The Wall Street Journal is reporting today that among the documents Toyota has turned in to the Congressional committee investigating acceleration-gate is a potentially damning document that apparently describes as a win their success in lobbying the National Highway Safety Administration (NHTSA) to limit the recall over sudden acceleration to only 55,000 units. The document claims the save to the company was $100 million. The document also claims other wins in eliminating other potential recalls, including the Tacoma pickup.

This is just the kind of “smoking gun” that Congress and safety advocates will say “proves” that Toyota intentionally put the company’s profits above the safety of its customers. Toyota said, ”Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong. Our values have always been to put the customer first and ensure the highest levels of safety and quality. Our recently announced top-to-bottom quality review of all company operations, along with new quality initiatives and a renewed commitment to transparency are all designed to reaffirm these values.”

It is entirely inappropriate to take a page from a presentation out of context and use it like this. Of course Toyota cares about its customers - just about every company does. Just about every company also cares about its profits, and they should. It is likely that the Toyota employees that put the presentation together would regard saving $100 million as a good thing - who wouldn’t? They likely also thought that because they were successful in lobbying NHTSA to limit the scope of the recall, NHTSA agreed that more vehicles didn’t need to be recalled. Given what the letters NHTSA stand for, Toyota logically assumed that NHTSA would push for the recall if it deemed it necessary. It apparently didn’t, at least until the publicity of the San Diego law enforcement officer’s death made this a bigger, more public issue.

Did Toyota act perfectly? It seems not. But to take this piece of paper as proof that they willfully put the lives of their customers in danger is silly, and dangerous.

That’s what I think - how about you? Please leave your comments below. Thanks!

The Slandy Report first told you about the Prius brake issue back in December, before it was known to most of the general public. Back then, they had only recalled 3.8 million vehicles for accelerator issues. That number is now over 8 million. Back then, Toyota was not the subject of congressional investigations for potentially withholding evidence of the safety defect and for stalling before doing anything about it. Now they are. Back then, their stock was trading in the US at almost $85. Now, Toyota’s market capitalization has lost about $18 billion, or more than 15% of its value in those 6 weeks. Apparently, much can happen in 6 weeks. The Lions, however, didn’t win anymore games. They still suck. But I digress.

Toyota acknowledged the Prius issue today with this release:

Toyota is aware that NHTSA has opened a Preliminary Evaluation centered on owner complaints of a braking issue with the 2010 model year Prius. Toyota will cooperate fully with NHTSA’s investigation.

Some customers have complained of inconsistent brake feel during slow and steady application of brakes on rough or slick road surfaces when the anti-lock brake system (ABS) is activated in an effort to maintain tire traction.  The system, in normal operation, engages and disengages rapidly (many times per second) as the control system senses and reacts to tire slippage.  A running production change was introduced last month, improving the ABS system’s response time, as well as the system’s overall sensitivity to tire slippage.

This preliminary evaluation addresses owner complaints specific to the 2010 Prius.  This condition is not related to either the floor mat entrapment recall or the sticky pedal recall currently in action.

Toyota will continue to evaluate the condition as it relates to owner complaints and will keep NHTSA informed of its progress.

Toyota Toyopet - see? They were known for green cars then, too.

At this rate, all of Toyota’s vehicles will be the subject of 1 or more recalls. Which is next, the 1957 Toyopet (the vehicle that launched Toyota’s sales in the US market)? It seems that Toyota can’t buy break (pardon the pun) these days. It seems that they are suffering from the same ailment that has infected the Detroit 3. for a long time, they could do no wrong and their sales were only limited by their ambition. They made the age-old error: they began to believe their own press. They have violated the basic tenants of their own systems that are the source of their great success to this point, believing they could violate them at will with no consequences. They were wrong.

That’s what I think - how about you? Please leave your comments below.

Perhaps you’ve been following the news about Toyota’s “issues”. Perhaps, even, you know a bit about automotive design and engineering and can see through the PR-speak and the smoke screen that they tend to put up in front of the real truth. If so, then you have already come to the same conclusion that I have. Congratulations, but this column is not for you. This column is for the people who are taking all of the news in, and are confident that Toyota is the greenest, most altruistic company that has ever walked (several inches above) the Earth. Toyota makes the best cars and trucks anywhere, and this little glitch only proves that they’re human, even if all previous evidence indicates that their headquarters is not in Japan, but on top of Mount Olympus.

