GM's changes rattle stability

GM's changes rattle stability http://tinyurl.com/2bh2l32
Leadership swaps, rush to IPO may not ease investors' minds
DANIEL HOWES
General Motors Co. is in a box of its own making.
In hurrying to project leadership stability ahead of an initial public offering filing, possibly as early as today, the automaker also risks more turmoil among the insiders who will have seen four CEOs in less than two years. Come Sept. 1, Ed Whitacre Jr. will be out, Daniel Akerson will be in and interested folks could be excused for wondering whether the new bosses know what they're doing.
"It's a bummer that Ed's leaving in the third inning of this game," a ranking GM source close to the situation told me Monday. "People had gotten used to Ed ... and they kind of liked him."
Whitacre is un-GM personified. He'll casually drop in at meetings unannounced; visit a plant in one of is trademark "drive-bys"; grab lunch at the food court in the Renaissance Center. He also, in business-speak, reduced the "span of control" of many execs even as he more sharply defined lines of authority -- and accountability.
Like him or not, enjoy his Texas drawl or not, Whitacre-era results are boosting confidence as much inside the company as they appear to be on the outside. The challenge for Akerson is leveraging his financial acumen to bolster external credibility without losing the internal momentum that gives GM a future it can actually sell.
The paralyzing "am-I-gonna-get-fired" fear of the early Whitacre days is dissipating in favor of a new cultural ethos that favors speed and decisiveness, ranking executives tell me. Akerson can and should keep the pedal to the metal, but sowing fear and arbitrary change is probably as detrimental to the IPO business case as instability in the CEO's office.
The headlong rush to peddle shares in the new GM to investors clearly is a political imperative of the Obama administration, desperate for a win to vindicate its massive intervention in the auto industry. And an IPO is the quickest way for GM to shed the sales-killing "Government Motors" wrap -- in theory, at least.
In that, if for different reasons, the feds and GM are in perfect alignment. They're also both in a hurry. The problem is context and a few tiny problems with the lackluster market, balky consumers and a selling rate running at historic lows.
Would-be GM investors will need to be persuaded that owning a piece of GM is a smart play for the future amid a presently slowing economy, slumping consumer confidence, sideways equity markets, weaker growth in Europe and China and the prospects that tax burdens for many Americans are set to go up, not down, after Jan. 1.
Whitacre and Akerson, expected to meet today in Detroit with GM executives, can spin this battlefield promotion all they want. But this changeover was hastily executed because the prospect of Whitacre selling the company on a grand "road show" only to sashay out the door at the end of the year or early next exposed him and GM to too much legal liability.
Just asking, but shouldn't they have thought of this before?
Of course they should have, which shows that the Masters of the Universe now populating GM's board and the Team Obama fixers who put them there can make mistakes, too. The test is how they fix them.
Given the risks Whitacre faced -- sell an IPO, bolt for home in Texas and expose yourself and GM to lawsuits -- and the hurry-up schedule to do an IPO, Akerson may have been among the few legit moves for the directors to make.
At least he can claim to have been at the new GM since its debut, to be among the bluntest noses among GM's outside directors, to have been atop auto czar Steven Rattner's short list to head GM coming out of bankruptcy, which he was.
Beyond that, there were few plan Bs. Not enough time to woo an outsider, whose learning curve and style risked even more turmoil. Too soon to promote CFO Chris Liddell, a Microsoft Corp. refugee, or Tim Lee, president of GM International, or Mark Reuss, president of GM North America, to the top job. Any of them, but especially Reuss, would have elicited howls of "not ready for prime-time."
The howlers probably would have been right, too. Bankruptcy and the early Whitacre purges depleted GM's ranks of management talent with deep operating experience. Government pay caps make it challenging, but not impossible, to attract outsiders who cannot afford to take the financial risks that the likes of Whitacre and Akerson can. And GM's new board isn't about to give the top job to a GM veteran without thorough seasoning.
Another new era for the company that "never" changes top management is arriving. The trick is bringing everybody else along because even the most deft CEO can't do it all by himself, as the past three inhabitants of the top chair could attest.
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Perhaps, but GM is still the number one selling brand, year to date in the US. Nothing shows success better than the sales figures and the fact that GM has earned a huge profit in the past two quarters.

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Anybody can sell autos when $177 billion of capital wiped out, with taxpayers picking up more than $100 billion of GMs mess.
Now can they do it without the keep on sucking? Highly doubtful. GM is a turkey trying to fly.
On 8/17/2010 8:26 AM, Mike wrote:

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Like I said regardless of your personal opinion. GM is still the number one selling brand, year to date in the US and nothing shows success better than the sales figures and the fact that GM has earned a huge profit in the past two quarters.

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Bet it will not last long. GM is getting termination notice by the government. IPO is in the making.
If someone had the money, buy GM, close NA completely and import the models from China. Or sell GM off to the Chinese.
Even I might buy GM China if I could get it in Yuan as USDs are worthless, loosing 18% or so against the Yuan in the last few years.
On 8/18/2010 7:20 AM, Mike wrote:

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As with most of your personal opinions you will be wrong again.

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On 8/17/2010 5:23 AM, Jim_Higgins wrote:

They need to find someone with the cash/risk and then firesale GM. GM will not go for much, as any investor in this should consider GM high risk. And really what they are after is GN China.
Might go down like it did in Canada, suck the government taxpaers for billion then lay people off. Tehn import them like the Aveo.
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It is interesting to read about the new management. They seem to have done something the former management never did - talk to the empleoyees that is. By talking to the employees all of a sudden the employees were allowed to do what they are good at. If that is about to change back now to the old ways of management arrogance seems likely and then GM is doomed - again.
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When it comes to who imports the biggest majority of vehicles it sells in the US, none comes even close to Toyota. Toyota imports well of 50% of everything it sells in the US, according to the US Department of Commerce site. To add insult to injury Toyota takes all of the profits earned in the US, back to Japan US Corporate Tax free to be redistributed back the Japanese corporations for R&D/

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Mike, as usually you are full of it. Many Toyota vehicles have more NA content than a GM does. Take the GM Aveo.
As usually, spewing the good line and you don't even own a GM...can't eat your own dog food?
On 8/18/2010 7:18 AM, Mike wrote:

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What does North American parts content have to do with it? What I said was the Toyota imports more than 50% of the vehicles it sells in the US and ALL of the parts and materials in them are imported. As to parts content, most of the parts included in the NAP label are actually only assembled in north America of imported parts and materials, dummy.

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Like I said - check out the origin of the GM Aveo. As if GM does not import the same parts.
Remember the Toyota gas peddles? Made by NA union, Japanese ones used overseas didn't have problems. And to add insult, GM used them too and Toyota honored the recall!
On 8/18/2010 6:57 PM, Mike wrote:

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Even if you were correct, the Aveo amounts to around 1% of GM US sales. Do you think that compares to the more than 50% of Toyotas imported into the US?

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