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Brent Dewar

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

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.

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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.

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GM CEO Fritz Henderson Resigns

1st December 2009

Former GM CEO Fritz Henderson

Former GM CEO Fritz Henderson

Fritz Henderson, who took over as GM’s CEO when Rick Wagoner was relieved of his position in March, resigned effective today, following the monthly board of directors meeting.  GM Chairman Ed Whitacre will assume the title of CEO while GM conducts an international search for a permanent replacement.

Henderson, 51, was a GM lifer, who had been with GM for 25 years, and has been hurt by that image. The press and government have portrayed him as a competent manager and finance executive, but one who would not provide the kind of outside influence that GM needs. GM spokesman Chris Preuss denied any government involvement in the decision, calling it a “board decision.”

GM issued the following statement:

At its monthly meeting in Detroit today, the General Motors Board of Directors accepted the resignation of Fritz Henderson as Director, President and CEO of the company.

Fritz has done a remarkable job in leading the company through an unprecedented period of challenge and change.  While momentum has been building over the past several months, all involved agree that changes needed to be made.  To this end, I have taken over the role of Chairman and CEO while an international search for a new president and CEO begins immediately.  With these new duties, I will begin working in the Renaissance Center headquarters on a daily basis.  The leadership team – many who are with me today – are united and committed to the task at hand.

I want to assure all of our employees, dealers, suppliers, union partners and most of all, our customers, that GM’s daily business operations will continue as normal. I remain more convinced than ever that our company is on the right path and that we will continue to be a leader in offering the worldwide buying public the highest quality, highest value cars and trucks.  We now need to accelerate our progress toward that goal, which will also mean a return to profitability and repaying the American and Canadian tax payers as soon as possible.

In closing, I want to once again thank Fritz Henderson for his years of leadership and service to General Motors; we’re grateful for his many contributions.  I look forward to working with the entire GM team as we now begin the next chapter of this great company.

Henderson’s bio, according to Wikipedia:

Henderson was born in Detroit, Michigan. Henderson is a 1976 graduate of Lake Orion High School in Lake Orion, Michigan. He holds a Master of Business Administration degree from Harvard Business School and a bachelor’s degree in business administration from the University of Michigan’s Ross School of Business. During his time at Michigan, Henderson pitched for the University of Michigan Wolverines baseball team.

Since joining GM in 1984, he held a number of positions with the company until 1992 when he became GMAC group vice president of finance in Detroit.

From 1997 to 2000, Henderson became GM vice president and managing director of GM do Brasil covering GM operations in Brazil, Argentina, Paraguay, and Uruguay. Here he was successful in introducing small, inexpensive cars such as the Celta subcompact and the Meriva microvan, both produced in Brazil.

In June 2000, he was appointed group vice president and president of GM-LAAM (Latin America, Africa and Middle East) and in January 2002, he moved to Singapore as president of GM Asia Pacific where he was successful in expanding operations in Korea and China.

In 2004, Henderson was appointed chairman of GM Europe, based in Zurich, Switzerland, where he undertook substantial restructuring including significant reductions in jobs.

After becoming vice chairman and chief financial officer in January 2006, in March 2009, he became GM president and chief operating officer. At the time, the Financial Times quoted him as saying: “Being part of a turnround at GM when, frankly, many people don’t think it can be done, is exhilarating, if you like challenges. I have never had a dull day in my time at GM.”

When GM exited bankruptcy, Henderson said, “This is an exciting day for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers. We deeply appreciate the support we’ve received. We’ll work hard to repay the trust, and the money, that so many have invested in GM.”

In August 2009, Henderson refused to move the economically priced, rear wheel drive, Pontiac G8, to another GM marque after slashing the brand.

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Chrysler Creates Ram Brand

5th October 2009

As rumored, Chrysler has split the Dodge brand into 2 parts – Dodge Car and Dodge RAM.  In an announcement today, Chrysler made official the rumor that started last week.  Dodge cars will continue to be marketed as Dodge, while the trucks will add the RAM name.

Some believe this is being done to isolate the valuable parts of Chrysler (Jeep and Dodge trucks) from the no so valuable parts (Chrysler and Dodge cars) for an eventual sale or discontinuation.  Assuming that FIAT plans to keep all of the parts, there are some pros and cons to this move.

