GM dérape vers la faillite

[ErickMontreal]

GM : Hummer serait bientôt Chinois

* Olivier Schmouker, Lesaffaires.com

* 13:45

 

La cession de Hummer s'élèverait à quelque 500 M$ US.

 

General Motors aurait cédé sa marque Hummer à un groupe industriel chinois qui rêve de se lancer dans la construction automobile. Il s'agirait de la Sichuan Tengzhong Heavy Indutrial Company, selon le New York Times.

 

Le quotidien américain tient sa source d'une personne proche du gouvernement chinois, lequel a le droit d'opposer son veto à la transaction. Cela expliquerait pourquoi la direction de GM n'a toujours pas divulgué l'identité de l'acquéreur de Hummer.

 

"Nous ne sommes pas aujourd'hui en mesure de donner le nom de l'acheteur" de Hummer. "Cela faisait partie de l'accord", a précisé le directeur général de GM, Fritz Henderson, sur la chaîne CBS.

 

Différents experts interrogés par le NYT estiment que la transaction pourrait s'élever à 500 millions de dollars américains. Pas plus, car les Hummer traînent la réputation d'être des véhicules polluants et gros consommateurs d'essence, tout ce que rejettent aujourd'hui les consommateurs nord-américains.

 

16 acheteurs potentiels pour Saturn

 

De plus, la direction de GM a fait savoir que 16 acheteurs potentiels ont manifesté leur intérêt pour la marque Saturn, et trois pour Saab.

 

Le géant de l'industrie automobile qui est sous la protection de la cour envisage de vendre ou de se départir des marques Saab, Hummer, Saturn et Pontiac afin de réduire sa taille tout en reprenant du tonus.

 

Hier, General Motors a demandé à se placer sous la protection de la loi américaine sur les faillites en échange d'un plan de restructuration draconien. GM porte une dette de 172,81 milliards $ US et 82,29 milliards $ US d'actifs.

 

GM peut disposer sans délai de 15 milliards de dollars d'aide

 

General Motors peut disposer sans aucun délai de la moitié de la nouvelle aide accordée par le gouvernement américain pour aider à sa restructuration, soit 15 milliards de dollars, a précisé un juge hier en fin de journée.

 

Le juge américain Robert Gerber a donné son aval aux 33,3 milliards de dollars (23,5 milliards d'euros) octroyés par l'administration Obama un peu plus tôt. La moitié de la somme peut être accessible dans les trois prochaines semaines pour le constructeur automobile.

 

Robert Gerber se prononcera le 25 juin sur la viabilité financière du plan de restructuration draconien, piloté et financé par l'Etat que devra présenter GM, un nouveau GM, allégé et capable d'affronter la concurrence. L'audition concernant la vente de certains de ses actifs aura lieu le 30 juin.

[MTLskyline]

^That's not good news if we ever become involved in an armed conflict with China!

 

Some good news (or less bad than expected) has emerged though (US numbers):

 

http://www.autoblog.com/2009/06/02/by-the-numbers-may-2009-gm-and-ford-surprise-edition/

 

GM and Ford were both hit much less hard than expected. This month, the Japanese big 3 were not far behind Chrysler's rapidly decreasing numbers.

[MTLskyline]

Drove a Chevy Impala today, I have to say that I was very impressed! It really absorbed the bumps on the road well. If I was in the market for a large sedan I would definitely consider it.

[WestAust]

^That's not good news if we ever become involved in an armed conflict with China!

 

If you're thinking about the military humvees, they have nothing to do anymore with the hummer brand that GM is selling, basically GM acquired a licence from AM General for the hummer name to turn it into a brand.

[MTLskyline]

GM reaches deal to sell Saturn to Penske

 

David Bailey, Reuters

 

A group of investors including Black Oak Partners LLC says it has approached General Motors Corp. about buying its Saturn division as the Detroit automaker works to get smaller and shed brands.

 

DETROIT -- General Motors Corp has a reached a preliminary agreement to sell its Saturn brand to Penske Automotive Group in a deal that could preserve more than 350 dealerships and 13,000 jobs, the companies said Friday.

