2009 LA Show: GM’s rotating CEO chair keeps on spinning

LOS ANGELES – Jeez. You can’t take a cross-continent flight these days without Government Motors switching interim CEOs.

After arriving here in La-La Land for Wednesday’s first press day for the auto show, I find out GM interim CEO Fritz Henderson resigned. GM says, until its brain trust can find a permanent executive to take the job, the automaker’s chairman of the board, Ed Whitacre will play the role of CEO until an “international” search for a new leader is completed.

Okay. Couple of things right off the bat.

• One: No one really thought Henderson was a long-term proposition. He was always seen as a comfortable insider to get GM though last spring’s bankruptcy, and that was about it. However, as events unfolded, he had his chance for a permanent parking spot at GM’s downtown Detroit offices, and simply struck out.

Strike One was the Opel debacle. Henderson wanted the Russian-backed Magna deal to go through, but GM’s board wanted to keep its crown jewels.

Strike Two was the last minute failure of selling Saturn to Roger Penske.

Strike Three was the botched sale of Saab to the Chinese-backed Koenigsegg group.

Sorry Fritz, you’re ouutta there.

• Two: What a way for GM to kick off this year’s LA auto show. Couldn’t it have held off on announcing this decision for 48 hours?

Henderson was scheduled as the keynote speaker for tomorrow morning's media keynote kickoff (never meeting a microphone he didn’t like, Bob Lutz is stepping in.)

So now, instead of us media types talking about the new Buick Regal, Cadillac CTS Coupe, or Chevrolet Cruze, Henderson’s resignation and GM’s rotating CEO chair has become front and centre.

Do you care who’s running GM?

Or does it really matter these days? 

Bailout Blues: Can Buick be the new Saab?

For all those Saabistas mourning the (potential) disappearance of their brand, the reality is, Saabs will end up living on in the most unlikely of cars: Buicks.

Take a look at the new 2011 Regal sports sedan that media have been first driving recently. It's existence tells all you need to know about what's happened to the auto industry in the last year.

The reality is, the Regal is a rebadged Opel Insignia, originally planned as a Chinese market only-Buick. In North America, it was going to be sold as the next Saturn Aura, and provide the same underpinnings for the next Saab 9-3.

But now that it will soon be popping up for sale in Canadian Buick showrooms, the amount of “Saabness” in the Buick is quite remarkable:

• Sophisticated, fourth-gen Haldex all-wheel-drive system. Check.

• A full range of turbocharged, fuel-efficient small engines. Check.

• Six-speed manual transmission. Check.

• European-tuned driving characteristics. Check.

The Regal may as well be wearing a Saab badge, like above. At least Government Motors will be getting (some of) our tax money back from all those kroners that GM (allegedly) sunk into Saab over the past twenty years.

But what about you Saab fans out there?

Ironically, the Regal is targeted at the same premium-Japanese brands that basically stole Saab’s customers in the 1990s. Can Buick be GM's entry-level luxury brand? Can Buick be the new Saab?

Would you consider all this Saab technology, but wrapped in a Buick body?

Bailout Blues: GM lost $5,100 US on each Saab it sold

Perhaps this is why potential saviours Koenigsegg wants to double the price of Saabs.

According to the Swedish government and their consulting firm KPMG, parent Government Motors had lost $ 5,100 US on each Saab it sold during the last eight years.

I’ll let the business press figure out whether or not this is all a bit of creative accounting to make sure Saab gets the EU to approve the Swedish government’s guarantee of a loan to Koenigsegg group. But it makes you wonder how Saab can survive moving forward.

The only good news? GM has hard a time selling Saabs. Imagine the losses if it had sold more.

Even with up to $10,000 discounts, only 41 Saabs were moved last month in Canada—less than the number of Panameras Porsche moved. In fact, for the first 10 months this year, Saab Canada sales are down by half.

Look. We all know under GM’s watch Saab’s so-called premium products became nothing more than gussied-up, mainstream Opel Vectras. But that’s the game Honda’s Acura, Toyota’s Lexus, and Nissan’s Infiniti plays as well. Now please, you can’t tell me Honda loses over five grand on each Acura TSX (nee Euro Accord) it sells.

So what of this KPMG report?

Do you really think what few Saabs were sold really cost GM $5,100 US each?

And if so, does Saab have a future selling cars for profit?

[Source: di.se via TTAC ]

Bailout Blues: Canadian Saabistas still waiting their fate

Some more news yesterday from south of the border about the up-in-the-air future of U.S. Saab dealers.

To recap: The target date to close Government Motors' sale of Saab, to Swedish boutique sportscar maker Koenigsegg, is Nov. 30. A step in the process this week was Koenigsegg rejecting 81 of Saab's 218 U.S. dealerships.

The news sheds little light on what holds in store for Saab shops here in Canada.

