Randomly Noted

The major automakers reported their December sales today and for the 11th straight month, they saw gains. Interestingly, sales of autos were down sharply for some of the automakers while light trucks and SUVs were up sharply – perhaps yet another sign of people feeling a little more economically comfortable.

In terms of auto sales, Chrysler had 46.5% fewer sales this past December then the year before. GM was off 20.6% and Toyota was down 16.1% The decline at GM put it in fourth place in terms of number of cars sold.

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One of the fascinating elements of the story of General Motors returning as a publicly traded company (for those who follow Wall Street) is the way the offering is being sold around the world. As part of its registration papers with the Securities and Exchange Commission, the company has listed 20 banks that are part of its selling group. And there appears to be one eye-opening new member of the club and one eye-opening admission.

Listed in tiny print in the lower left-hand corner of the registration statement is an underwriter called “CICC.” That appears to be China International Capital Corp. That’s an interesting statement of where we are in the world today – GM and the U.S. government (a big owner of GM stock because of the government bailout of the automaker), have turned to the Chinese to help take public one of the most American brands you can find (the other two being Mom and Apple Pie). This blogger can’t recall a Chinese bank being involved in such a high-profile transaction here.

On the omission front – UBS. The U.S. government had gone after UBS in recent years to get its hands on the names of thousands of U.S. citizens who parked money offshore to evade taxes. Interestingly, another Swiss bank, Credit Suisse, is part of the GM underwriting.

The UAW says it will try to claw back benefits it gave up when the U.S. auto industry nearly went under. Great. Just when there’s a glimmer of hope that at least two of the U.S. auto makers – Ford and GM – will survive (I’m still not sure about Chrysler), here comes the United Auto Workers with their old-thinking. The global auto industry is in such flux, the post-crisis UAW needs to be a partner, not a problem. Nissan-Renault CEO Carlos Ghosn, visiting our newsroom this week, spoke of the multi-billion-dollar bet his firm is placing on the advent of electric vehicles. I can’t tell you if electric cars will take off in a big way or experience a slow climb in popularity. What I do know is there will be more electric cars on the road in coming years, just as there are increasing numbers of hybrids. It’s also clear that the established auto makers face mounting competition from upstart rivals, including a surging Hyundai and a pack of Chinese up-and-comers. Let’s hope the latest UAW rhetoric is simply a cheap effort to excite the rank and file rather than a sign the leadership has learned little from the American industry’s near-death experience.

This week’s Steven Rattner-Paul Ingrassia on-stage chat at a Dow Jones conference was lots of fun – if you’ve been around the car industry for a while, there’s no such thing as too much automotive inside baseball and gossip. At the end of the day, however, what has stayed with me is that we really don’t know how much money got pumped into General Motors and Ford during the crisis of 2008-09. Rattner, explaining and defending his stint as President Obama’s auto czar, maintains American taxpayers would get most of their money back if GM were to IPO today. But he himself admitted this doesn’t include the billions pumped into GMAC, GM’s erstwhile financing arm. And it wouldn’t seem to include the billions poured into GM and Chrysler in the months between November 2008 and the creation of the federal auto task force in February 2009 – a period during which the government scrambled to simply stabilize the companies prior to a radical restructuring. Until someone forensically analyzes ALL of the costs of salvaging GM and Chrysler, Rattner and others will continue to portray the automotive bailouts as less costly than they really were. Check out Deal Journal’s take on this issue.

GM CEO Ed Whitacre’s shakeup continues as Steve Girsky becomes vice chairman. Girsky’s rapid ascent, from a *mere* board member to one of Whitacre’s two top lieutenants (the other being recently arrived CFO Chris Liddell) represents the boss’s efforts to create a crisp, no-nonsense culture and eradicate the old woolly one.  Girsky will remain on GM’s board, thus providing Whitacre with Girsky-ite allies among the directors and within the executive ranks. Girsky, who is 47 years old, is plain-spoken and wry, yet he’s also an optimist. These are traits General Motors needs as it scrambles to become a financially strong firm with a robust pipeline of desirable new vehicles.

