The Detroit News reports U.S. District Judge Nelva Gonzales Ramos delivered a six-page ruling in favor of General Motors, saving the automaker from issuing a “park it now” order that would have proved costly both financially and in reputation. Had the order gone forward, it would have set a precedent that not even the National Highway Traffic Safety Administration could attempt in its limited penalty power. The attorney representing the plaintiffs in the lawsuit for the order, Robert Hilliard, may appeal.
Isn’t the Internet wonderful? Now industry types can trade barbs directly, without going through unreliable journalists. Ed Whitacre still needed to write a book (or more like he had it written) to put down Bob Lutz, Dan Akerson et al. Bob Lutz, however, has his own blog, hosted at Forbes, and boy does he take revenge on Whitacre: (Read More…)
Ed Whitacre, the former CEO of General Motors in the post-bailout era, penned an op-ed in the Wall Street Journal urging the U.S. Treasury to sell its shares in General Motors “as quickly as possible”.
Editor’s Note: GM’s outgoing Chairman/CEO Ed Whitacre sent the following email to GM’s senior executives today [via Detroit News]
My goal in coming to General Motors was to help restore profitability, build a strong market position and prepare this iconic company for success. While we have more to do, it is fair to say that GM is headed on that path. Our earnings for the last two quarters show that. Our strong sales show that. And the enthusiasm from everyone I meet at GM shows that.
We are on the right track. And I have complete confidence that Dan Akerson will keep us moving forward. Dan is committed to GM; he’s been a key player in the decisions our Board has made over the last year. He will do a great job, and deserves your complete support.
I have enjoyed my time as CEO of GM more than I can say, and I am pleased to stay on as Chairman through the end of the year. I am excited about this company, and I want you to know that it is the people of GM who make this a very special place. You are the best, and I truly appreciate all you do.
Thank you for the privilege of leading this great company. I am anxious to see the new heights that you will achieve as you continue focusing on designing, building and selling the world’s best vehicles.
From the moment GM’s Chairman Ed Whitacre took over for Fritz Henderson as CEO, many wondered how long the 68-year-old Texan would stick around. Apparently GM’s board was not immune from such uncertainty either, as Bloomberg reports that it gave Whitacre an ultimatum: commit to the long haul or get out now. According to reports, several Wall Street banks asked Whitacre whether he would be leading GM long-term during pre-IPO meetings. Whitacre didn’t answer at the time, but the pressure from Wall Street clearly pressed the board’s hand. Since Whitacre ultimately didn’t want to stick around for an extended term (posibly due to the Treasury’s unwillingness to dump all of its stock during GM’s IPO), the board picked Dan Akerson to take over. But how will an unexpected handoff to an unknown executive with no industry experience affect GM’s IPO? (Read More…)
One might imagine that GM wouldn’t want to scare anyone away from its forthcoming IPO, but triskadecaphobes might just want to sit this one out. With a $5b credit line reportedly secured from a group of “at least 15” banks, Reuters [via Automotive News [sub]] reports that GM could file its S1 with the SEC as soon as tomorrow. In case that date is too pregnant with superstition, GM could wait until next Monday to file paperwork. Either way, GM is expected to go public by the Thanksgiving holiday. (Read More…)
GM Chairman/CEO Ed Whitacre just announced during GM’s Q2 financial conference call that he will step down as CEO on September 1, and as Chairman at the end of 2010. GM board member Dan Akerson will take over both of Whitacre’s position. Whitacre called Akerson “very involved” and said he expects a smooth transition. Whitacre planned to leave after “returning GM to greatness,” and says that “with a good foundation in place,” he’s ready to leave. The board’s been aware of Whitacre’s plan, and the board was ready to act when Whitacre said he was ready to step down. Akerson says he and Whitacre “share a vision” for GM, so instead of setting an agenda now, he’s focusing on a smooth transition. Akerson noted that Whitacre “had made some management changes” already, and he’s confident in his “deep bench.” The major transition, he says, “is me,” because he needs to gain a day-to-day, operational perspective on the business.
[Editor’s Note: The following is the transcript of a speech given by GM Chairman/CEO Ed Whitacre today at the Center For Automotive Research’s Management Briefing Seminar (via GM Media)]
Thanks, Dave [Cole], and good afternoon. It’s a pleasure to be here…and it’s no wonder why you picked this location.
