Tag Archive | "General Motors Co."

Ford, GM Make Moves for Self-Driving Vehicles

Ford Motor Co. and General Motors Co. are investing in Silicon Valley-area ventures as they try to stay in front of the fast-changing automotive industry.

Ford tapped former University of Michigan interim athletic director Jim Hackett to lead a new subsidiary, Ford Smart Mobility LLC, according to The Detroit News. That wing of the company will develop alternative transportation strategies and self-driving technologies in Dearborn and Palo Alto, California, Ford said Friday.

Also Friday, GM announced it will acquire Cruise Automation, a three-year-old San Francisco startup that will help GM test and develop driverless cars in city environments.

The moves – the latest in a series of similar announcements by both automakers in recent years – are part of an effort to transform into tech-savvy mobility companies to compete with newcomers like Uber, Apple and Google. They are intended to show Wall Street they are no longer the hidebound companies that nearly went out of business during the last economic downturn.

“They’re covering their bases,” said Jack Nerad, executive editorial director and executive market analyst with Kelley Blue Book. “Tomorrow might be a very different landscape, and they want to be ready.”

For the past 14 months, Ford has been working on a number of smart mobility experiments that test everything from car-sharing services to alternative forms of transportation like electric bicycles and drones.

Recently, Ford started an Uber-like shuttle service for its Dearborn employees, and partnered with Bridj, a shuttle service in Kansas City. It also launched a new app, called FordPass, that collects information such as parking space availability. Some of its mobility research includes development of autonomous vehicle technology.

Michelle Krebs, senior analyst at AutoTrader, said it’s a strategic business move.

“In addition to tapping into new revenue sources, Ford is establishing a framework for all work related to future mobility that allows the rest of the company to focus intently on the day-to-day core business of vehicle manufacturing,” she said. “Past efforts by Ford to transform to a mobility company failed because the company took its eye off its core business. Yet, the work that goes on within the new mobility subsidiary can feed back into the core business when appropriate if Ford does this right.”

Hackett – the former Steelcase vice chairman and CEO and recent UM athletic director – is leaving his position on the Ford board of directors to become chairman of the new subsidiary. He will report to Ford President and CEO Mark Fields.

During his time at Steelcase, Hackett helped transform the company from a traditional furniture-maker to one that understood the rise in popularity of open-office spaces and other trends.

“I’m so excited by it because it’s the wheelhouse of me, which is working on abstract, hard problems with great, smart people,” Hackett told The Detroit News on Friday. “This stint at UM is like the sorbet course of the meal, it cleansed my palate of one industry to do something different.”

Other automakers are creating separate business units as well. GM announced earlier this year it had created the Autonomous and Technology Vehicle Development Team, led by Doug Parks, its former vice president of global product programs.

GM’s acquisition of Cruise Automation will help it further develop driverless cars. The three-year-old technology company will act as an independent unit within the Autonomous Vehicle Development Team. Cruise Automation will continue to be based in San Francisco. The deal is expected to close in the second quarter; terms were not disclosed.

Since the start of the year, GM has announced it was investing $500 million in the ride-sharing service Lyft; launched its own Zipcar-like car-sharing service in Ann Arbor called Maven; and established a separate unit for autonomous vehicle development.

“The Cruise acquisition shows that GM is serious about autonomous driving, as is almost every other auto manufacturer,” said Akshay Anand, analyst at Kelley Blue Book. “Like it or not, autonomous cars are coming, and coming fast.”

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GM’s Chevy Brand Sweeps North America Car, Truck Awards

(Bloomberg) – General Motors Co. (GM)’s Chevrolet brand swept the North American Car and Truck of the Year awards at the Detroit auto show with its Corvette Stingray sports car and Silverado pickup.

The win, which marks the first time Detroit-based GM has taken both awards since 2007, underscores the automaker’s product resurgence following its 2009 U.S. government-backed bankruptcy reorganization. Ford Motor Co. in 2010 was the last to sweep the awards with the Transit Connect van and the hybrid version of its Fusion sedan.