Motor wunderkind Wolfgang Bernhard is back at Daimler – yet another recycled auto exec back in a top job at a company he once worked for. Paul Ingrassia’s new book, Crash Course, details how the insularity of the Detroit auto makers contributed to their downfall as complacent chiefs and enabling boards shut their eyes to reality. The European auto industry is no different, as the demise of DaimlerChrysler – orchestrated by clubby continentals – demonstrated. Bernhard did some fine work at Volkswagen – and, back in the day, at Chrysler – but not enough, judging by the fact that Chrysler landed in bankruptcy and is now the least likely of the Detroit Three to survive. Daimler itself is headed by another retread – albeit a very smart one named Dieter Zetsche. But as savvy as he is, Zetsche presided over Chrysler’s downhill slide only to ascend to the top Daimler spot after Juergen Schrempp (aka the architect of the Chrysler takeover) was pushed out. What’s heartening is that Ford and General Motors are now headed by non-automotive outsiders. Under former Boeing exec Alan Mulally, Ford’s showing terrific progress. It will be interesting to see how GM fares under former AT&T boss Ed Whitacre.

Ed Whitacre has decided to be GM’s permanent CEO, in addition to serving as its Chairman. Can he do for GM what Alan Mulally did for Ford? WSJ.com’s Deal Journal blog observes that having the same guy serve as CEO and Chairman is generally frowned on in corporate governance circles. Ironically, it was GM itself which advocated splitting the Chairman’s role from that of CEO – but that was in the early 1990s, when the auto maker’s straits weren’t quite as dire as they are now. Whitacre and his team must move fast to extricate GM from the U.S. government’s grip by making profitable cars people want to buy. If I were advising Whitacre, I’d tell him to follow Mulally’s lead and continue to slim down GM’s array of brands. The brilliance of Mulally’s Ford is it’s focused and disciplined, both internally and in the public mind. One quick step Whitacre could take is to kill the Buick brand – except in China, where it’s GM’s dominant marque. In the U.S., Buick’s musty image serves only to confuse potential customers. Whitacre should also fold the GMC brand into Chevrolet. GM’s product line-up in the American market should be trimmed to a Mulally-esque duo: Chevrolet for mainstream vehicles (cars and light trucks) and Cadillac (upscale vehicles.) “We have a lot of work to do everywhere, be it purchasing or development or quality,” Whitacre told a press conference this morning. Indeed.

Yesterday’s blog about Microsoft CFO Chris Liddell’s appointment as General Motors’ new CFO promised an update about his pay package. This story, by WSJ colleagues John Stoll and Joann Lublin, has the compensation info plus details of the “arm wrestling” that went on between GM’s board and the U.S.’s “pay czar” Kenneth Feinberg. It also reveals that GM began wooing Liddell before he quit the tech giant and indicates, as I surmised yesterday, that he could be an eventual GM CEO candidate.

Good for GM and its board for tapping former Microsoft CFO Chris Liddell as the auto maker’s long-sought CFO. It’s a sign GM’s Chairman and CEO, Ed Whitacre, is thinking big for GM – and doing so in a smart way. “Big” in the GM world used to be a problem: the company made cars that were too big to suit a fuel-conscious era; its white- and blue-collar workforce was too big; it had way too many factories across the globe (it still does, but they’re being whittled down.) But GM most certainly needs a big-time CFO to unravel its finances, which are complexly linked to those of the U.S. government. Liddell, a 50-something native of New Zealand, has a good reputation with Wall Street analysts and investors, and of course valuable experience with the books of the world’s foremost tech company. It will be interesting to learn what Liddell will get paid; I reckon it’ll be a so-so salary with a substantial stock component tied to GM’s eventual IPO. Is Liddell a potential CEO candidate? Yep, I wager if he does a good job and clicks with Whitacre and the board, he’ll be a contender.

Today, Ed Whitacre, GM’s chairman and CEO since last week, met with reporters – online. Journalists were able to submit emailed questions. He (or someone who said he was Ed Whitacre) replied by email for an hour. “Whitacre” didn’t speak with the automotive press by phone or meet with them in person. Nope. And it’s not clear when he will. Yet – oddly – “Whitacre” himself wrote that “public sentiment” may well be GM’s No. 1 priority. If Job One for GM is making car buyers comfortable with the notion of, er, buying GM cars, then its CEO had better become a living, breathing, thinking, feeling presence in their lives. And how better than to engage with the rip-roaring automotive press corps? Continue reading…