Pro: Dodge trucks have enjoyed a positive position in the market, especially since they gave the RAM truck its own tough look and image with the Mack Truck redesign in the 1992 model year.  Like Ford and Chevrolet, Dodge’s image is confusing to the public.  They have a good tough truck image for the trucks, while their cars are seen as commodities.  Ford and Chevrolet have worked very hard over many years to shed this image.  Dodge doesn’t have many years. Separating the 2 will allow them to craft an entirely new image for Dodge cars.  Hopefully, they will develop some cars that fit that new image.  As stated here previously, Dodge needs to stand for sporty and affordable fun transportation.  The “Dodge Trucks are Ram Tough” doesn’t work with that.  Ford and Chevy are likely going to be very interested in how well this works.  Neither of them have a ready-made sub-brand like RAM, but this is a copycat business.  If the RAM brand is a success, look for Ford and/or Chevrolet to try something similar.

Con: the flip side of allowing the cars and trucks to have separate images to the customers is that the change will likely confuse those same customers.  With so many nameplates out there, the last thing you should do is confuse your customers.  However, with good communication, this will be lessened.  Dodge needs to make sure it doesn’t think that customers will make any effort to understand what they’re doing.  They may just go elsewhere.  Keeping the Dodge name, along with the RAM name, will help.  The plan is apparently to keep the Dodge name while adding the RAM moniker, so it will be Dodge RAM pickup, Dodge RAM Dakota, etc.  The other potential hurdle is that the RAM truck brand will be diluted to include (potentially) many other vehicles.  RAM is probably Chrysler’s strongest brand, behind Jeep, and the potential harm they could do to it (and therefore, to the company) by including other vehicle types cannot be ignored or overstated.

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

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Penske Cancels Plan to Buy Saturn

30th September 2009

GM CEO Fritz Henderson issued the following news release this afternoon:

“Today we learned that Penske Automotive Group (PAG) has decided to terminate discussions with General Motors to acquire Saturn. This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality. PAG’s announcement explained that their decision was not based on interactions with GM or Saturn retailers; rather it was because of the inability to source new products beyond what it had asked GM to build on contract.

As a result of PAG’s decision, we will be winding down the Saturn brand and dealership network, in accordance with the wind-down agreements that Saturn dealers recently signed with GM. Pursuant to the terms of those agreements, the wind down process will be determined and communicated shortly.

Saturn customers and owners will continue to be able to purchase and have their vehicles serviced at Saturn retailers during this process. Once the wind down is complete, Saturn owners will still be able to have their vehicles serviced at other GM dealerships. We will be communicating with our customers very soon to explain the next steps in this process.

Today’s disappointing news comes at a time when we’d hoped for a successful launch of the Saturn brand into a new chapter. We will be working closely with our dealers to ensure Saturn customers are cared for as we transition them to other GM dealers in the months ahead. I’d also like to thank every GM employee and Saturn retailer who worked so hard to try to make this new beginning happen for Saturn.”

To say this is a shocking announcement is an understatement.  Roger Penske, who some wanted to take over GM, was considered a white knight for Saturn dealers.  If anybody could have saved their butts as GM discarded them like day-old coffee, it was Penske.  Those dealers deserved so much better than the fate which will now be theirs.  Saturn consistently has ranked as one of the highest brands in dealer satisfaction, despite years of product neglect by the General.  That means they really worked their tails off to make the customers happy.  And what was their reward?  Selling out-of-date, less than adequate product for more than a decade.  Only recently was the lineup overhauled, making it one of the best around.  But it was too little; too late.  The damage was done.  Now there is only the task of shutting off the lights as the last employees of the once-proud dealers go home for the last time.  Like I said about Pontiac recently, RIP Saturn; you will be missed.

That’s what I think – how about you?

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Chrysler’s “Plan”

29th September 2009

Automotive News reported last week that Chrysler-Fiat has a product strategy that includes the Chrysler brand moving way upscale, Dodge emphasizing driving dynamics and Jeep just staying Jeep, with a little fine-tuning.  Fiat, since taking control of Chrysler, has reorganized each of the brands under a CEO, who has total P&L responsibility for the brand.  That will work fine, as long as there is a referee who will decide which segments are appropriate and to make sure that overlap between the brands’ offerings are minimized.  As each of the brand CEOs report to Fiat CEO Sergio Marchionne, he seems to be the referee.