 

The tentative deal for Saturn, which the companies hope to complete in the third quarter, is the second sale of a brand announced by GM since it filed for bankruptcy on Monday in an effort to drop unprofitable lines and leave court protection as a leaner company.

 

Penske, the No. 2 U.S. auto dealership group, would acquire rights to the Saturn brand and other assets, while bankrupt GM would continue production of the Saturn Aura, Vue and Outlook on a contract basis if the transaction is completed, GM and Penske said.

 

GM created Saturn in 1984 to compete with Japanese vehicles in terms of quality and service and initiated no-haggle flat-price sales for its models. The Saturn brand has languished for the last decade, and GM said in February that it would either be spun off or shut.

 

GM had said that more than a dozen buyers had expressed interest in the Saturn brand and its retail network. Penske had also said it was interested in the Saturn brand in early May.

 

On Tuesday, GM announced plans to sell its Hummer brand to a little-known Chinese heavy equipment manufacturer Sichuan Tengzhong Heavy Industrial Machinery.

 

© Thomson Reuters 2009

http://www.financialpost.com/news-sectors/story.html?id=1666172

 

I guess this is good news, at least it stays in American hands. Also nice to see that GM will contract out current Saturn models for Penske.

[ErickMontreal]

Right Wing threatens to launch boycott of “Government Motors.”

 

 

by Paul A. Eisenstein on Jun.04, 2009

 

GM Boycott?We live, it’s often pointed out, in a polarized society, and few things, of late, have been more divisive than the debate over the federal bailout of General Motors and Chrysler.

 

When first proposed, late last year, surveys found a solid majority of Americans opposed to using billions of taxpayer dollars to prop up the two financially floundering manufacturers. And though that position is beginning to soften, there are still “certain parts of the country that do not like the concept,” concedes GM Chief Financial Officer Ray Young.

 

In fact, among the hardcore right wing, that opposition appears to be increasing, for any number of reasons, not all of which is specifically due to the issues of saving the automakers. Nonetheless, the bailout is triggering a backlash that has some arch-conservatives calling for an all-out boycott of the makers, and especially of “Government Motors,” as critics call it, which will emerge from bankruptcy with the Treasury Department holding more than 60% of the “new” GM’s stock.

 

Among those who have given voice to the idea of a boycott is the conservative host Hugh Hewitt, who made the bailout a pet peeve on his nationally-syndicated talk radio show, as well as in the blog he posts on the website, Townhall.com.

 

Subscribe to TheDetroitBureau.com“In the two days since the nationalization of GM was announced, the callers and e-mailers to my program have been 10 to 1 against the Obamaization of the American car business,” contended a June 3rd posting, by Hewitt, who added that, “This is a decision that must be reversed. GM must be denationalized.”

 

How?

 

“Individual Americans have a role to play,” argued Hewitt, echoing on-air comments. “They have to say no to GM products and services until such time as the denationalization occurs,” he wrote, concluding that, “every dollar spent with GM is a dollar spent against free enterprise.”

While a boycott petition is circulating on the Internet, there have so far been few signing up. And whether any of those folks actually are in the car market is unknown.

 

While a boycott petition is circulating on the Internet, so far few are signing up. Whether any of those folks are in the car market is unknown.

 

Hewitt is by no means alone. The boycott theme is quickly spreading across the conservative talk radio world, as well as on websites like the one operated by the rightist Washington Times, where comments like this one from “HanoverMan,” suggested there were at least some potential buyers ready to listen.

 

“Once the UAW becomes part of the ownership group, I will never buy another GM again - ever,” wrote HanoverMan, in response to a poll by the paper asking readers whether they think the ailing automaker “will ever regain its footing as a national icon?” The results, by the way, showed 84% of respondents answering “no.”

 

Will the critics make a boycott stick, potentially strangling the new GM right from its inception, thereby hurting U.S. taxpayers, or is is this tale, as William Shakespeare wrote, “full of sound and fury, signifying nothing?

 

When asked if he fears the call for a boycott will cut into sales, GM’S CFO Young said, “I don’t think so,” adding that, “I believe the vast majority of Americans want us to succeed. They want the hometown team to succeed.”

