Saturday Night Live has been on a roll of late, with a string of strong skits centered around the Presidential election and the ongoing financial crisis. So it was only a matter of time before SNL took on the auto industry to task, using last week's Congressional hearings as the backdrop. As one might expect, SNL writers showed no mercy for Allan Mulally, Bob Nardelli, and Rick Wagoner, and Congress didn't look too bright, either. The omnipresent joke of the entire eight-minute skit was a long, consistent shot at the quality of Detroit 3 products. Even though it's an obvious exaggeration, we're guessing the shots are a sure-fire sign that commercials touting the quality improvements at Ford and GM have fallen on deaf ears. Hit the jump to view SNL's latest.
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Over the past few weeks, we've heard how badly Detroit automakers needed $25 billion in government-backed loans, but very few of us know exactly who gets the money. GM CEO Rick Wagoner got in front of a camera to answer some of those questions, and to talk about some of the challenges the General faces. Some of the interesting comments from slick Rick include the fact that the $25 billion is available to all automakers and suppliers that invest in the US, not just the Detroit companies. Wagoner also explains that the loan money was part of the bill passed in 2007 to increase fuel economy by 40% over the next decade, and not just some handout from Washington. Hit the jump to view the video.
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At a press conference on Thursday, shortly after announcing plans for a new engine plant in Flint, Michigan, General Motors CEO Rick Wagoner said his employer, "should be able to put to good use its portion of a $25 billion government loan package." Wagoner goes on to say he's concerned about the details of the plan but hopes the package is expanded to include all gas-saving technologies, not just electric cars. Which is understandable, considering GM has already invested a great deal of money into the Volt and would logically welcome financial assistance in investigating other fuel-saving methods. Then again, the Volt may just yet turn out to be classified as an electric car by the EPA, as the California Air Resources Board just did. Wagoner was also pleased to hear about the Senate's approval of a $7,500 tax credit for buyers of electric vehicles. The tax break is something the company has been lobbying for since May, and would certainly help to get the Volt's price tag closer to the original $30k estimate and hopefully allowing the General to sell the estimated 60,000 units we once heard.
GM began to counter the rumor and rabble with its Facts and Fiction site. Now they've gone a step further and introduced a video series called The Case for GM. The introduction video is by Christopher Barger, director of global communications technology, telling us that the series is meant to address your questions, and letting us know that the series will provide answers and insight from a large number of GM "team" members. The second vid is from top guy Rick Wagoner, answering the question "What do you say to those with concerns about GM's future?" Let us be clear that we applaud the effort GM is making to speak to the public. Nevertheless, this video highlights the problem: Wagoner doesn't say anything. At least, nothing we didn't already know. He talks about growth in emerging markets, and hybrids are out, and GM is excited about the Volt and the "electrification of the vehicle," and how GM's design team is showing its reignited passion for cars and trucks. Yeah, so... This also highlights the difficulty with the idea itself: how much can GM say? They can't talk about future product, they can't give away their technology R&D, they can't commit to revealing anything we don't already know. It would almost be better if they just took the day's latest bad news and said "This story isn't accurate, and this is why...," giving us any examples they could. What we would love to see is if they did a series of videos that took cars in GM's lineup and compared them side-by-side with competitor cars and showed us "This is why the GM product is as good or better." But we realize that would be a bit unfair. Not even Toyota or Honda is going to do that. But GM says that they want this to be a dialogue, so Autoblog readers, why don't you let GM know what you really want to know -- keep it constructive, remember! -- and maybe you'll get some of your questions answered. We have little doubt that GM can win -- but we would rather see more concrete answers on the showroom floor.
General Motors CEO, Rick Wagoner, mentioned in passing that several parties have expressed interest in purchasing HUMMER and that GM is moving as quickly as possible to seal the deal. "We have some interested buyers," Wagoner told reports while attending the opening of a new GM engineering and development center.
The sale of HUMMER would help fund GM's attempt to boost liquidity to the tune of $15 billion by the end of 2009. Other brands could be cut or paired down, but Wagoner insists that Saab will continue to soldier on. "Saab is a critical part of our European portfolio and has the potential to be quite a good moneymaker for us." He went on to say that the next Saab will be built in North America, although it wasn't divulged what model would be produced or where.
After being asked what the next President of the United States could do to help Detroit's automakers, Rick Wagoner, head honcho at General Motors, responded that his company could use an injection of cash for research and development into new, potentially green technology. Also mentioned were additional incentives for consumers to purchase those vehicles once the automakers actually produce them. Neither of these suggestions should be shocking to anybody paying attention to the Detroit 3's recent financial woes. Much of the admittedly meager R&D budget is already being spent on new technologies such as hydrogen fuel cells and electric drive systems, including the extremely important lithium ion battery.