Chrysler brand CEO Peter “The Fongster” Fong says that the Chrysler brand needs to go upscale, but he is also considering a subcompact model.  That might work in Europe, where his boss works, but Americans generally equate luxury and status with size.  Bigger is better.  He adds that Chrysler will be “a notch above Lincoln, a notch above Cadillac.”  That is an admirable goal, but I sure hope he has a LONG time to accomplish this.  It takes YEARS and BILLIONS of dollars for new product programs to come to market and YEARS and HUNDREDS OF MILLIONS of dollars more to establish or change a brand identity – once you have the product.  The Fongster better hope Sergio doesn’t mind waiting a decade or 2 for results.

Dodge is going after the “driving dynamics” market, which sounds suspiciously like they’re going after BMW.  Good luck.  Everybody (Mercedes-Benz, Audi, Cadillac to name a few) has been going after BMW for many years, with only small degrees of success.  Now Dodge hopes to get in on this?  Please.  Dodge needs to be the affordable, sporty brand.  They must stay affordable because they don’t have another brand that can realistically sell affordable cars.  Maybe they should bring back Plymouth?

Jeep will stay Jeep.  At last, a good plan emerges from the rubble.  Jeep needs to cut back on its product lines and make darn sure it only sells products that are true to the Jeep brand.  That means no Compass or Patriot.  Jeep started calling its own products that still would meet the Jeep standard “Trail Rated” a few years ago, in anticipation of their slide into soft-utes.  Jeep should not produce anything that isn’t trail rated.

Also getting in the way is Fong’s point that the need to have “a broad array of products across every one of the segments.”  Wrong.  What each brand needs is a reasonable selection of products that are high quality, get good fuel economy for the segment and are true to the brand image they are trying to project.  Because all of the dealers will carry all of the brands going forward, each brand does not need to fill every segment or even many segments.  They only need to fill the segments that are true to the brands and enough of them to keep a viable, profitable dealer base.

That’s what I think – how about you?

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GM Agrees to Sell Opel to Magna

10th September 2009

GM issued the following statement today:

Zurich. General Motors today announced that its Board of Directors supports a bid from the consortium of Magna International Inc. and Sberbank to buy a majority stake in its European Opel/Vauxhall operations.

Several key issues will be finalized over the next few weeks to secure the binding agreements, including the written support of the labor unions to support the deal with the necessary cost restructuring for viability and the finalization of a definitive financing package from the German government. The definitive agreements should be ready to sign within a few weeks, with closing to follow within the next few months. Under the deal, Magna/Sberbank will purchase a 55 percent stake in New Opel; GM will hold a 35 percent stake and employees will be provided a 10 percent stake.

“The hard work over the past two weeks to clarify open issues and resolve details in the German financial package brought GM and its Board of Directors to recommend Magna/Sberbank,” said Fritz Henderson, GM President and CEO. “We thank all parties involved in the intensive process of the last few months — especially the German government — for their continued support that enables this new venture. I’d also like to thank the Opel and Vauxhall customers for their continued loyalty. GM will continue to closely collaborate with Opel and Vauxhall to develop and produce more great cars, such as the new Insignia and the new Astra,” Henderson added.

The agreement will keep Opel/Vauxhall a fully integrated part of GM’s global product development organization, allowing all parties to benefit from the exchange of technology and engineering resources. The new ownership structure constitutes a new lean, efficient and independent organization for the Opel and Vauxhall brands. The current portfolio of Opel/Vauxhall cars and the models in the pipeline are a strong basis for future success.

Participating in GM’s global technology development and purchasing organizations secures important economies of scale for Opel/Vauxhall and other GM brands. For example, vehicles that represent new propulsion technologies, such as the Ampera extended-range electric vehicle, can only be brought to market in a joint effort.

“GM operates many joint ventures around the world and has proven in the past that this business model delivers the right balance of independence, innovation and synergies,” said John Smith, GM Group Vice President Business Development. “All parties will work hard to close the deal as soon as possible,” he added.

This deal baffles me, unless the agreement contains very strong assurances that GM will retain access to all of the engineers and systems that are so integral to GM’s worldwide product development system.  Several North American products have roots at Opel, including the highly acclaimed Chevy Malibu and Buick LaCrosse and the upcoming Chevy Cruze.  In other words, Opel is responsible for some of GM’s best new products, so they better not let that talent and expertise get away or worse, compete against them.
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With mounting pressure from the board of directors to improve sales AND profitability, GM announced today that it will offer customers a “60-Day Satisfaction Guarantee” which allows customers to return their vehicle to their dealer between 31 and 60 days of purchase and receive a refund of the purchase price for the vehicle.  The program runs from September 14 to November 30, and covers all vehicles from Chevrolet, Cadillac, Buick and GMC only.  It doesn’t cover the brands non grata (Saturn, Hummer, Saab and Pontiac). Details of GM’s Satisfaction Guarantee:

· Offer covers 2009 and 2010 Model Year Chevys, Buicks, GMCs and Cadillacs (except medium duty trucks)

· Customers (one per household) can return their vehicle between 31 and 60 days with less than 4,000 miles

· Customers will be informed in writing before they buy the vehicle of the terms of the Satisfaction Guarantee

· Customers must take delivery by Nov. 30

· The Satisfaction Guarantee covers the vehicle purchase price and sales tax, but not other add-ons like accessories, negative equity on a trade-in or other fees;  other restrictions apply

· Leased vehicles are not included

The money-back guarantee is also part of a new marketing campaign which will star GM Chairman Edward Whitacre Jr.  The campaign will evoke the famous Lee Iacocca adds of the 1980s, when Lido told us “if you can find a better car, buy it!”  Eddie Whitacre will tell us “May the Best Car Win.”  Using Lee was smart back then; I’m not sure using Whitacre is.  Lee was a celebrity of sorts already, famously going to DC to ask for federal loan guarantees. Nobody outside the telephone industry ever heard of Whitacre before he was named chairman of GM.  He might do very well, but nobody will know who he is – at least at first.  This will reduce the effectiveness.  It also goes against new marketing honcho Bob Lutz’s plan to focus on the 4 core brands and not on the company in its advertising.
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With all of the negative news surrounding GM of late, this bit of good news for the General emerged yesterday: GM has closed the gap with #1 Toyota to almost a rounding error. For the 1st half of 2009, GM is 11,000 units behind Toyota in global sales, including beating Toyota by 140,000 in the 2nd quarter. Last year, GM was behind by about 274,000 units. VW is 3rd, but gained on both GM and Toyota.

So how does GM gain while its sales continue to slide?  By Toyota’s sliding even more.  GM’s global sales slid by 22% in the 1st half, while Toyota’s slid by 26%.  VW, which gained on Toyota by more than a million units, saw its sales decline by only 5%.

Ford, which ranks 5th, had the biggest decline of the major companies.  Its sales slid by 31%.

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GM Teams Up with eBay

11th August 2009

Citing the need to try new things, GM VP Mark LaNeve announced that GM will try an innovative approach to selling cars with eBay.  eBay?  Don’t they already sell cars, you know, through eBay MOTORS??  Yes, they do.  Mostly used cars, though some dealers list their new car inventory on the site.  This, however, is different, as it is the first time a manufacturer has listed “all” of the new vehicles for sale like this.  The new site,gm.ebay.com, will allow customers to browse by make, model, trim, transmission, color, model year and maximum price.  The program is just a test for now.  It only is in California and only for 1 month (11 August – 8 September) and does not include Cadillac.  GM says that as many as 20,000 vehicles will be available through the system, depending on dealer participation (presently 225 CA dealers).  LaNeve said the program would be expanded and/or extended if GM and the dealers decide it is working.  He defined “working” as not necessarily increased sales (though that is clearly a sign of success), but also increased showroom traffic or development of leads for the dealers.

Consumers will be able to browse hundreds of California dealer online showrooms, ask questions, negotiate prices, and arrange financing and payment to purchase a new 2008, 2009 or select 2010 car, crossover or truck online.  Vehicles will be offered through eBay Motors’ traditional formats such as “Buy It Now” (where shoppers agree to pay the advertised price) and eBay’s innovative “Best Offer” option (where buyers indicate the price they are willing to pay and can negotiate online with the dealer for the vehicle).

The site also incorporates features that will allow consumers to compare pricing across models or participating dealerships, get tips and advice with a Buyer Checklist, and determine the value of their trade-in or whether their current vehicle may also qualify for government funded ‘Cash For Clunkers’ incentives.

“With 12 million individual car shoppers visiting our site every month, eBay Motors has unique insight into how people prefer to buy their cars,” said Rob Chesney, vice president, eBay Motors. “Through this program, we are helping GM dealers to extend their physical showroom while at the same time delivering to our buyers the great deals and broad selection they expect from eBay.”

While very limited in scope and duration, this program shows that maybe – just maybe – GM can indeed be the nimble operation that it needs to be to survive.  This program should increase awareness of, and generate interest in, GM’s brands and models.  That can only be a good thing for GM, and you the taxpayer/shareholder.

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