 

For his part, analyst Jim Hall, of 2953 Analytics, cautioned that, “You always worry when people are organized against you, but,” Hall stressed, “you’re talking about a small wing of a party that’s imploding.”

 

Indeed, there’ve been a number of efforts organized, over the years, against major corporations. Only a few have had a measurable impact. Others, such as the one built around claims that Proctor & Gamble’s logo signified devil worship, have made plenty of noise, but not much more than that. At first, Ford Motor Co. appeared to buckle under when Rev. James Dobson, the controversial founder of Focus on the Family threatened a boycott because the automaker was advertising in various homosexual publications. The company quickly reversed course and risked the wrath of ecumenicals when it renewed much of that advertising - but ultimately, the threat fizzled out.

 

And, added several observers, in today’s polarized environment, a call for a GM boycott by the right wing could actually win the automaker some sympathy in more liberal parts of the country - communities like San Francisco - which have typically had their own biases against domestic auto brands.

[GoMontreal]

Wow, that article is quite biased. Why is it that lefties always mention the right as extreme. It's like everyone that is on the right is extreme and there are no non-extreme right wingers. Interestingly, I rarely hear of extreme-left, yet, there are people on the left that are just as extreme (if not more) than the right-wing extremists.

 

I can't stand bias in the news, it makes me distrust the news and consider that the 'facts' they are presenting are tainted. This article is not useful for that reason.

[ErickMontreal]

General Motors fermera Saab

Alexandre Paillé . les affaires.com . 18-12-2009

 

General Motors a annoncé l'échec des discussions qui avaient cours avec la néerlandaise Spyker Cars pour la cession de sa division suédoise Saab, en ajoutant que cette dernière sera fermée de façon ordonnée.

 

«Nous allons travailler en étroite collaboration avec Saab pour arrêter les activités de la société de façon ordonnée et responsable», a déclaré le président des activités européennes de General Motors, Nick Reilly.

 

L’échec des négociations avec Spyker Cars est essentiellement dû aux mesures d'examen des comptes exigées pour conclure la transaction qui ne pouvaient pas être résolues à temps, selon la direction de General Motors. GM ajoute que Saab avait besoin d'une issue rapide des négociations pour poursuivre ses opérations.

 

La fermeture de Saab n’est pas une surprise puisque le chef de la direction du géant de l'automobile, Ed Whitacre, avait indiqué récemment qu’en l’absence d’un accord avec Spyker Cars, GM fermerait purement et simplement Saab.

 

GM a précisé que Saab continuera d'honorer ses garanties aux consommateurs et de leur fournir du service et des pièces de remplacement.

 

La compagnie de Detroit a précisé qu'elle s'attend à ce que ce dernier développement n'ait pas d'impact sur la vente de certaines activités de Saab à la chinoise Beijing Automotive Industry Holdings tel qu'annoncé la semaine dernière.

 

Saab emploie actuellement au total 4500 personnes.

 

Avec Associated Press

[MTLskyline]

How Rick Wagoner Lost GM

GM's ex-CEO threw out the good-governance structure in place when he took over, then made bad decision after bad decision, backed by his rubber-stamp board

 

By Jeffrey A. Sonnenfeld

 

General Motors' legendary management system and industrial might were once revered by management scholars and business historians; the thought of bankruptcy would have been beyond improbable and indeed laughable. Yet now the automaker has joined the list of giants that have been forced to file for Chapter 11, and this once-unthinkable event is being met with cries for accountability.

 

When we look at the fall of General Motors, surely the culpability for failure can be attributed to a combination of factors: specific leaders' blind spots, the intransigent culture of the company, and a governance process that allowed those charged with oversight to agree to antiquated labor/management cost concessions and demonstrate a collective tin ear about consumer disdain, shareholder frustration, and analyst troubleshooting. However, despite complex institutional factors accounting for GM's collapse, Rick Wagoner, the CEO who reigned at the time of the bankruptcy, will be known as the man who lost GM.

 

Certainly, many observers would say the die was cast long ago by former CEO Roger Smith, who was behind the wheel from 1981 through 1990. Smith was just one of a long line of "finance men" selected to lead the engineers and marketing executives known as the "car guys" (a tradition that dated back to Frederick Donner in 1958). Smith's disastrous attempts to reorganize GM's bureaucracy in the 1980s had a lingering effect. A belated effort to respond to increasing Japanese competition in the smaller car market resulted in GM's introduction of the unpopular, unattractive X-cars.

