Government Played No Role in Departure of GM’s Henderson

Lawmakers on both sides of the aisle say the ouster of General Motors Co. CEO Fritz Henderson was a decision that was rightly made by the auto maker’s board of directors, and not the government.

But speaking during an event here to announce GM’s $336 million investment in Chevrolet Volt assembly at the auto maker’s Detroit-Hamtramck plant, Michigan Congressmen Thaddeus McCotter (R-MI) and Sander Levin (D-MI) tell Ward’s last week’s decision to remove Henderson should not be a mystery.


“Henderson’s departure raised more questions, especially for the working families, than it answered,” McCotter says on the sidelines here.

“People that work at GM should have been told, and I think they need to know the reasons. Because your whole livelihood depends on working at GM on the line or in the boardroom, you want to know what’s going on, and this created more anxiety in an already uncertain time.”

But while taxpayer support requires GM to be accountable, the government should keep its distance from the auto maker’s day-to-day operations, Levin says.

Ron Bloom, head of the government’s autos task force, “wasn’t going to get into this,” Levin adds, noting “it’s not up to members of Congress or the White House to tell (GM) what to do. Once we start down the road of involving ourselves in these decisions, there’s no end to it. It’s up to them, and we made it very clear.”

GM Chairman Ed Whitacre, who temporarily has assumed the CEO post while a search for Henderson’s replacement gets under way, reportedly says he would like someone from outside the auto industry to assume the position.
GM invests $336 million in Detroit-area plant where Chevy Volt will be built.

However, pundits suggest federal pay restrictions likely will discourage talents such as Ford Motor Co. CEO Alan Mulally, who was lured from aerospace giant Boeing Co. with a multi-million-dollar compensation package.

Levin is more confident. “There are other ways to compensate executives, including issuing stock options,” he says. “Essentially, we more and more want people to be paid for performance.

“I think GM ought to be able to attract someone and pay them within the cap and say, ‘Help with the transformation of this company, and you’ll be adequately compensated if you succeed. If you fail, you won’t receive as much as you would have.’”

Meanwhile, GM’s investment announcement today brings combined Volt-related expenditures in Michigan to $700 million, covering eight state facilities.

The Detroit-Hamtramck facility will be the final assembly location for the Volt extended-range electric vehicle. The site will utilize tooling from Grand Blanc,; lithium-ion batteries from GM’s Brownstown Township, battery-pack manufacturing plant; camshafts and connecting rods from Bay City, and stampings and the Volt’s 1.4L engine-generator from Flint.

The $336 million investment announced today will pay for upgrades at the Detroit-Hamtramck plant, says Jon Lauckner, GM vice president-global planning.
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“We’re in the phase of installing the machinery and equipment in the body shop, in the paint shop and in general assembly,” he tells Ward’s. “It’s a brand-new vehicle based on our global compact-car architecture, so there’s a fare amount of work that needs to be done.”

Lauckner says Volt development is on schedule and product and process validation vehicles are scheduled to roll off the line in the spring.

GM says it hopes to sell some 8,000 Volts in 2011, and eventually ramp up volume to 60,000 units annually.

the list is topped by three familiar players: Hyundai

Hyundai, Kia and Subaru all report +40% increase in sales

If you've been paying attention to recent editions of By the Numbers, you'll have noticed that the amount of green on our chart below is growing. Month after month, more and more brands and manufacturers are managing to produce sales numbers that exceed the same month last year.

For October 2009, the list is topped by three familiar players: Hyundai (+49%), Kia (+45%) and Subaru (+41%). The South Koreans and this lone Japanese brand have bucked the trend all year, and now that other brands are beginning to sell relatively well, they are distancing themselves from the pack even further.

Their success shouldn't overshadow the rest of the industry, though, which includes many players surprisingly high on our chart. All four "Core" brands of General Motors (Chevrolet, Buick, Cadillac and GMC) posted positive numbers, and GM as a whole, which still counts sales from "non-Core" brands like Hummer, Pontiac, Saab and Saturn, managed to post a 4.1% gain in sales. Likewise, the Ford brand (+3.6%) and Ford Motor Company (+3%) both reported sales gains versus October of last year. The rest of the big Japanese manufacturers, meanwhile, were close behind but didn't quite manage to earn a green cell this month, while the Chrysler Group LLC landed farthest off the mark with a drop of 30.4%.

Have industry sales turned the corner? Are we headed into a bright future of 14+ million sales per year and green cells for every automaker? Hardly, though it's increasingly clear that new product, being competitive in key segments, and creative marketing and incentives are the best recipe for climbing out of the red.

