ON THE TABLE
Tuesday, May 5, 2009 at 03:56PM May 6, 2009
Fritz Henderson. Publisher's Note: Autoweek conducted an exclusive interview with GM CEO Fritz Henderson in which GM's interim leader suggested that the Chevrolet Corvette's future was secure, even as GM radically alters its corporate structure and is now taking its marching orders from Washington - with an assist from the UAW. Henderson went on to say, according to Autoweek, that there will be a next generation C7, but amazingly enough couldn't exactly say when that might be. According to AW, Henderson drives a Corvette and is a Corvette "enthusiast" and is bullish on the car, and said that "Corvette pays its rent." I'm sorry, but Fritz has zero credibility when talking about the Corvette, even if he drives one. After all, this is a company that has consistently squandered every last opportunity to use the Corvette as a technological showcase for the corporation's considerable technical abilities, leaving it to rot under the auspices of the small-minded minions who toil in Chevrolet marketing. Any other company on the planet would have used Corvette Racing's success at the 24 Hours of Le Mans as a corporate image enhancer, but not GM. No, they'd rather dump more money into NASCAR so that their message can get lost in the relentless cacophony of all the other crashing messages fighting to be heard. Henderson says that Corvette's future is secure? We'll see about that. Show me a definitive timetable for the C7, and then show me a marketing plan that uses Corvette's technology and its on-track achievements to the benefit of the entire corporation, and then we'll talk. Until then, he's just selling air, and Corvette enthusiasts should be very worried. - PMD
GM's True Believers. Publisher's Note: Yes, there are quite a few left within the corporation, in case you were wondering. There is a move afoot by the True Believers to salvage the goodness of the G8's architecture and reposition it for a post-Pontiac future as part of the newly configured GM. Think RWD Chevrolet Impala (with police pursuit offshoots) and other intersting variants. The idea being that a great car is a great car and that it would be best if GM made every effort to protect one of its real assets. So let's hope the goodness of the G8 lives on in other applications, and the True Believers left at GM get their way. - PMD
Sergio Marchionne. We have to hand it to Fiat's main man, because he's wheeling and dealing his way around the auto world orchestrating deals, while expending the least amount of cash he possibly can in the process. And he seems to be making it all work. His latest angle? Taking Opel off of GM's hands. Not with Fiat money mind you, but with German government money. If Marchionne moves fast enough - and before these various interested parties think any of this through - he may just be able to pull this whole thing off, with only a minimal cash outlay by Fiat. Just call him the industry's new Mr. Slick.
The auto industry. Like it or not, the Democrats are proposing a bill that would provide cash vouchers to people who trade in cars and trucks for new, more fuel-efficient vehicles. The announcement about the cash-for-guzzlers program was made by Rep. John Dingell on Tuesday. Dingell said in a statement that if this bill is approved by Congress and signed by President Obama, the program would lead to approximately one million new-vehicle purchases. The details break down like this: Buyers would get a $3,500 voucher if they trade in a car (that gets less than 18 mpg) for a new car that gets at least 22 mpg. Vouchers of $4,500 would be awarded if the new car purchased gets at least 10 mpg more than the one being traded, according to the statement. There are plenty of details left unexplained by the Dingell announcement, however, such as the minimal age requirements (if any) for the vehicle in question, and whether the country of origin of the vehicle would be a factor. The U.S. auto industry desperately needs the jump start that a program like this would give, as it has worked wonders in markets where it has been employed. In the German market, for instance, sales were up 40 percent in March and 19 percent in April after the program was instituted in February.
GM. Those folks who have been accused of not being able to hit the broad side of a barn when it comes to designing, building and selling cars seem to be doing just fine in the world's largest automobile market. GM sales in China rocketed up 50 percent in April to an all-time monthly record of 151,084 vehicles. Powered by heated demand for the Excelle sedan, Buick sales climbed 63.6 percent in April to 38,071 units. GM's minivehicle joint venture - SAIC-GM-Wuling - saw sales surge 60.6 percent from a year earlier in April, to 95,544 units. GM's ultimate goal is to double sales in China to about two million vehicles a year within the next five years. If GM survives, will it move its headquarters to Shanghai?