To recap, Toyota is recalling over 8 million vehicles around the world for 2 separate, but similar, problems. In some vehicles, the floor mats can interfere with the gas pedal and cause it to stay depressed even when the driver takes their foot off of it. The other is for gas pedals that, on their own, stay depressed when the driver intends to slow down. Different problems, same effect - the car doesn’t slow down when the driver intends it to slow down.

Toyota maintains that the floor mat issue is simple to fix - the mat just needs to be secured properly. In other words, customer error. Toyota is taking the step of recalling the affected vehicles to fix this.

Toyota's Pedal "Fix"

In the other, Toyota blames the pedal itself, and said a few days ago that it has a fix for cars on the road. A small metal part will be inserted into the accelerator pedal assembly to make sure that the pedal’s springs will work as intended and force the pedal up when the customer takes their foot off.

So far, so good, right? Wrong. Toyota says only the pedals made by CTS, an Indiana supplier, are affected. Pedals made by the other supplier, Denso, are not. Denso, by the way, is partly owned by Toyota. In the world of automotive purchasing, such an arrangement is called “dual-sourcing” (as opposed to “single-sourcing”). Two (or more) companies make the same part for the same vehicle from the same set of specifications from the automaker, and are used interchangeably. Neither Toyota nor the government has indicated that CTS is to blame in any way, but only its pedals need to be fixed, not Denso’s. The pedal design is to blame, according to everybody. If it’s a design issue, then why are Denso’s parts not part of the problem?

Something doesn’t add up.

Next, the issue being “fixed” is being called unintended acceleration, as in “the car keeps going faster than I want it to.” No matter if you’re talking about the floor mat issue or the pedal issue, neither one will make the car or truck go faster. The both would prevent the car from slowing down. Big difference. To be fair, to a panicking driver, these would likely feel very much the same, so maybe this is a case of a badly worded problem. However, if that were the case, wouldn’t Toyota or the US government use the proper wording when describing the problem? If the cars are, in fact, accelerating, Toyota’s “fix” won’t “fix” anything. It will simply pacify the masses while they really try to figure out the problem. If they really are accelerating, then the problem is likely to be in the vehicle’s electronics, in the software code that makes modern cars and trucks (usually) so reliable and fuel-efficient. Toyota itself said during a meeting with a congressional committee that “…sticking accelerator pedals are unlikely to be responsible for the sensational stories of drivers losing control over acceleration as their cars race to 60 miles per hour or higher.” In addition, there have been reports of the acceleration issue in vehicles that are not subject to either recall.

Something doesn’t add up.

Also, less than 2 weeks ago, Toyota said it did not know what the problem was, nor how to fix it. Yet on Monday, February 1, Toyota announced the fix, complete with a diagram, saying, “Toyota’s engineers have developed and rigorously tested a solution…” Toyota went from still investigating to a “rigorously tested” solution is less than 2 weeks. Just how “rigorous” is this solution?

Something doesn’t add up.

If the “solution” is so good for the cars already on the road, why then is the solution for cars and trucks yet to be built different? That’s right, kids, CTS is already making a redesigned accelerator pedal for the factory to use after they are back up and running next week. It is NOT the same pedal with an extra part inserted, as described above for cars on the road. Why?

Something doesn’t add up.

If the various “fixes” that Toyota is implementing do not correct the problem, they will have a PR problem that will make the Pinto look like a schoolyard argument. And something else won’t add up, either. Toyota’s sales and profits.

That’s what I think - how about you? Please leave your comments below.

As was expected, Tesla Motors, Inc. filed its registration statement of its intent to sell stock to the public. It intends to raise as much as $100 million in the offering. No expected date was given for the offering. Stay tuned. If you’ve never read a Form S-1, try it sometime. Because it constitutes a legal document which could form the basis of a shareholder lawsuit someday, companies are brutally honest in the document. This is so they can say in court, “We told you so” if needed to fend off a fraud or other claim down the road. So it can indeed be an interesting read.

Here’s a tidbit from Tesla’s S-1 that anybody who follows the auto industry would find interesting. It is in the “Risk Factors” section of the S-1:

We anticipate that we will experience a decrease in revenues and increase in losses prior to the launch of the Model S.

