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Top Stories
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Some closed GM and Chrysler dealers could get reprieve
Hundreds of General Motors and Chrysler dealers will be able to seek arbitration about the loss of their franchises under the spending bill that's going to President Obama's desk, USAToday reports. The $1.1 trillion funding measure includes provisions that create an arbitration process that could result in allowing some of the dealerships to stay open. The National Automobile Dealers Association fought for what it calls the "dealers rights" provision while the two troubled automakers fought it. "As with any compromise, this is not a perfect solution. However, this is far better than any of the previous proposals," the association said in a statement. Chrysler closed 792 dealerships as part of its Chapter 11 bankruptcy reorganization earlier this year. GM has targeted nearly 1,300 dealerships that it wants to close by next October as part of its own now-finished bankruptcy proceeding.
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GM, Ford to end salaried pay freeze on demand recovery
General Motors Co. and Ford Motor Co., the two biggest U.S. automakers, will end pay freezes for salaried employees next year, adding to evidence they foresee increasing demand amid an economic recovery, Bloomberg News reports. Ford has set aside funding for merit raises and will resume matching 401(k) retirement savings for as much as 5 percent of base pay in 2010, Mark Fields, its president for the Americas, told employees in a Dec. 10 memo. GM, which resumed 401(k) matches of as much as 4 percent on Oct. 1, said yesterday it will disclose details of a merit-pay program in early February. “It certainly indicates that they expect better things in 2010 than in 2009,” said Stephanie Brinley, an auto analyst for AutoPacific in Troy, Michigan. The automakers plan to boost pay after they beat analysts’ estimates for U.S. sales last month, stoking optimism that demand may be recovering from a slump caused by the deepest recession since the Great Depression. The industrywide November auto sales rate was also higher than a year earlier, the first time that has happened this year without government support.
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GM Chairman:Government pay limits hinder CEO search
General Motors Co.'s Chairman Ed Whitacre said Tuesday he doesn't intend to remain in the chief executive post long-term, but has no timetable for finding a new leader, Dow Jones Newswires reports. Whitacre, speaking Tuesday to reporters, said the CEO search has been underway for about a week and so far there are no candidates. The top job could go to either a company insider or a seasoned executive with no automotive background, Whitacre said. The search, he said, is complicated by executive pay limits imposed by the U.S. government on companies that received a lot of federal rescue funding. "I think it would be somebody who is wanting to do this for more than compensation," Whitacre said. "It's a big deal. It's about coming back and making a company great and making it public again."
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Spyker: Still talking with GM on Saab
Dutch sports-car manufacturer Spyker Car NV said Tuesday it is still in talks to buy General Motors Co.'s Saab unit, adding that other parties are unlikely to still be in the running, Dow Jones Newswires reports. "I can't confirm that we are the only potential buyer for Saab, but I think it is unlikely that there will be other potential buyers left," Spyker Chief Exectutive Victor Muller told Dow Jones Newswires. A Swedish government official earlier Tuesday said it had been given the go-ahead to analyze an approach from a lead bidder as it considers a request to act as guarantor to EUR400 million in European Investment Bank loans to Saab. The approval process stalled last month, after a consortium led by Koenigsegg Automotive pulled out of a deal to buy Saab. Swedish State Secretary Joran Hagglund, the government's main liaison with the auto industry, said GM is working to complete a deal before the end-of-year deadline, but declined to name the party involved.
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The December Dealer magazine e-zine is here
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CEO: GM to repay government loans by end of June
General Motors chairman and CEO says GM plans to repay all of its $6.7 billion in government loans by the end of June, The Associated Press reports. Ed Whitacre Jr. says the company plans to make quarterly installments starting this month with a $1.2 billion payment. He says it could repay sooner but that hasn't been decided. In addition to the loans, GM has received $45.3 billion in aid from the government which was converted into an equity stake. Whitacre also says government pay restrictions will make the search for a new CEO more difficult, but he's confident the company can still find a strong leader. Fritz Henderson resigned on Dec. 1 after he and the board differed on the direction of the company.