Chrysler. Publisher's Note: A few readers have written in to ask why I haven't written a column about Chrysler since the bankruptcy filing. We know how the company arrived at the position it's in, and we know now that it was functionally belly-up six months ago. I will say that anyone who thinks this bankruptcy is going to mean the automatic salvation of the company is kidding themselves. Let's look at the facts of the matter. Fiat's Sergio Marchionne is Chrysler's only hope, but let's examine what he's doing a little more closely. He's promised minimal money to get control of 20 percent of the company, suggesting that Fiat's technology is much more valuable than cash. Uh, okay, if he says so. But that still doesn't mitigate the fact that Chrysler doesn't have enough new products coming to sustain the company in the market place for 24 months, which is when Fiat's new models will allegedly hit dealerships. That's two whole years, in case you missed it. Chrysler doesn't have that kind of time. As I've stated repeatedly over the last few weeks in "On The Table," if Chrysler emerges from bankruptcy and can hang on, then Fiat gains a foothold in this market and can mold the new company any way it wants to take it. In the meantime, thousands more jobs will be lost, factories will permanently close, and the dealer count will be decimated. If Chrysler doesn't survive, then Fiat still gets a foothold in this market, only it will then be able to "cherry pick" what assets it wants from Chrysler while discarding the rest of the company, and Fiat North America will be established. And guess what? Thousands more jobs will be lost, factories will permanently close, and the dealer count will be decimated. In other words, this isn't going to be good, by any stretch of the imagination. - PMD
InBev. The eye-opening part of Chrysler's bankruptcy filing? The second largest creditor was BBDO, its advertising agency, to the tune of $58 million. And GM's agencies are said to be dramatically exposed with that company's looming deadline with the government just around the corner, too, to the tune of as much as $100 million. Not Good doesn't even begin to describe the situation. Now, after its bankruptcy filing, companies dealing with Chrysler, especially in the media, are refusing to run ads without an upfront payment. Can you blame them? Companies have abused their ad agencies for years over payments, but now that the ugly reality has hit over this Chrysler bankruptcy maybe things will change for the better for the agencies, or at least they'll get smarter. But the most egregious culprit currently running loose today? InBev, the Belgian company that bought out Anheuser-Busch last fall. Known as ruthless cost-cutters with no respect for brand legacies or heritage, they regularly abuse everything and everyone in their path in search of cash. The latest atrocity? InBev up and announced that it was going to take up to 120 days to pay its bills. Here's a toast to any company or ad agency that stands in the way of these sleazeballs. How would we handle it? You want a TV commercial InBev? First deposit $2 million in our bank for the research and creative development. Then, when the creative is finished and approved, you will be required to pay 95 percent of the media buy up front, with the other 5 percent due in 120 days. That's for one ad. On second thought, go fuck yourselves.
David Letterman. The CBS late night comedy host conducted an embarrassingly lame and fawning interview with Tesla's leader, Elon Musk, last week that was painful to watch. Letterman basically exposed himself as someone totally clueless about the auto business, electric vehicles and hydrogen fuel cell vehicles, dismissing the domestic automobile manufacturers in stereotypically egregious fashion in the process. We found it especially interesting that Letterman bad-rapped fuel cell vehicles, considering that one of Rahal Letterman Racing's former main sponsors was Honda, a company that has made a huge investment in fuel cell vehicles. Here's a tip for the future, Dave: Stick to what you know - which is being funny - and leave the auto business to people who actually have a clue.
See another live episode of "Autoline After Hours" hosted by Autoline Detroit's John McElroy, with Peter De Lorenzo and auto industry PR veteran Jason Vines this Thursday evening, May 7, at 7:00PM EDT at www.autolinedetroit.tv. By the way, if you'd like to subscribe to the Autoline After Hours podcasts, click on the following links:
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