Prior to the launch of our Model S, we anticipate our automotive sales may decline, potentially significantly as we do not plan to sell our current generation Tesla Roadster after 2011 due to planned tooling changes at a supplier for the Tesla Roadster, and we do not currently plan to begin selling our next generation Tesla Roadster until at least one year after the launch of the Model S, which is not expected to be in production until 2012…As a result, we anticipate that we will generate limited, if any, revenue from selling electric vehicles after 2011 until the launch of our Model S. The launch of our Model S could be delayed for a number of reasons and any such delays may be significant and would extend the period in which we would generate limited, if any, revenues from sales of our electric vehicles. The expected decrease in revenues for the periods prior to the launch of the Model S may be significant and could materially and adversely affect our business, prospects, operating results and financial condition and our ability to fund operating losses could seriously constrain our growth.

So Tesla will be essentially out of business for some period beginning sometime next year for at least a few months, and that assumes the Model S arrives on time. Because the Model S is Tesla’s first vehicle that they are designing from the ground up, it is reasonable to assume that they will have some delays and/or other problems. In fact, it is unreasonable to assume that they will NOT have any delays. The major auto companies, with decades of experience, regularly encounter problems or delays that they can not foresee. In fact, given the nature of the S-1, Tesla has enumerated the potential risks of successfully launching the Model S:

Our production model for the non-powertrain portion of the Model S is unproven, still evolving and is very different from the non-powertrain portion of the production model for the Tesla Roadster.

Our future business depends in large part on our ability to execute on our plans to develop, manufacture, market and sell our planned Model S electric vehicle. To date our revenues have been principally derived from the sales of our Tesla Roadster. The Tesla Roadster has only been produced in low volume quantities and the body is assembled by Lotus Cars Limited in the United Kingdom, with the final assembly by us at our facility in Menlo Park, California for sales destined in the United States. We plan to manufacture the Model S in higher volumes than our present production capabilities in our planned manufacturing facility. As a result, the non-powertrain portion of the production model for the Model S will be substantially different and significantly more complex than the non-powertrain portion of the production model for the Tesla Roadster. In addition, we plan to introduce a number of new manufacturing technologies and techniques, such as a new painting process and aluminum spot welding systems, which have not been widely adopted in the automotive industry. Our Model S production model will require significant investments of cash and management resources and we may experience unexpected delays or difficulties that could postpone our ability to launch or achieve full manufacturing capacity for the Model S, which could have a material adverse effect on our business, prospects, operating results and financial condition.

Our production model for the Model S is based on many key assumptions, which may turn out to be incorrect, including:
• that we will be able to identify and secure an appropriate facility for the manufacturing of our Model S;
• that we will be able to secure the funding necessary to build out and equip the manufacturing facilities in a timely manner, including meeting milestones and other conditions necessary to draw down funds under our loan facility with the DOE;
• that we will able to develop and equip the manufacturing facilities for the Model S without exceeding our projected costs and on our projected timeline;
• that the equipment we select will be able to accurately manufacture the vehicle within specified design tolerances;
• that our computer aided design process can reduce the product development time by accurately predicting the performance of our vehicle for passing relevant safety standards, including standards that can only be met through expensive crash testing;
• that we will be able to obtain the necessary permits and approvals, including those under the California Environmental Quality Act and the National Environmental Policy Act, as well as building and air quality permits, to comply with local zoning, environmental and similar regulations to operate our manufacturing facilities and our business on our projected timeline;
• that we will be able to engage suppliers for the necessary components on terms and conditions acceptable to us and that we will be able to obtain components on a timely basis and in the necessary quantities;
• that we will be able to deliver final component designs to our suppliers in a timely manner;
• that we will be able to attract, recruit, hire and train skilled employees, including employees on the production line, to operate our Model S manufacturing facility;
• that we will be able to maintain high quality controls as we transition to an in-house manufacturing process; and
• that we will not experience any significant delays or disruptions in our supply chain.

If one or more of the foregoing assumptions turns out to be incorrect, our ability to successfully launch the Model S on time and on budget if at all, and our business prospects, operating results and financial condition may be materially and adversely impacted.

We have no experience to date in high volume manufacturing of our electric vehicles. We do not know whether we will be able to develop efficient, automated, low-cost manufacturing capability and processes, and reliable sources of component supply, that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required to successfully mass market the Model S. Even if we are successful in developing our high volume manufacturing capability and processes and reliable sources of component supply, we do not know whether we will be able to do so in a manner that avoids significant delays and cost overruns, including as a result of factors beyond our control such as problems with suppliers and vendors, or in time to meet our vehicle commercialization schedules or to satisfy the requirements of customers. Any failure to develop such manufacturing processes and capabilities within our projected costs and timelines could have a material adverse effect on our business, prospects, operating results and financial condition.