GM’s win is “very significant,” said Mary Barra, who is slated to become chief executive officer Jan. 15 as Dan Akerson retires. “I hope that people look, and if they haven’t considered General Motors or Chevrolet they’ll get into the showroom, because I’m confident if they get into the showroom they’re going to see a lot of vehicles they like,” Barra told reporters after the awards were announced.

The Corvette Stingray beat out GM’s Cadillac CTS and Mazda Motor Corp.’s Mazda3. The Silverado, a full-sized pickup that ranks among GM’s most profitable vehicles, beat Honda Motor Co.’s Acura MDX and Chrysler Group LLC’s Jeep Cherokee.

GM rose 0.4 percent to $40.20 at 8:57 a.m. in New York. The stock advanced 42 percent last year.

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Chevrolet Marketing Boss Chris Perry resigns

(Reuters) – The ongoing upheaval in General Motors Co.’s (GM) executive ranks continued with the sudden resignation of Chris Perry as vice president of Chevrolet marketing. Perry, 53, spent just over three years in the job, after being wooed to GM in mid-2010 by Joel Ewanick, his former boss and colleague at Hyundai Motor America.

Earlier in 2010, Perry had replaced Ewanick as vice president of marketing at the Korean automaker’s U.S. operation. Ewanick was fired by GM as its global marketing chief in August 2012 for not properly disclosing the full cost of a $559-million sponsorship deal with English soccer club Manchester United.

Perry’s is the latest high-level departure in GM’s sales and marketing organization. Susan Docherty resigned this summer as European head of Chevrolet and Cadillac. Cadillac’s global marketing chief Don Butler also quit the company in August.

GM said a replacement for Perry would be announced “at a later date.”

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GM Announces Sale of Equity Stake in Ally Financial

Detroit – General Motors Co. completed the sale of its 8.5 percent common equity ownership in Ally Financial Inc. for total proceeds of approximately $0.9 billion.

In association with this transaction, GM expects to record a gain of approximately $0.5 billion, which will be treated as a special item in the fourth quarter of 2013.

“This transaction releases capital from a non-core asset and further enhances our financial flexibility,” said Dan Ammann, GM executive vice president and chief financial officer. “Ally continues to play an important role in financing our dealers and customers in the United States.”

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GM Reportedly Halting Chevy Volt Production To Pare Down Excess Inventory

HAMTRAMCK, Mich. – Reports have abounded in the last week that GM is temporarily halting production of it’s Chevrolet Volt line in the plant here. The reports, first published in Automotive News, note that sources have said the shut down will be from Mid-September until Mid-October, and will both allow GM to bring the supply of the Volt in-line with current demand. At the same time, the plant will also temporarily stop production of the Chevrolet Malibu as well.

According to widely circulated reports, during the shut-down, the 1,200 workers will be given unemployment compensation for the period, which will amount to roughly 90% of their usual pay.

GM has struggled to match production of the Volt to consumer demand, selling 13,000 so far this year. Dealers are reporting enough inventory to last 84 days at the current sales pace, which explains the temporary halt in production. The Volt uses a lithium-ion battery for the bulk of it’s power, with a small gasoline engine for times when the battery runs low. It retails for $40,000.

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GM Directors Undaunted By 33 Percent Stock Slump Praise CEO Akerson

General Motors Co. directors praised Dan Akerson’s performance as chief executive officer while saying he must now fix the automaker’s European operations and begin grooming a successor.

Akerson, who gave himself a ‘B’ grade during an interview last month, can stay on as long as he wants, directors Robert Krebs, Neville Isdell and Patricia Russo said last week in separate interviews before the company’s annual meeting in Detroit. GM regained the title of world’s largest automaker last year, when it earned a record full-year profit of $9.19 billion, reported Bloomberg.

Even with those successes under Akerson, GM’s stock fell 45 percent in 2011. Shares, including the U.S. government’s 32 percent stake, have declined 33 percent from the automaker’s November 2010 initial public offering through June 8, attracting value investor Warren Buffett’s Berkshire Hathaway Inc.