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Gas-electric car sales expected to rise in '10
Sales of fuel-efficient gas-electric hybrids are expected to rise next year, outpacing the U.S. auto market's overall growth, according to a new forecast, The Detroit News reports, citing Edmunds.com. Edmunds predicted U.S. auto sales would recover modestly next year, to 11.5 million cars and light trucks from an estimated 10.3 million this year. Its forecasters expect hybrids to outperform the market, even though they cost more, on average, than comparable gas-powered models. Hybrids are expected to increase their share of the market to 3.2 percent in 2010 from around 2.8 percent this year, according to Edmunds. It expects the market share for hybrids to grow by about half a percentage point a year for the foreseeable future. The share of diesel-powered light vehicles is expected to dip next year to 2.1 percent, from 2.2 percent this year, reflecting a reduction in the availability of diesel models due to more stringent emission rules coming into force.
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J.D. Power: Popularity of nav systems can help sell vehicles
Real-time traffic and voice recognition are becoming increasingly popular features among factory-installed navigation system owners, compared with 2008, according to the J.D. Power and Associates 2009 Navigation Usage and Satisfaction StudySM released today.
[FULL STORY]
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Ford lauds Obama for industry rescue
Ford Chairman Bill Ford thanked President Barack Obama on Monday for "swiftly and forcefully" stepping in to rescue General Motors and Chrysler this year, the Detroit Free Press reports. Ford, in Washington to deliver an action list from the National Summit on the economy held in Detroit last June, said that Obama had stabilized not just GM and Chrysler but also auto suppliers. Ford said his meeting with Obama in the Oval Office lasted less than 15 minutes and was "a courtesy call." "He was obviously interested in how the industry was going, and I complimented him on how he handled the industry," Ford said.
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Dave Anderson Quote of the Week
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Failure is not an accident. You either set yourself up for it or you don’t.
-- Dave Anderson, Learn to Lead, Inc.
Order Dave's new book and get a $99 bonus! Click Here!
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Dealer Advocate
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The audacity of aspiring to achieve excellence
by Jim Ziegler
With the government now owning a majority share of General Motors and other major U.S. corporations, by the v.jpg?i=121509115127) ery definition of the word, we are slip-sliding away from our cherished way of life into some kind of bizarre type of fascism…a government owned and operated entitlement society. The retail automobile business is one of the last bastions, the embodiment of the entrepreneurial spirit that made America great. We must never give up the values that have made us who we are. Personally, my entire life has been performance-based. I wouldn’t have it any other way. And, a performance-based life should enjoy performance-based rewards…or lack of rewards, not a society or a government that says success has limited rewards. These last several years have been the supreme test of character and endurance for most of us. I sincerely believe we’re on the other side of this thing now. Those of us still standing have been severely stressed throughout this ordeal, but ultimately, I believe it will continually improve into the future as we endeavor to return to greatness. Evidently Moody’s agrees. In a report released today at the Reuters Auto Summit, Falk Frey, Moody’s senior VP of corporate finance, told reporters to expect a 2% worldwide recovery ramping up to a full 8% increase in sale by the end of 2011. Read more
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In Dealer magazine
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Seven tips to tap the power of strategy
by Dave Anderson
If .jpg?i=121509115127) you start the new year with a clear, compelling, and bold vision for where you’d like to wind up by the end of 2010 you’re off to a good start. However, where you’d like to go is only part of the equation. What you’ll do to get there and how you plan on doing it will determine whether your vision becomes a reality or is relegated to a pipe dream. Sadly, while many leaders will enter 2010 with a corporate vision, they will have given little thought to the strategy that will help them achieve it. They forget that vision without strategy is hallucination. Following is a short course in strategy that will help you create an effective game plan as you endeavor toward your 2010 objectives. Read more
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