*Brands and companies are both displayed in descending order according to their percentage change in volume sales. There were 28 selling days in October 2009 and 27 selling days in October 2008, so the change in monthly sales volume will be different than the change in the average daily sales rate (DSR) for each brand/company.

Brand	Volume %	10/09	10/08	DSR*%	DSR 10/09	DSR 10/08
Hyundai	48.92	31,005	20,820	43.60	1,107	771
Kia	45.26	22,490	15,483	40.07	803	573
Subaru	40.66	18,169	12,917	35.64	649	478
Cadillac	21.60	11,602	9,541	17.26	414	353
Mercedes-Benz	21.32	18,193	14,996	16.99	650	555
GMC	20.44	25,423	21,109	16.14	908	782
Lexus	19.77	19,502	16,283	15.49	697	603
Volvo	19.37	4,437	3,717	15.11	158	138
Buick	18.46	9,053	7,642	14.23	323	283
Porsche	15.07	1,642	1,427	10.96	59	53
Chevrolet	8.50	116,436	107,313	4.63	4,158	3,975
Nissan	7.69	53,664	49,833	3.84	1,917	1,846
Volkswagen	7.23	17,037	15,889	3.40	608	588
Ford	3.57	119,072	114,969	-0.13	4,253	4,258
Honda	-0.01	75,751	75,756	-3.58	2,705	2,806
Mercury	-1.14	6,676	6,753	-4.67	238	250
Audi	-1.14	7,358	7,443	-4.67	263	276
Toyota	-2.32	132,663	135,818	-5.81	4,738	5,030
Acura	-3.53	9,751	10,108	-6.98	348	374
Lincoln	-8.97	6,735	7,399	-12.23	241	274
Infiniti	-9.29	6,451	7,112	-12.53	230	263
Pontiac	-18.45	10,646	13,054	-21.36	380	483
BMW	-18.61	16,443	20,203	-21.52	587	748
Mini	-20.79	4,176	5,272	-23.62	149	195
Dodge	-22.21	26,265	33,763	-24.99	938	1250
Chrysler	-35.61	12,815	19,903	-37.91	458	737
Jeep	-36.80	13,500	21,360	-39.05	482	791
Mitsubishi	-48.34	3,867	7,486	-50.19	138	277
Suzuki	-49.89	1,745	3,482	-51.67	62	129
Saturn	-57.79	3,623	8,583	-59.30	129	318
Smart	-70.44	661	2,236	-71.49	24	83
Saab	-74.03	513	1,975	-74.95	18	73
Hummer	-77.56	307	1,368	-78.36	11	51
Mazda	N/A	N/A	N/A	N/A	N/A	N/A
COMPANIES
General Motors	4.11	177,603	170,585	0.40	6,343	6,318
Ford Motor Company	3.07	136,920	132,838	-0.61	4,890	4,920
Nissan NA	0.28	60,115	59,945	-3.30	2,147	2,220
Toyota Mo Co	0.04	152,165	152,101	-3.53	5,434	5,633
American Honda	-0.42	85,502	85,864	-3.98	3,054	3,180
BMW Group	-19.06	20,619	25,475	-21.95	736	944

That company was capitalized with more than 600 million shares that were meant to be worthless

When General Motors entered into Chapter 11 bankruptcy over the summer, its bad assets were moved into a firm called Motors Liquidation Company (MLC). That company was capitalized with more than 600 million shares that were meant to be worthless; however, quite the opposite has happened: with its shares priced at $0.60 per, MLC now has a market cap of $370 million. How did that happen?

Investors engaged in "naked short-selling" is how it happened. Short sellers usually procure an actual 'tangible' stock from a broker or investment house – 'tangible' meaning a share unit comprising the finite number of a company's total shares – as collateral when they take a short position. The naked short seller doesn't borrow any shares, taking a position before it can be determined if there are any shares available. This allows them to essentially create a position that isn't beholden to the ideal of a "structured" market.

Earlier this year the SEC put the kibosh on naked short selling, and required investors who had done it to get the tangible shares they need to hold their position. Since there are fewer shares to be had, and those naked traders are trying to absorb anything available to cover their positions, the price has yet to decline. Quite simply, no one can make money off of it.

Well, except for the holders of new GM shares. The SEC regulations also called on naked short sellers to close out their positions if they couldn't get the tangible stocks to cover. The investors who can't get actual shares to borrow are having to buy stock from "new" GM shareholders – at much higher prices. Eventually MLC shares will be worth zilch. Until then, the wacky world of finance reigns...