 

The clustering of eight business units into a big-car and a small-car division was supposed to spark efficiencies and cross-divisional unity, but the result was internal sparring and lookalike cars with varied name plates. A $9,000 Pontiac was hard to distinguish from a $25,000 Cadillac. This was especially disastrous to the luxury market, where GM resorted to bumper extensions and extra chrome for cosmetic decorative differences instead of authentic mechanical, electronic safety, and efficiency advances. As GM's market share fell, its plants had tremendous excess capacity.

 

Quality Plummeted

 

By 1989, GM was losing more than $2,000 on every car it built through the organizational restructuring. In an effort to race new models into production faster, quality standards plummeted under Smith. In 1989 he launched the innovative Saturn division with unrealistic expectations (it needed to sell an unattainable half-million cars a year to break even) while allowing Saturn to cannibalize from existing GM brands. Smith squandered billions more through the misguided acquisitions of EDS and Hughes Aircraft.

 

He nonetheless survived despite shareholder outrage, analyst condemnations, media criticism, and downright ridicule in Michael Moore's blockbuster film Roger and Me.

 

Smith's secret weapon was his ability to manipulate GM's board, which he had packed with three top subordinates as well as public figures such as Ambassador Anne Armstrong, social activist Reverend Leon Sullivan, two academics, and GM's local Detroit banker. Full board meetings were ceremonial ratification events as the Smith-controlled committees provided whatever review was required. I knew Roger Smith, and even in informal, off-the-record gatherings, I always saw him flanked only by protective staffers.

 

The sorry state of corporate governance at GM was described in an internal 1988 memo by former Vice-Chairman Elmer Johnson (whom I knew well), who was recruited from GM's outside law firm: "Our culture discourages open, frank debate among GM executives in the pursuit of problem resolution. There exists a clear perception among the rank and file of GM personnel that management does not receive bad news well…our most serious problem pertains to organization and culture." Johnson complained that GM was imperiled by a 1950s mindset of "a very stable, predictable world" and "a culture not prepared to deal with new realities," with GM's overwhelming competitive advantage being its "monumental economies of scale."

 

That same year, former GM board member Ross Perot complained: "At GM the stress is not on getting results—on winning—but on bureaucracy, on conforming to the GM System. You get to the top of General Motors not by doing something but by not making a mistake."

 

A top GM decision-maker for 17 years

 

Given GM's cultural hindrances, Rick Wagoner's weak predecessors, and the perilous economic times, does this mean Wagoner, an honest, likeable fellow, is exempt from blame? Not if we think of CEOs as possessing transcendent leadership qualities. He led as CEO from 2000 to 2009 and as President or CFO since 1992—17 years at the controls as GM careened toward the cliff, failing to brake.

 

This is not the first time GM has faced tough times. Soon after William Durant, a former carriage engineer, founded GM in 1904, he drove the company into several potholes—even then needing large bailouts by its bankers. Hitting economic distress a decade later, Durant lost control of the business to Pierre Du Pont—who in turn instituted needed financial discipline and accountability. In 1923, Du Pont turned over the keys to the ingenious Alfred Sloan, who introduced style and design to auto manufacturing as well as a sound management structure.

 

Rick Wagoner proved to be no Pierre Du Pont or Alfred Sloan. In fact, the affable Wagoner can be judged more harshly than the vilified Roger Smith since Wagoner had Smith's public lessons to draw from. But rather than learn from them, Wagoner repeated them. For example, Wagoner's immediate predecessor, the short-term transitional figure Jack Smith, served as CEO while former Procter & Gamble (PG) CEO John Smale served as chairman. This revolutionary separating of the CEO and chairman roles (and the consequent addition of truly independent directors) allowed the board to pursue an agenda wrested from management's control.

