Tag Archive | "General Motors Co."

GM Focusing on Malibu, CTS for 2010 Profits


General Motors Co. is cutting prices and reworking ads to revive sales of two sedans that executives consider vital to meeting Chairman Ed Whitacre’s goal for a 2010 profit, reported Bloomberg.com.

The moves are aimed at shrinking dealer stockpiles of the Chevrolet Malibu and Cadillac CTS that ballooned to more than twice the industry average, North American President Mark Reuss said in an interview ahead of next week’s Detroit auto show.

Whitacre’s prediction this week of “positive net income” in 2010 expanded on his challenges to management since becoming CEO on Dec. 1. He has begun early repayments on GM’s $6.7 billion in U.S. loans and replaced more than a dozen executives.

“Those are the two critical vehicles in GM’s lineup,” said Michael Robinet, a CSM Worldwide analyst in Northville, Michigan. “They have to have success there as an anchor to their overall portfolio.”

Malibu and CTS inventory reached a five-month supply in late 2009, more than double the industry average of roughly two months, Reuss said. The CTS was priced too high against models such as BMW’s 3-Series, he said.

“Finally GM is willing to look at the price of the vehicle and adjust it to the market conditions,” Dave Butler, general manager of Suburban Cadillac in Troy, Mich., and Suburban Chevrolet-Cadillac in Ann Arbor, Mich., told Bloomberg.com. “They didn’t wait until it got to a critical level.”

Butler said the no-interest financing offered by GM on 2009 Malibus isn’t being matched on the 2010 model, in effect boosting the price. “A lot of purchase intenders may be waiting for that kind of incentive,” he said.

Advertising decisions also played a role in the Malibu’s slowing sales, as GM “walked away” after the vehicle’s initial promotion to focus on other models, Reuss said.

Malibu’s 9 percent 2009 U.S. sales drop was less than the industry’s 21 percent slide, and the 25 percent decrease for the full Chevrolet line, according to industry researcher Autodata Corp. in Woodcliff Lake, New Jersey. CTS sales fell 34 percent, compared with 32 percent for all Cadillacs.

Chevrolet and Cadillac are now more pivotal to GM’s sales, as the automaker trims U.S. brands to four from eight to help end annual losses that began in 2005. Buick and GMC also are being retained, while Saab, Hummer, Saturn and Pontiac are being dropped.

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GM: Hundreds of Dealerships Could be Restored


Hundreds of the 1,350 General Motors Co. dealers who lost their franchises last year could see them restored in a congressionally mandated arbitration process that begins later this month, the company’s interim CEO told The Associated Press.

CEO and Chairman Ed Whitacre Jr. also said that new Chief Financial Officer Chris Liddell is a candidate for the CEO post. And Whitacre said he’s not confident about selling the Swedish Saab brand.

In a wide-ranging talk with reporters at GM’s Detroit headquarters, Whitacre also predicted that GM would be profitable this year, although he said that was dependent on the economy and other factors.

The 1,350 dealerships, which were allowed to stay open until October 2010, were targeted as part of an effort to dump poor performers and better align its dealer base with much lower consumer demand for autos. In many cases, GM had dealerships too close to one another and competing on price, the company said.

Congress passed legislation late last year that forces GM and Chrysler Group LLC, which shed 789 dealers last year, to give dealers a chance to appeal closure decisions. Both companies went through bankruptcy protection earlier this year and are receiving government aid.

Whitacre said GM had a “pretty arbitrary cutoff point” for shedding dealers, and that it probably made mistakes in getting rid of some of them.

When pressed, he said “hundreds of dealers” may be closer to 100 than a thousand, but it’s a “substantial number.”

When the franchises were revoked last summer, GM officials said dealers were judged on whether they met sales goals, customer service scores, the condition of their buildings and other criteria. They were allowed to stay open through October of this year to sell their inventories.

Under pressure from dealer groups and lawmakers, GM and Chrysler put out proposals that would have allowed dealers to challenge closures in arbitration. But a bill passed by Congress allows them to bring a much wider range of proof that they are profitable.

Dealers have until Jan. 25 to tell the automakers if they will appeal.

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Pay Czar Approves Compensation Packages for New GM, GMAC Execs


Despite exceeding limits imposed by companies that have received government aid, the compensation packages for General Motor’s new chief financial officer and the new head of GMAC were approved by the government pay czar, the Associated Press reported.

Chris Liddel, who will leave his job at Microsoft on Dec. 31 to take up his new role as GM’s new CFO, is set to receive a salary of $750,000 next year. He also will get up to another $5.45 million worth of stock starting in 2012 if GM successfully sells shares to the public. GM said in a government filing that it had worked out an exemption with the government pay czar Kenneth Feinberg.