BusinessWeek calls out 50 Ugliest Cars of Past 50 Years

Beauty, as they say, is in the eye of the beholder. While some cars seem to be almost universally loved for their gorgeous lines and undeniable sense of style – the Lamborghini Miura and Shelby Daytona Coupe certainly come to mind. Others, such as the new Honda Accord Crosstour and even the latest Nissan GT-R, not to mention nearly everything currently wearing the Acura badge, sport more debatable duds.

And what of the car that's most commonly associated with the green movement? Of course, that would be the Toyota Prius, and we know that some happen to find the car rather attractive... whether that's for its slip-through-the-wind styling or fuel mileage – made possible in part by that styling – its owners happily enjoy. According to BusinessWeek, though, the second-gen Prius is one of the 50 Ugliest Cars of the Past 50 Years. Not a distinction any owner wants their car to carry.

Take heart, Prius owners. There are a number of questionable vehicles on the list. For instance, the classically boxy Volvo 240 isn't ugly at all... it's purposeful and practical. Neither are the Lamborghini LM002, 2002 BMW 7 Series, Tata Nano or Toyota iQ deserving of inclusion on this unflattering list. Lastly, does anyone really think the DeLorean is that unattractive? Unabashedly '80s sure, but ugly? Nah.

Hurst completes the muscle car trifecta with Mustang, Camaro

2010 Hurst Performance Series Camaro - Click above for a high-res image gallery

We can't believe it's been just a year since Hurst unveiled its stunning white and gold Hemi Challenger. Since that time we've seen a few variations, including different color combinations and the Competition/Plus model, and we even got to see how the cars were built. Up to this point, all of Hurst's production models have been Challengers, but when the company showed off a one-off Camaro and Mustang convertible, we figured production versions wouldn't be far away. We were right.

Yesterday afternoon, Hurst pulled the covers off the new Performance Series Mustang and Camaro, each with a slightly different take on Hurst's classic color combinations. Both cars get the kind of performance upgrades you would expect from Hurst including a supercharger, Magnaflow exhaust system, Eibach suspension components, Hurst Competition/Plus shifters and 20-inch wheels and tires. Each car also gets Katzkin leather inserts, embroidered floor mats, and a dash plaque. Just 50 examples of each will be built, and judging by how fast the Challengers sold, you will need to put your order in quickly if you want one. Follow the jump for full details on both cars, and be sure to check out both of the high-res galleries below.

2010 Hurst Peformance Series Camaro

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Hurst Peformance Series Mustang

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Word has it he's already mastered Barcelona

Ferrari just announced that injured driver Felipe Massa could be back in the saddle as early as Monday. Massa hasn't been in an F1 car since July's Hungarian Grand Prix, when a spring from another car flew up and hit him above his eye, fracturing his skull.

The first time he has even been back on track was last week when he took the wheel of a kart. Because of testing bans in place this season in F1, Massa can't drive the current car he was running until Hungary. As he gets back up to speed, the FIA has granted him permission to drive a 2007-spec car fitted with GP2 tires.

Massa has also spent time on Ferrari's racing simulator. Word has it he's already mastered Barcelona and is working hard at beating the Interlagos circuit now. Before taking the wheel of the 2007 car, he still needs to pass an examination, but once he's cleared, he could be on track in Italy by Monday. This will be testing only as the driver isn't expected to compete for Ferrari any more this season.

Cars and Coffee roadshow headed for New England

Cars and Coffee, the informal and inclusive wheeled hootenanny originated in Irvine, California has been spreading across the country faster than swine flu. There's no stage with bad cover bands, not a trophy in sight, but you're always likely to see some astounding vehicles.

Herb Chambers, New England dealership juggernaut, has thrown his support behind a New England gathering. "Herb himself is a super car enthusiast," says John Covell, Director of Marketing for the Herb Chambers Companies, "He thought that others would enjoy it." A new BMW dealership in Sudbury, MA, where the event is being held this Saturday, October 10th, is a supporting cast member.

Cynics may dismiss this as another ploy akin to inflatable dinosaurs, but when was the last time you were invited out by a car dealership to drink free coffee and ogle a McLaren F1 on a Saturday morning? Running from 7-10 AM, the inaugural event will be over before many people's days get under way. "Herb is passionate about cars and he's passionate about this business. If our customers understand that we share their passion, that's a good thing," sums up Covell. Hey, if he doesn't mind us drooling all over his McLaren, we'll agree.