Federal aid in the form consumer incentives would allow automakers to offer eco-friendly vehicles at potentially profitable prices while still being in the target range of many consumers. In the past, tax credits for hybrid vehicles have helped move that technology along when it was in its infancy. This latest meeting hosted by presidential hopeful Barrack Obama once again indicates how important the emerging green-auto sector and health of the Detroit auto industry in general will be in the coming election.
An article in the Atlantic Monthly examines the genesis and gestation of the Chevy Volt, and concludes with an intriguing mix of potential hits and misses. Calling the Volt "the Barack Obama of automobiles-everyone's hope for change," even the Atlantic Monthly knows that this car currently means more to GM and perhaps the U.S. car buying public than anything else. There is a huge amount of emotion behind the Volt, and not all of it is supportive.
The article is just as much about GM and how the company operates as it is about the car. The case is put forward that this is less about the viability of the Volt and more about whether GM can finally execute a proper long term follow through. GM has had brilliant ideas before, but its commitment and track record of seeing them through to successful ends isn't so great.
GM CEO Rick Wagoner said, "If I've learned anything over the past three or four years, it's that a lot of this business is sticking with it and persistence. In the coaching vernacular, we're going to leave it on the floor to make this happen." That's a telling quote from the captain of the ship. More heartening is the quote from another GM exec on what the Volt means to the company: "The empire strikes back." Atta boy.
Considering the sorry state of financial affairs that GM appears to be in, it seems extremely unsurprising that the board would like to see some big changes made at the very top of the company. What is a little shocking, though, is just how soundly the specific proposals were rejected. For instance, a proposal sponsored by John Chevedden of Redondo Beach, California, which would have given shareholders an annual advisory vote on executive compensation and pay, found less than 38-percent of voters in support. Another proposal which was soundly defeated would have tied executive stock options and awards with company performance.
Still, there were some vocal company detractors present at the annual shareholders meeting, such as Mary Ann Wiley from Seattle, Washington. She told GM CEO Rick Wagoner, "If the company does not do well, management should take an equal hit, and I don't think they've taken an equal hit." Wagoner's $15.7 million dollars worth of compensation for 2007 is as drop in the bucket compared to GM's reported loss for the same calendar year, so it seems obvious that there is a bit more to the problem than overpaid executives. Still, a little shake-up seems like a distinct possibility if things don't improve quickly.
At the General Motors annual meeting in Delaware today, CEO Rick Wagoner will be publicly announcing the latest restructuring round for the beleaguered automaker. In response to plummeting sales of large trucks, GM will close down four more North American Assembly plants by 2010. The plants in Janesville, Wisconsin, Oshawa Ontario, Moraine, Ohio, and Toluca, Mexico are already running reduced production schedules and will cease operations entirely as products are discontinued or shifted to other plants. The Janesville plant builds medium trucks and SUVs while Moraine builds the old body on frame Trailblazer, GMC Envoy and Saab 9-7x SUVs. The other plants build full-size pickup trucks. The closures affect 10,000 employees at those plants. Those that aren't among the 19,000 who are taking buyouts will be offered transfers to other locations to fill spaces vacated by the departing workers. The closures are expected to save GM about $1 billion a year.
Wagoner will also be announcing that GM has begun a strategic review of the HUMMER brand. We contacted GM spokesperson Joanne Krell this morning who told us that the review has just begun and there is no time frame for a decision. "The HUMMER brand is a great brand and we're probably not maximizing it to its fullest. Perhaps somebody else would have that opportunity." All options are being considered including "ramping up the portfolio," shutting the brand down or "selling it in whole or in part." At this point, GM has not had any discussions with other manufacturers about the possibility of a sale, which won't happen until the review is completed.
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GM has seen plenty of tough times over the past few years, and even the company's top executives have felt the pinch. Executive pay was among the items cut as the General waded through multi-billion-dollar losses and immense market pressure, but after two years of cuts, the members of GM's top brass are getting their old salaries back. Top boss Rick Wagoner's base pay went as "low" as $1.1M but is now back to its 2003 level of $2.2M. Product czar Bob Lutz and money man Fritz Henderson also had their pay restored, and Fritz even got a raise to reflect his promotion to COO. Many of the pay cuts were voluntary in recognition of GM's market struggles, but even with the cuts in base pay, overall executive pay packages are worth a lot more than just the salaries alone. Wagoner, for example, was paid $14.4M in 2007, while Maximum Bob came in at $6.9M.