“We’re frustrated, but we don’t sit around the board table bemoaning the price of the stock,” Krebs, who joined GM’s board in July 2009, said by telephone from Chicago. “We’re in this for the long haul.”

GM rose 0.7 percent to $22.20 at 9:41 a.m. in New York.

About half of the company’s directors, including Krebs, Russo, Akerson and his predecessor, Ed Whitacre, joined the board as the company emerged from its 2009 bankruptcy reorganization. Whitacre replaced longtime GM executive Fritz Henderson as CEO, then surprised the board when he said he didn’t want to stay with the company long after the 2010 IPO.

The directors turned to Akerson, a Navy veteran who had split his career between telecommunications and private equity.

“I don’t think we could’ve found anyone better,” Isdell, former CEO and chairman of Coca-Cola Co., said in a telephone interview from France.

Isdell, Krebs and Russo say they’ve witnessed a cultural change at the automaker, once known for management by consensus that was too slow and too cautious.

“The company is a lot more externally focused and a lot more competitively driven,” Russo said by telephone from New York.

Walking out of the last GM board meeting, Krebs said he told Isdell that GM “isn’t even the same company that we saw when it came out of bankruptcy.”

Isdell agreed. Akerson has found and promoted “very good people who know what’s wrong and are dying to do the right thing,” he told an Atlanta audience last month.

Still, the CEO shouldn’t be given too much credit for GM’s stellar profits, because it was the company’s government-backed bankruptcy, managed by Steven Rattner and Ron Bloom, that lowered the automaker’s break-even point, said Maryann Keller, principal of a self-titled consulting firm in Stamford, Connecticut.

Last year’s market-share gain — GM added half a percentage point in the U.S. — was aided by Toyota Motor Corp.’s production shortfalls caused by natural disasters in Asia, said Keller, a former Wall Street analyst. GM faces increased competition from a resurgent Toyota as well as Volkswagen AG, which has aggressive global growth goals, she said.

“How’s he doing for somebody who didn’t know anything about the car business when he took over? I suppose OK, but you’re measuring against that criteria,” Keller said.

Akerson has been successful in building a strong senior management team, from which he should be able to groom a successor, said Russo, the board’s lead director. She said research suggests external successors make sense for companies needing change.

“I don’t believe that’s the case for GM at this point,” said Russo, a former Alcatel-Lucent SA CEO. “I would hope that when the time is right we’ve got a sufficient bench to be able to find the right successor.”

Vice Chairman Steve Girsky, 50, North America President Mark Reuss, 48, and Senior Vice President for Global Product Development Mary Barra, 50, have been mentioned by Akerson as possibilities. It isn’t a choice the board expects to face soon.

“I’ve encouraged him to stay long enough to find a successor in the company and to get the board comfortable,” Krebs said, estimating it would take “a couple years.”

The agenda for GM’s annual meeting tomorrow in Detroit includes re-electing all 12 directors, including Akerson, and adding two new members: Jim Mulva, 65, former ConocoPhillips chief executive officer, and Tim Solso, 65, retired CEO of Cummins Inc.

The shareholder meeting coincides with a board meeting, where members have recently been getting detailed analyses of what competitors are doing better than GM.

“Costs are still too high,” Krebs said. While GM’ operating margins are about 5 percent, he’d like to see that nearly double to the level that both Volkswagen and Hyundai are posting. “We’re envious of the financial results those companies are turning in.”

About half of the gap between GM and those rivals is because of Europe, where GM has lost $16.4 billion since 1999, Akerson has said. Analysts have estimated it will cost at least $1 billion to restructure Opel, and it may take years to stop the losses.

“We have to wait until 2014 before we can close a plant and clearly that has to be done,” Krebs said.

Akerson’s legacy — and the board’s — will be shaped in large part by whether he’s successful in turning around GM’s European operations. Though Henderson had advocated selling most of Opel, the German carmaker owned by GM, Akerson helped persuade the board to keep it. That was the right decision, Krebs said.

“We’re going to fix it,” he said, “so it becomes a low- enough cost producer so that it can survive in the bad times and make a lot of money in the good times.”

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