Author Archive for Michigan Automotive News

Whitacre: GM’ close to hiring new CFO

Board Chairman and CEO Ed Whitacre Jr. said in a Web chat with reporters Tuesday that GM has a good candidate and should have news in two or three weeks.

AP PhotosIn this combo made from July 10, 2009 file photos, General Motors’ Chief Executive Frederick “Fritz” Henderson, left, and company chairman of the board Ed Whitacre Jr. are shown in Detroit.
General Motors Co.’s interim chief executive says the company is getting close to hiring a new chief financial officer.

Board Chairman and CEO Ed Whitacre Jr. said in a Web chat with reporters Tuesday that GM has a good candidate and should have news in two or three weeks.

It was the first time that a GM official has acknowledged plans to replace CFO Ray Young.

Young is the second top executive to be ousted by Whitacre and the new board. CEO Fritz Henderson resigned abruptly on Dec. 1.

Whitacre is serving as interim CEO until a replacement is found.

EPA declares tailpipe emissions a threat to public health; What’s that mean for automakers?

The same day General Motors announced it will invest $700 million in Michigan to build the environmentally-friendly Chevy Volt, the Environmental Protection Agency declared that tailpipe emissions and other greenhouse gases pose a threat to public health by contributing to global warming.

AP File PhotoA tailpipe emission.
The same day General Motors announced it will invest $700 million in Michigan to build the environmentally-friendly Chevy Volt, the Environmental Protection Agency declared that tailpipe emissions and other greenhouse gases pose a threat to public health by contributing to global warming.

As the Associated Press reports, the finding sets the stage for unprecedented federal limits on emissions from power plants, factories and cars.

So, what does that mean for Michigan automakers?

In the short term, not much.

The Obama administration and automakers already struck a groundbreaking deal back in May on higher mileage and emissions standards that will take effect in 2012 and must be achieved by 2016.

“Overall it doesn’t change the calculus for the auto industry.” Dave McCurdy, chairman of the Alliance of Automobile Manufacturers told the Detroit News.  “We’re already covered.”

But the long-term is less clear as the EPA claims authority to set tailpipe emissions, a move Michigan lawmakers have been fighting against for years, much to the delight of automakers and the chagrin of environmentalists.

U.S. Rep. John Dingell didn’t take kindly to the idea of EPA regulation, telling the News, “Such regulation will result in a glorious mess, and regulation of greenhouse gas emissions should be left to Congress.”

While he didn’t directly discuss the effect on automakers, Dingell has been criticized for opposition to industry regulations, with Time Magazine recently chastising him for “resisting, in succession, tougher safety regulations, more-stringent mileage standards, relaxed trade restrictions and virtually any other measure that might have forced the American automobile industry to make cars that could stand up to foreign competition.”

Regulation isn’t the only card the Obama administration is playing in an attempt to make automakers green, it’s also helping foot the bill for U.S. companies, for better or worse.

Auto bailouts for General Motors and Chrysler were tied to restructuring plans aimed at making the companies viable leaders in the automotive technology needed to build fuel-efficient cars, and the House in September approved a plan (headed to the Senate today) to allow the Energy Department to spend up to $200 million more each year on research and development of such green tech.

“There is no doubt that in the years ahead more Americans will be driving hybrids, plug-in hybrids, battery electric vehicles, and cars and trucks powered by hydrogen fuel cells,” U.S. Rep. Gary Peters said at the time.

“The only question is whether these new technologies will be researched, developed and manufactured here in the United States, creating American jobs, or whether this technology will be built overseas.”

While everyone can agree with that sentiment, the EPA finding and potential regulation raises the question of whether it’s the government’s role to make sure this happens.

Chrysler and Fiat could have separate CEOs within next two years

Sergio Marchionne, who has crisscrossed the Atlantic since last summer running Italian automaker Fiat and U.S. carmaker Chrysler, said Monday he expects to divide his leadership role at the companies within two years.

AP File PhotoFiat and Chrysler CEO Sergio Marcionne.
Sergio Marchionne, who has crisscrossed the Atlantic since last summer running Italian automaker Fiat and U.S. carmaker Chrysler, said Monday he expects to divide his leadership role at the companies within two years.

Marchionne, installed by the U.S. government as CEO of Chrysler Group LLC following the automaker’s emergence from bankruptcy in June, said he was working “24-7″ to manage the transfer of technologies from Fiat Group SpA to Chrysler, a key piece of the U.S. company’s revival. He declined to elaborate, but indicated he would not keep running both companies simultaneously for an extended period of time.

“There’s got to be this blood transfusion and it needs to happen at the speed of light,” Marchionne said during an address to the Peterson Institute for International Economics. “This cannot go on forever so certainly within the next 24 months we’ll find a more permanent solution, either there or here. I’m not threatening the Italian side with a departure from Italy, but we need to find a solution to this issue.”

Marchionne confirmed that the automaker plans to build a 1.4-liter engine for the Fiat 500 minicar at Chrysler’s engine plant in Dundee, Mich., and the 500, to be built in Mexico, will roll off the assembly line late next year. Turin-based Fiat took a 20 percent stake in Chrysler earlier this year as part of its exit from bankruptcy protection and can increase its holdings to 35 percent by creating smaller, more fuel-efficient vehicles.

“I know we’ll get it,” Marchionne said of the increased stake in Chrysler. “I just want to get this house right.”

Marchionne attempted to keep expectations in check, telling the think tank audience that Chrysler’s recovery will be gradual and his leadership team was “not planning miracles” but committed to bringing “rapid change” to the automaker. He said Chrysler broke even in September and October and was dedicated to a five-year plan to overhaul the automaker’s vehicle lineup and double sales.

“We’re not perfect. We’re going to continue to screw up,” Marchionne said. “I think we’re screwing up a lot less than we did six months ago.”

He credited the Obama administration with pushing the U.S. auto industry to restructure itself and said European nations need to do more to reduce overcapacity in the industry. In Germany, for example, he said not a single plant had been closed since World War II despite significant technological advances in recent decades.

Chrysler has received roughly $15 billion in aid from the U.S. government and through early November, the Auburn Hills, Mich., car company still had about $9 billion of the funds available. Chrysler has said it intends to repay the loans by 2014.

Marchionne said he relishes the challenge of leading Chrysler out of its morass.

“There will always be naysayers out there,” he said. “I actually don’t mind them. I also don’t mind being an underdog and to be given a chance to prove them wrong.”