 

Yet these reforms, inspired by attorney Ira Millstein, were rolled back under Wagoner. He recombined the chairman and CEO roles, assuming greater board control. He then packed the board with sympathetic voices, including four fallen CEOs from other companies, and ceremonial, nonbusiness figures. With the exception of two or three truly independent voices (especially the courageous surviving directors Kent Kressa and Neville Isdelle), the emotionally conflicted larger board circled the wagons to protect the CEO when legitimate criticisms arose, much as Roger Smith's board did.

 

This board rubber-stamping allowed Wagoner, a product of GM's dangerous cultural mindset, to drive the company back into past calamitous potholes. Consider this sampling of missteps on Wagoner's part:

 

• He lost $82 billion in just the past four years, and cash management was so poor that five years ago, GM's debt was properly downgraded to junk-bond status.

 

• He made astoundingly bad product decisions, such as supporting the poor-selling Pontiac Aztek and cancelling GM's early move into hybrids. And Chevrolet could have been marketing the Volt a decade earlier than it did, thanks to the prescience of Robert Stemple, a Wagoner predecessor who as CEO from 1990 through 1992 greenlighted the development of the EV 1, the first electric car.

 

• In 2002 he ignored urgent trends to focus on car development while reaping 90% of profits from pick-ups and SUVs.

 

• He maintained too many divisions and too many lookalike products.

 

• He was under-responsive as the economic crisis revealed itself, cutting production only 25%, while Ford cut more than 45% in the first two quarters of this year.

 

• He squandered great names like Saab, Opel, Saturn, and Hummer by not properly investing in them and hoping instead to harvest past initiatives and covertly transplant core GM car platforms.

 

• He led a misguided joint venture with Fiat that cost GM $2 billion to extricate itself from. He allowed GMAC, when he controlled it, to bathe in the subprime lending market with its disasterous RESCAP subsidiary. Contrast that with the strategy of Ford (F), which got out of that high-risk lending in 2002.

 

• He sold GM's valuable GMAC internal financing arm to Cerberus, which also controlled GM competitor Chrysler. In December and January, Cerebrus basically stopped writing retail finance contracts to support GM buyers.

 

• He pursued plans to purchase Chrysler, drawing on an anachronistic mindset that saw virtue in bulk operational size and scale efficiencies rather than profits, quality, and reputation.

 

• Wagoner continually went before the American public and Congress unprepared and angry, demanding taxpayer support without ever being able to articulate why he wanted $25 billion, how the company would use the money, and what GM's vision was for a future viable enterprise.

 

Rick Wagoner had the potential, the intelligence, the experience, and the education to be an Alfred Sloan, a Pierre Du Pont, a Carlos Ghosn, a Lee Iacocca, or even an Alan Mulally, but instead he chose the path of William Durant and Roger Smith. That his poor performance was rewarded with a 64% jump in total compensation, from $9.57 million in 2006 to $15.7 million in 2007, is a disturbing testimony to how far GM's once-revolutionary board reforms had retreated. Many shareholders have lost their investments, many workers have lost their jobs, and this nation has lost needed industrial might.

 

The free hand Wagoner had to make so many poor choices is an indictment of GM's board. But the choices he made speak to Wagoner's bad judgment when his company most needed him. "Engine" Charlie Wilson—a GM CEO in the 1950s—may have been on the right track when he said: "What is good for General Motors is good for the U.S." Rick Wagoner was not good for GM—and he was not good for the U.S.

Jeffrey A. Sonnenfeld is the Senior Associate Dean of the Yale School of Management for Executive Programs and Lester Crown Professor of Management Practice as well as co-author of Firing Back: How Great Leaders Overcome Career Disasters. He can be reached at jeffrey.sonnenfeld@yale.edu.

http://www.businessweek.com/managing/content/jun2009/ca2009061_966638.htm

 

This is an older but interesting article on how GM's management has operated for over 20 years. I'm a big GM guy, but the facts really speak for themselves. I think I'm actually glad that the US Government cleaned house. The company is a lot leaner now, and I trust Ed Whitacre.

 

The problem was never that GM could not produce a quality car. It's that the management forced things to be done a certain way with the goal of cost savings due to supposed operational efficiencies.

 

Wagoner does get credit for bringing in Bob Lutz though. Lutz is a real car guy and products have gradually but steadily improved in the last decade.