Feinberg also approved a compensation package for Michael Carpenter, the new head of GMAC. It will pay him a base salary of $950,000 and up to another $8.55 million worth of stock.

GM has received $52 billion in taxpayer assistance, much of which was converted into equity that gives the U.S. government a 60 percent stake in the company.

Under new pay rules established in October for companies that received substantial government aid, the base pay of General Motors’ top executives is capped at $500,000. However, a small number of exemptions to pay limits have been granted for other major recipients of government money, such as with the American International Group Inc. It was allowed to boost its pay package for an employee to be better aligned with other executives at the insurer.

As for GM, much of the compensation will be paid in company stock that cannot be redeemed until the beginning in 2011 or after GM starts repaying its government loans.

In the case of Liddell, he will receive $3.45 million in company stock over three years starting in 2010 in addition to his base salary. He will get another stock grant of $2 million that vests in three years and is payable in 25 percent installments for every 25 percent repayment of GM’s $6.7 billion in government loans.

In the case of Carpenter, Feinberg ruled that in addition to the executives $950,000 base salary, he is eligible for up to $8.55 million in stock, payable in installments over several years and tied to the performance of GMAC.

GMAC, which is viewed as a key component of the Obama administration’s rebuilding of the auto industry, has already received $13.5 billion in government aid and is 35 percent owned by the federal government. The government has also indicated it will provide an additional $6.5 billion to GMAC to boost its capital reserves.

Carpenter, who has served on GMAC’s board, was picked to succeed Alvaro de Molina after his departure in November.

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GM CFO to get $750,000 Salary, Plus Stock


DETROIT – The new chief financial officer at General Motors Co. will receive a salary of $750,000 next year, but he’ll get up to another $5.45 million worth of stock starting in 2012 if GM successfully sells shares to the public, reported The Associated Press.

Chris Liddell’s pay package exceeds the limits imposed on companies that have received U.S. government aid, but an exemption was worked out with the government pay czar Kenneth Feinberg, GM said in a government filing Wednesday.

Liddell’s compensation package will exceed that at Microsoft Corp. when accounting for his stock awards. His pay package at the software giant was about $2.4 million.

Liddell, 51, will leave his job as Microsoft Corp.’s CFO on Dec. 31 and join GM next year. He is seen as a possible candidate for GM’s next CEO.

GM’s current CEO Ed Whitacre Jr. is not earning a salary, but he receives a $350,000 annual stipend as a board member. His predecessor Frederick “Fritz” Henderson, who was ousted earlier this month, was receiving a compensation package of nearly $5.5 million, including a cash salary of $950,000, under Feinberg’s pay rules.

In addition to a base salary of $750,000, Liddell will receive $3.45 million in company stock over three years starting in 2012. He will receive another stock grant of $2 million that vests in three years and is payable in 25 percent installments for every 25 percent repayment of GM’s $6.7 billion in government loans.

Under new pay rules for companies that received substantial government aid set in October, the base pay of General Motors’ top executives is capped at $500,000. Much of the compensation for GM officials will be paid in company stock that cannot be redeemed until beginning in 2011 or after GM starts repaying its government loans.

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Spyker Extends Deadline Indefinitely for GM to Consider Saab Sale Proposal


Dutch carmaker Spyker is giving General Motors Co. more time to consider its latest offer for car brand Saab, reported The Associated Press.

Spyker Cars had previously given GM until 5 p.m. EST Monday to consider its latest proposal, but Spyker says that deadline has been extended indefinitely as negotiations continue.

Spyker submitted the latest offer on Sunday, just days after talks with GM to buy the Swedish car brand collapsed. GM said on Friday it had no other buyers and would close Saab.

On Monday, Swedish government officials were holding emergency meetings with unions and local authorities to prepare for the closure of Saab’s main factory in Trollhatten.

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GM Repays $1.2B of U.S., Canadian Government Loans


General Motors Co. says it has repaid $1 billion of its loans to the U.S. government and $192 million to the Canadian government, reported The Associated Press.

The automaker says it followed through on a commitment to begin repaying the loans by the end of this month.

Chairman and CEO Ed Whitacre Jr. says in a statement that GM looks forward to repaying all of its loan balances by the end of June. He says the repayments are contingent on no downturns in the economy or GM’s business.

GM owes the U.S. government $52 billion, with $6.7 billion of that in loans. At least part of the rest will be repaid when GM issues stock, perhaps as soon as next year.

The automaker also owes the Canadian and Ontario governments about $1.4 billion.

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