According to GM Canada, this action "has no impact" on its previously announced plans to no longer distribute Saabs in Canada as of the end of the year. But there's still hope for Canadian Saabistas.

"Koenigsegg, as the potenetial new owners of Saab, will decide the future plans for Saab in international locations as their business plans are formulated," GM Canada's Director of Communications, Stew Low, told The Crank.

So Koenigsegg could still come in and swoop up a few Canadian Saab dealers. And sell the cars for twice their going prices. Or not.

If the deal to sell Saab falls through—as GM's deal to sell Saturn to Penske Automotive Group did—GM would close its North American Saab shops.

Do think forthcoming Saabs (like the new 9-5, above) are worthy of staying in Canada?

Or do you think the Swedish brand should revert to being a European regional brand only, as it started out as?

[Sources: Automotive News, GM Canada]

Bailout Blues: Is Fiat giving up on Chrysler by canceling EVs?

You have to give Don Marchionne some credit.

After taking up a whole day last week spinning fairy tales about Chrysler’s vacuous five-year plans, canceling his U.S. arm’s non-existent electric-vehicle was a fresh piece of down-to-Earth decision-making.

But does this decision say more about Fiat's plans for Chrysler than the 7-hour PowerPoint presentation we received last week?

It’s one thing for Fiat/Chrysler head Marchionne to spin us on the doubling of global sales (including a 33 per cent increase here in Canada.)

With aging, unattractive and market-inappropriate products, bottom-of-the-barrel dismal quality ratings, a bare product development cupboard, and few North American resources on hand, I’d bet on the Leafs winning the Cup before any of The Don’s bold predictions comes true.

But what about the canning of Chrysler’s ENVI program?

On one hand, it makes a bunch of business sense.

If you remember, the quickee concepts (like the Dodge Circuit above) were little more than vapourware
—with engineering specs cut-and-paste from GM’s Volt program.

But  the EVs did serve the purpose of nailing down billions in Canadian and U.S. taxpayer bailout money. The Don’s argument is that the Fiat 500 will replace the EVs as Chrysler’s high-mileage vehicle that the government funds were directed towards the EVs.

But is that enough?

Is the canceling of the EVs just another sign in the lack of Fiat’s long-term commitment?

Or is The Don only admitting what no one wants to hear: That EVs are a waste of time?

Bailout Blues: Can Fiat keep Chrysler’s lights on to see through its Five Year Plan?

We waited five months and seven hours for this?

After an all-day press conference, Chrysler’s new Italian caretakers, Fiat, came through with little—if anything—that makes me change my mind that this enterprise isn’t going to make it to 2012, the year when reskinned Fiats will start selling in Chrysler showrooms. Maybe.

Except for the no-news of any plans for North American Alfa Romeos, the product plan varies little than what was leaked last week.

The Plan calls for deep-sixing next year the PT Cruiser and Jeep Commander, and the Dodge Dakota in 2011—something consumers have already effectively done, what with Chrysler’s U.S. sales off 30 per cent last month.

But the cars that no one is buying today—like the Sebring, Avenger, Caliber, etc.—will be gathering dust in Chrysler dealerships for another three years until their respective Fiat replacements come to the rescue.

So how in the name of Lee Iacocca does Fiat keep Chrysler in business until then?

The reality is, Chrysler is still in deep doo-doo. It’s still stuck trying to sell the low-quality, unattractive and getting-older-by-the-day products that currently no one’s buying.

Except for the niche Fiat 500 (that’s coming next year as a Chrysler) consumers will have no compelling reason to visit a Chrysler/Dodge/Jeep showrooms until 2012, expect for refreshed 300 and Charger sedans and a new Grand Cherokee and Durango—not exactly the types of products that are selling, n’est pas?

And then what? By then, Chrysler will be even further behind the competition.

Rivals will have jumped into the small car market (Ford Fiesta, Focus, C-Max, Mazda2, Chevrolet Spark, Aveo, Cruze, etc.) that the reskinned Fiats hope to compete in.

Even if customers suddenly flock to the Chrysler-badged Fiats, realistically, it will take at least a full generation of product (eight years) to win people back.

So, does Fiat have deep enough pockets to keep Chrysler afloat until 2020?

Here’s a hint: Google “Renault” and “AMC” for your answer.

Bailout Blues: GM says to Magna, No Opel for you

So, it looks like Opels aren't going to be built in Canada afterall. Hey, not that I'm one to say I told you so. But…

Look, like I’ve said since the start of this soap opera back last spring, there was little chance that Canadian auto parts magnate Frank Stronach's Magna and his Russian friends—or Fiat or whoever else was sniffing around—were ever going to get their hands on Government Motors’ crown jewels.

GM never really wanted to get rid of Opel. It was being forced into it because of its dire financial situation. If GM is serious about being a global automaker (i.e. NOT like Chrysler), they really don't have much choice but to keep Opel.