This really is beautiful country up here. And as a Texan, it pains me to say this, but it’s true…your lake really is bigger than any lake in Texas.
This is my first time at this conference, so I hope you will take it easy on me. You were nice enough to invite me last year…but at the time, I was still trying to figure out my way around the RenCen without getting lost.
Well, how’d you like to have a brand-new Chevrolet Corvette?
With that line, GM CEO Ed Whitacre keeps GM’s streak of giving Corvettes away to well-compensated guys alive in a speech at the Austin Chamber of Commerce. When Whitacre asked the chairman of the chamber and president of Tokyo Electron US Holdings Barry Mayer what kind of car he drove, Mayer responded that he drove a Lexus. That’s hardly a surprising response, points out the Freep, given that Mayer is the head of a Japanese company’s US operations. But it surprised and embarrassed Whitacre enough to drop some Corvette keys in Mayer’s lap and offer discounts on GM cars to everyone else in the audience. Because chambers of commerce are, after all, the truly needy. Besides, it’s just tax money…
Ed does things that are bolder and bigger rather than small and timid. All things being equal, Ed would like it bigger versus small. But all things aren’t equal. He needs to get the government the best value for its stake, too.
Former AT&T exec James Kahan tells BusinessWeek what kind of IPO GM’s Chairman would prefer. Unfortunately for “Big Ed,” that’s not up to him. GM’s value must be determined by the market, and due to political pressure on the government to end its ownership of GM and Chrysler, it will have to happen as soon as possible. A fourth-quarter IPO with “about half of the government stake [being sold] to the 20 top institutional investors” is in the cards. So we know the government won’t get out of GM entirely in the IPO… but how much will the market give the Treasury for half of its 61 percent stake?
Doubtless somewhat shocked and surprised about GM Chairman/CEO/Non-Car-Guy Ed Whitacre’s decision to take over product planning responsibilities, Automotive News [sub] did some digging into the decision, and offers a full report. According to AN’s GM sources, the decision comes down to one fundamental goal: holding lower-tier executives accountable for decision making. By reducing executive reviews of forthcoming vehicles by one third, or about four times per development cycle, lower-level executives and engineers will have more freedom to make decisions, and will spend more time developing and less time preparing data for executive reviews. And lest you think this decision doesn’t merit your attention, consider this: though GM’s bureaucracy had created incredibly long lead times, most automakers hold about ten executive reviews per new product. By cutting to four, GM is taking something of a step into the unknown.
The executive shake-ups show no signs of stopping at GM, as Ed Whitacre ended the week with yet another re-shuffle. And this time Whitacre himself is the big winner. Automotive News [sub] reports that Whitacre has assumed control of GM’s global product planning, leaving former planning boss Tom Stephens with the more prosaic responsibility of overseeing new product development. Whitacre will be assisted by new VP for product planning Steve Carlisle, who, unlike Whitacre, actually has some experience in product planning. Carlisle replaces Jon Lauckner, who will head up GM’s new venture capital unit. But the big news here is that a man who only just learned the term “segment” about five and a half months ago, is now in charge of GM’s global product planning. Quick learner or egomaniac?
Well, the suspense is over. General Motors announced its Q1 earnings this morning, and for the first time since 2007 the quarterly numbers are positive. GM’s net revenue jumped to nearly $31.5b on strong performances from its North American and GM International Operations (GMIO), and across-the-board sales improvement for the Chevy brand. General Motors Europe was The General’s sole unprofitable division for the quarter, losing half a billion dollars while it waits for a deal on financial assistance to clear. Operating cash flow was $1.75b, with about $755m of that going towards capital expenditures. That left just under a billion dollars in free cash flow, as GM finished the quarter with $35.7b in cash on hand. Net income attributable to shareholders was $1.068b, less $203m for cumulative dividends, for a total net profit of $865m [Full financial highlights in .doc format available here].
GM’s now-infamous advertisement touting the payback of government loans “may have elasticized the reality of things,” in the words of Steve Rattner, but stretching the truth apparently pays off. Automotive News [sub] reports that a London public perception-tracking firm surveyed some 5,000 consumers, and found that The General’s image has improved since the ad started running. Of course, on YouGov’s brand image scale of 100 to negative 100, GM is up only five points to “17.” Clearly there’s still work to do.