Given this, and because Tesla has not made any money yet, could a significant delay in the launch of the Model S spell the end of Tesla? Will Elon Musk be willing to continue to fund the operations from his petty cash account? Of course, Tesla was awarded a $465 million loan to develop the Model S by the US government. If they go out of business, will Musk be asked for the taxpayers’ money back? If so, will he use PayPal?

That’s what I think - how about you? Please leave your comments below.

In what has been an ongoing saga worthy of Charlton Heston epic, GM has finally decided that selling Saab for something is better than spending millions to shut it down. Apparently, the GM Board consulted with its economic advisors, who told them, “Getting money is better than spending it.” According to an insider, the board has formed a blue-ribbon committee to find out if this principle can be applied to other parts of the business.

The Swedish government has reviewed the transaction and the related request for guarantees of a Saab Automobile loan that has been requested from the European Investment Bank, and has apparently approved it.  Assuming quick action, the transaction is expected to close in mid-February, and previously announced wind down activities at Saab will be immediately suspended, pending the close of the transaction.

Saab's Upcoming 9-4x

As part of the agreement, Spyker intends to form a new company, Saab Spyker Automobiles, which will carry the Saab brand forward.  The sale will be subject to customary closing conditions, including receipt of applicable regulatory, governmental and court approvals.  Other terms and conditions specific to the sale will be disclosed in due time.

As part of the deal, GM will get $74 million cash, $326 million of preferred stock, plus some other consideration that GM refused to identify. GM will also continue to provide powertrains, the upcoming 9-4x finished vehicles and engineering services on an ongoing basis. GM will continue to honor warranties until Saab Spyker sets up organizations in markets around the world. No word yet on whether the present plan to close down some of the Saab dealers will proceed under Saab Spyker.

That’s what I think - how about you? Please leave your comments below.

GM today confirmed it has selected AlixPartners to supervise the orderly wind down of Saab, and has requested approval of the selection by the appropriate authority in Sweden.  The use of a wind down supervisor is a commonly-used process in Sweden and works in the interest of the shareholder.

The wind down process is expected to take several months, and will ensure that employees, dealers and suppliers are adequately protected.  As stated previously, Saab customers can be assured that warranties will continue to be honored and that service and spare parts will continue to be available.

GM also confirmed that it has received several proposals for Saab and is continuing to evaluate these proposals. This evaluation is not affected by the appointment of AlixPartners.

You have to really wonder what the heck is going on in the tubes (GM’s RenCen HQ in Detroit).  GM keeps rejecting deals for Saab, but then decides to just shut it down.  A little common sense might go a long way here.  It costs money - lots of it - to shut down a company or an automotive brand.  GM should seriously consider a deal to take it off their hands for a player to be named later and a cup of coffee.  But aside from the costs of the 2 possibilities here, GM also needs to consider its reputation.  Saab has legions of loyal customers, despite GM’s mismanagement of the iconic brand over the years.  If it shuts it down, not only will many thousands of people worldwide be put out of work, GM’s reputation will take yet another hit that it can ill afford.  Yo, Big Ed, take however much time you need, and take the best offer you can get.  Shutting it down should only be a consideration if you have no credible offers in hand.

That’s what I think - how about you?  Please leave your comments below.

Pontiac, Saturn and now Saab.  Can Hummer be far behind?  I’m not talking about brands that GM has decided are not “core” anymore, but those that are going or out of business in the last several months.  Pontiac was supposed to become a niche brand, and then the government told GM to shut it down.  Saturn was supposed to be sold to Roger Penske, and when that fell through, GM decided to just shut it down.  Now Saab will have a similar fate.  Saab was supposed to be sold to Koenigsegg, a Swedish producer of exotic sports cars.  That fell through, and then GM sold some of Saab’s assets to Beijing Automotive (BAIC) this week.  Word came out that GM was working with Spyker on a deal for the rest of Saab.  Today, GM made the announcement below.

Detroit.  General Motors announced today that the intended sale of Saab Automobile AB would not be concluded. After the withdrawal of Koenigsegg Group AB last month, GM had been in discussions with Spyker Cars about its interest in acquiring Saab. During the due diligence, certain issues arose that both parties believe could not be resolved.  As a result, GM will start an orderly wind-down of Saab operations.

“Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time. In order to maintain operations, Saab needed a quick resolution,” said GM Europe President Nick Reilly.  “We regret that we were not able to complete this transaction with Spyker Cars. We will work closely with the Saab organization to wind down the business in an orderly and responsible manner. This is not a bankruptcy or forced liquidation process. Consequently, we expect Saab to satisfy debts including supplier payments, and to wind down production and the distribution channel in an orderly manner while looking after our customers.”

Saab will continue to honor warranties, while providing service and spare parts to current Saab owners around the world.

As part of its efforts to become a leaner organization, GM began seeking a buyer for Saab’s operations in January.  Last week, Saab Automobile AB announced that it had closed on the sale of certain Saab 9-3, current 9-5 and powertrain technology and tooling to Beijing Automotive Industry Holdings Co. Ltd. (BAIC).  GM expects today’s announcement to have no impact on the earlier sale.

As the company continues to reinvent itself, GM has been faced with some very difficult but necessary business decisions. The focus will remain on the four core brands – Buick, Cadillac, Chevrolet and GMC – and several regional brands, including Opel / Vauxhall in Europe.  This will enable the company to devote more engineering and marketing resources to each brand and model.

You have to wonder what was the hurry?  GM has only referred to a December 31 deadline to get a deal done.  That sure seems like an artificial/meaningless/arbitrary date, which is fine - it’s their business to run as they please.  Just spare us the self-imposed emergency.

That’s what I think - how about you?  Please leave your comments below.

GMC gets its 3rd General Manager in a month…GM announces the “small car” it will build at its Orion Township plant…Obama signs dealer arbitration bill…GM speeds development now that it actually has cash to spend.  All this and more on today’s episode of As the Crankshaft Turns.

As The Slandy Report told you, Mike Richards, hired to lead Buick-GMC, left after only 8 days on the job.  Well, now Buick-GMC has a new leader.  Brian Sweeney, formerly Buick-GMC sales manager, takes over the division after months of turmoil.  The division is desperate for sales, and chairman Ed Whitacre has said that executives will not have long to show results.  Sweeney has been replaced by Jennifer Costabile, 47, a 25-year GM veteran.

In May, GM announced after a competition between 3 plants, that it would build an unnamed new small car at its Orion plant in suburban Detroit.  The unnamed has now been named.  The next generation 2011 Chevy Aveo will be built at the plant next year.  The present Aveo is made in South Korea, and the next version was supposed to be made in Mexico or China.  A big win and a new small car for the US!!

President Barack Obama on Wednesday signed legislation that would give rejected GM and Chrysler dealers access to neutral arbitration if they want to be reinstated, kicking off a a 6½ months arbitration process.

GM and Chrysler now have 30 days to send letters to the owners of about 2,150 rejected dealerships informing them of their rights under the new law and spelling out the reasons that their franchise agreements were terminated.

With Obama’s signature, the eliminated dealerships have 40 days to give notice that they intend to seek arbitration.

Brent Dewar

Susan Docherty, newly minted VP of sales service and marketing, lost one of her key lieutenants today.  Brent Dewar, VP of Chevrolet, and one of Docherty’s direct reports under last week’s changes, announced that he will “retire” effective April 1, 2010.  In the meantime, he will act as an advisor to Mark Reuss as he transitions to his new role as president of North America.

One can assume that Dewar’s “retirement” wasn’t planned in advance and was the result of the latest management changes because he was only recently repatriated to the US and because Docherty had reported to Dewar in a previous position.  It seems that Dewar didn’t think he should be reporting to Docherty and/or Reuss - maybe he thinks he should have been given the job that Docherty got.  Or maybe Dewar was seen as a holdover of the “old GM” regime, having spent 31 years at the General.  Maybe Reuss and Docherty told him that maybe he wasn’t going to fit in at the “New” GM.

Jim Campbell

Replacing Dewar is Jim Campbell, who will be moving to Chevrolet from his position as General Manager, Fleet and Commercial Operations.  Before running GM’s Fleet and Commercial Operations, Campbell held various positions in field sales, retail incentives, marketing and customer relationship management.  He has played important roles in many product launches including the Chevrolet Impala, Monte Carlo, Colorado and Corvette.

Jim Bunnell will be responsible, in the interim, for Fleet and Commercial Operations until a replacement has been named to replace Jim Campbell.

