://www.thetruthaboutcars.com/?p=240581   An increasing number of media reports are indicating that instead of a single “car czar,” Obama will appoint a team to oversee the auto industry turnaround effort. Current reports indicate that Democrat fundraiser Steve Rattner will likely take the top oversight position, but his total lack of (non-political) qualifications for the job is considered […]

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An increasing number of media reports are indicating that instead of a single “car czar,” Obama will appoint a team to oversee the auto industry turnaround effort. Current reports indicate that Democrat fundraiser Steve Rattner will likely take the top oversight position, but his total lack of (non-political) qualifications for the job is considered an issue. Which is where Stephen Girsky comes in. “They clearly need an adviser who knows the industry,” former Chrysler president Thomas Stallkamp tells Bloomberg. “Girsky certainly knows the industry, and he was close to both GM and the union.” And though I have questioned whether Girsky’s UAW affiliations are best described in the past or present tense, this 2004 presentation (PDF) to Original Equipment Suppliers Association is decidedly prescient. Especially for 2004. And this December 2008 presentation to UAW Local 14 seems to indicate that his recent advising stint with the UAW was a mission of truth and reconciliation rather than one of conniving and obfuscation.

Of course, no matter how TTAC-ish Girsky is, if he’s answering to a wannabe media mogul who just happened to raise $100k for Obama, there’s no knowing what the result might be. Especially considering that Rattner is embroiled in a dispute with Chrysler’s and GMAC’s owner (Cerberus) over a $125m loan his private equity fund received from Cerberus to purchase Maxim Magazine. Seriously. “It’s crazy,” one surprised source familiar with the money squabble tells the NY Post. “Cerberus is about to foreclose on the loan to Quadrangle, and now Steve Rattner is going to be the boss of Cerberus.” Crazy indeed.

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Bailout Watch 372: The Man Who Would Be Czar http://www.thetruthaboutcars.com/2009/02/bailout-watch-371-the-man-who-would-be-czar/ http://www.thetruthaboutcars.com/2009/02/bailout-watch-371-the-man-who-would-be-czar/#comments Wed, 04 Feb 2009 18:39:59 +0000 http://www.thetruthaboutcars.com/?p=239102

Point three of Barack Obama's ethics pledge to the American people is that "no political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration." Obviously that's a high standard, and one that seems increasingly important as the lines between government and industry are blurred by rampant bailouts. And clearly not everyone makes the cut. But as Obama assembles a team to "restructure" the auto industry, the spirit (if not the letter) of his ban on revolving door hiring seems to be falling by the wayside.

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Point three of Barack Obama’s ethics pledge to the American people is that “no political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration.” Obviously that’s a high standard, and one that seems increasingly important as the lines between government and industry are blurred by rampant bailouts. And clearly not everyone makes the cut. But as Obama assembles a team to “restructure” the auto industry, the spirit (if not the letter) of his ban on revolving door hiring seems to be falling by the wayside.

According to the Detroit News, the leading candidate for Obama’s “Car Czar” position is a certain Mr Steven Girsky, who the DetN describes as a “longtime auto industry analyst.” Having advised Centerbridge Industrial Partners and JP Morgan on auto issues, Girsky is more than simply an analyst. Automotive News [sub] reported in October of 2008 that Girsky was hired by the United Auto Workers to advise on the proposed Chrysler-GM merger and as AN dryly put it “he may also advise the UAW on a possible federal bailout of the U.S. automakers.” Girsky was also a consultant to GM’s CEO and CFO for just under a year, leaving the firm in 2006. As of October 2008, he also served on the board of Dana Corp, a massive auto supplier firm.

Does Girsky’s experience make him incapable of living up to Obama’s high moral standards? Technically, no. Like Tom Daschle before him, Girsky is clearly a lobbyist, though he’s not registered as one (the de facto bright line rule for Obama). But having been paid by the UAW within months to advise them on bailout strategy, he’s also clearly not going to live up to the “no work on regulations or contracts directly and substantially related to their prior employer for two years” standard. And if he is appointed as Car Czar, it’s safe to say that he will be guiding regulations and money disbursements that are “substantially related” to the work he has been doing for the UAW.

But as with so many political decisions, the choice of a Car Czar will likely be decided on the lesser of two evils. After all, Girsky may be steeped in the cozy relationships between GM management, the UAW and the government, but at least he has industry experience. Steven Rattner of Quadrangle Group has also been named as a possible czar, but as Newsweek reports, his main qualifications appears to be as a Democratic fundraiser (he is married to the National Finance Chairwoman of the DNC) and media-elite insider. Sure he covered energy and economy beats at the NY Times back in the day, but there’s little to indicate that he would make an especially good Car Czar.

Meanwhile, for all of Girsky’s industry connections, some of his ideas are decidedly TTAC-ish. Like when he got AN Executive Editor Edward Lapham‘s collar up by suggesting [sub] that the Detroit Three might need to cut as many as 70 percent of its dealerships. He even seems to cause some consternation among his UAW employers, based on this post at Salon. And that might just indicate the kind of experience and perspective that Obama’s team clearly needs. After all, his Climate and Energy Czar Carol Browner told Automotive News [sub] at the DC Auto Show that there are “lots of clean cars out there and options for the consumer.” You know, because the OEMs say so.

Meanwhile, it seems that nothing will stop or slow the rolling tide of money that is about to slosh into the automotive industry. $2b worth of battery research money is said to be going into the forthcoming stimulus package, and the Senate just approved an amendment to the stimulus bill which would make auto loan interest and state sales taxes deductable from federal taxes. Whether Girsky or Rattner is appointed as Car Czar won’t likely make much of a difference in terms of the amount of money that will be funneled into the industry over the following years. The crucial distinction is whether experience is worth the possibility of a conflict of interest.

Obama’s strict ethical standards are admirable, but if his options for Car Czar are between an industry insider who defines the term “revolving door” and a candidate who is being considered solely due to his political connections, something has clearly gone wrong. I’m not sure this kind of compromise is what people had in mind when they voted for “change we can believe in.” But in this familiarly frustrating choice, at least Girsky has a record of taking stands on crucial issues facing the industry. If he can publicly explain his recent UAW dealings in a way that passes Obama’s muster, Girsky may actually be the least of the available evils.

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