And just so you conspiracy theorists out there get any ideas, the U.S. Treasury (the majority shareholder in GM these days) is officially denying that the Obama administration had anything to do with GM’s decision.

Right. And if you believe that, they also have a bunch of empty Saturn stores they'd like to sell you, as well...

Anyway, this doesn’t mean its blue skies and sunshine for Opel going forward.

GM could still send Opel into bankruptcy. Ditch a lot of debt and manufacturing costs and Opel may (may!) be very profitable. Otherwise, it’ll continue to be a money pit.

Do you think this was the smart thing for GM to do?

Or do think Magna would have done a better job in making struggling Opel a success?

Bailout Blues: Fiat’s Five Year Plan for Chrysler sees less Chryslers

One week before Don Marchionne’s planned six-hour dog and pony show on what we can expect from the Chrysler/Dodge/Jeep/Ram/Fiat/Alfa Romeo North American product portfolio over the next five years, the Wall Street Journal has leaked some alleged details.

First off, it looks like Alfa Romeo is going to replace Chrysler.

To no one's surprise, the PT Cruiser and Sebring sedan are toast. Leaving the Town & Country minivan, redesigned 2011 300 sedan, and a Chrysler-badged Fiat 500 super mini.

Dodge has already lost its trucks (the Ram brand was spun recently spun off.) It will also lose the Caliber, Nitro, and Grand Caravan. The redesigned 2011 Charger, Challenger and Journey soldier on.

Jeep seems to be going back to its roots. The Commander, Compass and Patriot will be deep-sixed. Only the Wrangler and the new 2011 Grand Cherokee survive.

Potentially leaving the best for last, it looks like Alfa Romeo will be Fiat’s big shot in North America.

Incoming are the Fiat 500-based Mito supermini, Milano compact, a new midsize sedan and the over-$200,000 8C Competizione. Seriously.

So, what do you think of The Don’s plans?

Can Alfa make a successful return to North America as a full-fledged brand?

Would you buy a Chrysler Cinquecento?

[Source: Wall Street Journal]

Bailout Blues: Can Saab be salvaged by going upmarket?

Compared to its luxury-sport rivals like BMW, Mercedes-Benz or Audi, Saabs have always felt a bit overpriced, right?

But according to a Swedish newspaper, that hasn’t been the problem at all. In fact, its new owners want to double the average selling price of a Saab by 2016.

As part of the super car maker Koenigsegg Group’s business plans to grab a 600 million Euro loan to takeover Saab from Government Motors, the goal is to establish Saab at the upper end of the market. Way up.

The plan calls for a break even financial situation by 2011 with global sales of 115,000. Then, by 2016, sales of only 65,000, but at twice the average price of what you pay for a Saab today.

How, pray tell?

Part of the plan is to have an all-electric 9-3 by 2012, as well as hybrid versions of the 9-3 and 9-5.

All for the low, low investment of 600 million Euros, I guess.

So, over to you….

Do you think the Saab brand can go up market?

Would you buy a 9-5 Koenigsegg Edition for close to twice the current car’s price, say, about $100,000?

[Source: Dagens Industri via TTAC]

Bailout Blues: Magna’s Opel Interruptus

I optimistically thought that by the time I got back from being out of the country for a week, the whole Magna/Opel/Government Motors soap opera would be signed, sealed and delivered

But nooo…

Just to recap: Under a deal that had been expected to be signed last week GM plans to sell a 55 per cent stake in its struggling European Opel operations to Canadian-owned Magna and Russian state-owned lender Sberbank.

GM would retain a 35 per cent stake in Opel under the deal, and autoworkers would hold the remaining 10 per cent.

But now, it looks like European Union politicos are waking up and smelling the stinky roses of this deal.

The European Commission announced late Friday that it had doubts about Germany's offer to provide 4.5 billion euros ($6.95 billion Cdn.) in aid for Opel as part of the deal with Magna.

It’s concerned that “significant indications" that Germany had made the aid to Opel contingent on Magna being chosen as the winning bidder, a strategy that is contrary to EU competition rules.

Since this sad soap opera has been going on since last spring—which also saw Italy’s Fiat and China's Beijing Automotive Industry Corp. come and go as potential Opel suitors— why this issue is only being addressed now is beyond me.

Is it because, in the end, GM has no intention of letting go of Opel, and all of the associated technologies and engineering resources?

The Wall Street Journal thinks so

It cited “people familiar with the matter” that GM is “ready to keep control” of Opel if the EU blocks the sale to Magna, a strategy that, actually, makes a lot of sense for GM.

The big question is: Can GM find the money to go it alone?

Its former sugar daddy, Belgian investor RHJ International has moved on.

Do I smell even more government money than the $4.5B Euros heading GM’s way?

[Sources: Automotive News, Wall Street Journal]