In other General Motors news, Michael Richards, who was just named Buick-GMC general manager December 1, seems to be out.  Although GM has not announced this (and will not comment), there are reports in the Detroit Free Press and Bloomberg News that Richards is gone.  Richards, a former Ford marketing executive, had a reputation for treating employees poorly.  Maybe his new bosses heard about that reputation and decided that he didn’t fit with their vision for the future.  Maybe a little more due diligence would have been smart.

That’s what I think - how about you?  Please leave your comments below.

Last week, GM’s new (and third one this year) CEO Ed Whitacre announced major leadership changes, moving swiftly to put a management structure in place that he and the board feel will better position GM for continued growth and profitability.  Gone is the change that Fritz Henderson made, splitting sales from marketing.  Sales and marketing are now recombined under Susan Docherty, newly appointed as VP of Vehicle Sales, Service & Marketing (”VSSM”, which also includes Service Parts and OnStar).

Bob Lutz, who was put in charge of marketing and public relations in the previous shakeup, is going back to the product side, where he will be a special advisor to Chairman and CEO Ed Whitacre on product and design.

So where does this leave Tom Stephens, who assumed the title of vice chairman of global product development when Lutz went to marketing?  Tom must have been thinking that Pete Townshend had taken over GM.  ”Meet the new boss, same as the old boss…”  Whitacre tossed a bone to Stephens by adding purchasing to his responsibilities, but if this newest realignment doesn’t work, Stephens won’t get fooled again.

Perhaps the biggest change of all, though, is the reappearance of a president of North America, a job that went away earlier this year when Troy Clarke “resigned”.  Mark Reuss, who only recently was repatriated to North America as VP of Engineering, is appointed President of North America.

Aside from the obvious issues with leadership churn, I think these changes mostly make sense.  Sales, service and marketing belong together, and it makes sense to have somebody in charge at the North American level.  When the General dismantled North America, it tried to globalize everything, including marketing.  Sales and marketing, by their very nature, are not global.  They are regional or local.

More than anything else, the new “temporary” CEO is promoting people into positions of power that will have loyalty to him, not the previous regimes.  And it sends a signal to the rest of the company that he is serious about accountability in the organization going forward.

That’s what I think - how about you?  Please leave your comments below.

There were other changes as well.  See the full announcement below.

To improve accountability and responsibility for market performance in North America and around the world, several key leadership changes were announced today by GM Chairman and CEO, Ed Whitacre.

“I want to give people more responsibility and authority deeper in the organization and then hold them accountable,” Whitacre said.  “We’ve realigned our leadership duties and responsibilities to help us meet our mission to design, build and sell the world’s best vehicles.”

Mark Reuss is named president of GM North America.  Reuss was briefly vice president of Engineering after leading GM’s Holden operations in Australia in 2008.  Reporting to Reuss will be Susan E. Docherty, who is appointed vice president, Vehicle Sales, Service and Marketing operations.  Also aligned under the new North American group will be Diana D. Tremblay, who is named vice president, Manufacturing and Labor Relations.  Tremblay was most recently vice president of Labor Relations.  Denise C. Johnson is named vice president, Labor Relations.  Johnson was most recently vehicle line director and chief engineer for Global Small Cars.

Nick Reilly is named president, GM Europe.  Reilly has been leading the restructuring efforts in Europe with the Opel/Vauxhall operations and will leave his role leading GM International Operations.

Tim Lee is named president of GM International Operations, overseeing GM’s Asia-Pacific, Latin America, Africa, and Middle East operations.  Lee was most recently group vice president, Manufacturing and Labor Relations.

Bob Lutz remains vice chairman and will act as advisor on design and global product development.

Thomas G. Stephens remains vice chairman of Global Product Operations, and will now take on global purchasing in his organization, which will continue to be lead by Robert E. Socia, vice president, Global Purchasing and Supply Chain.  Karl-Friedrich Stracke is appointed vice president, Engineering, reporting to Stephens.  Stracke was most recently executive director of Engineering.

J. Christopher Preuss, vice president, Communications, will now report to Whitacre; he previously reported to Lutz.

The balance of the direct report staff remains unchanged and includes CFO Ray G. Young;  John F. Smith, vice president Corporate Planning and Alliances;  Terry Kline, vice president IS&S;  Mary T. Barra, vice president Human Resources;  Mike Millikin, vice president of Legal;  and Ken W. Cole, vice president Government Relations and Public Policy.