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Posts Tagged ‘General Motors North America’

GM Must Win in Marketplace for IPO to Work

We will make the American people proud of us, Reuss vows.

by on Dec.08, 2009

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“We need to repay the money we borrowed.”

In his first media conference since assuming the post as president of General Motors North America, Mark Reuss said that the priority for 2010 is to payback taxpayers the $50 billion the reorganized company owes.

The goal came out a meeting yesterday Reuss had with Ed Whitacre, the taxpayer-appointed Chairman of the Board, who also assumed the title of CEO last week when Fritz Henderson “resigned.”

“We need to repay the money we borrowed,” said Reuss. “I think everybody in this company wants that desperately.” Reuss went on to say we also want to make “North America proud of GM, its employees, its products and its dealer – and we want to do that fast.”

“The only way to start doing that is with our products and how we sell those products, and how build and develop those products,” Reuss added.

If a successful stock offering, or initial public offering (IPO),  is to be accomplished, GM needs to build momentum with a series of clear wins starting on its balance sheet. In the first quarter since it emerged from bankruptcy, GM Company lost $1.2 billion.

GM can no longer force cars on the market just to buy share. “That’s a bad behavior.”

GM can no longer force cars on the market just to buy share. “That’s a bad behavior.”

In order to stop the flow of red ink, Susan Docherty, the newly appointed vice president, sales, service and marketing, promised to win in the market and eliminate GM as the number one provider of expensive incentives to prop up sales.

By going from eight brands and concentrating on four brands, Docherty promised “to earn our market share, and that’s were the big difference is to holding ourselves accountable.”

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High Cost NUMMI Plant on Chopping Block

Historic UAW contract expires next month, and its only California presence hangs in the balance.

by on Jul.21, 2009

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Toyota has never closed a plant anywhere.

As Toyota Motor Corporation ponders the fate of New United Motors Manufacturing Inc. in Fremont, California in the San Francisco Bay Area, the United Auto Workers is fighting to protect is last foothold in manufacturing on the West Coast.

UAW officials have confirmed that the union has been holding talks with Toyota about NUMMI, after Toyota said the plant is no longer competitive because of its location and labor costs. With the cessation of production of the Pontiac Vibe, and General Motors Company’s announcement that it is abandoning its share of NUMMI, the future of the huge plant, already working at partial capacity, is tenuous at best. Toyota owns 50% of the plant. 

The NUMMI plant, which has more than 5,400 employees, including 4,500 union members, has the capacity to build more than 420,000 cars and trucks annually. 

NUMMI is also the only automotive assembly plant operating in California where the unemployment rate now hovers at more than 11%. The San Francisco congressional delegation includes House Speaker Nancy Pelosi and Democrat George Miller, the chairman of the House Committee on Labor and Education.

No Costs!

No Costs!

“We need to determine whether it can be economically feasible to contract with NUMMI without GM. Under the current business circumstances, Toyota regrettably must also consider taking necessary steps to dissolve the joint venture,” the Japanese automaker said in a statement.

Toyota has never closed a plant anywhere in the world.

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General Motors Abandons NUMMI this August. Toyota faces Tough Choice on Plant’s Future

Latest development comes as GM prepares for a vital bankruptcy sale hearing next week in New York.

by on Jun.29, 2009

Toyota Tacoma Access Cab 2009

"It may take some time before the future of NUMMI is determined." It won't be part of GM, though.

The longer term prospects for the survival of the NUMMI plant in California just diminished as GM has announced it intends to abandon the plant as part of its bankruptcy proceedings.

Troy Clarke, president, GM North America, has just issued the following statement: “As part of its long-term viability plan, General Motors has decided that its ownership stake in the New United Motor Manufacturing Incorporated (NUMMI) joint venture with Toyota will not be a part of the New GM.”

Insiders say that GM made Toyota an offer for a new product, but the Japanese company delayed and stalled. Then, Japanese executives were completely surprised when Fritz Henderson, GM’s CEO, made a decision to stop talking and move forward by stopping all GM production at what was already an under utilized plant.

“While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota. We will consider alternatives by taking into account various factors,” said Mike Goss of Toyota Motor Engineering & Manufacturing North America Incorporated.

The Pontiac Vibe termination was previously announced a little more than one week ago. However at that time both GM and NUMMI spokespersons said that the current intention of both Toyota and GM is to continue NUMMI as a 50/50 venture. That is now officially no longer the case, and it presents Toyota with a problem since NUMMI is the only UAW plant in North America that Toyota is dependent on.

Japanese makers almost universally prefer non-unionized facilities here. And if the GM bankruptcy goes as planned, contracts such as the one governing NUMMI will be invalidated and Toyota will have to decide whether to buy the  facility or shutter it,  and then what does it do with the union?

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If  Toyota buys NUMMI out of bankruptcy, the UAW contract governing the plant would presumably be invalid, allowing it to shed the union, but it is a potential political nightmare of the kind Japanese makers normally try to avoid. The existing workforce could strike and demand that the UAW still represent them.

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A Tiny B-Sized Vehicle Will Be Built In Michigan

GM claims its flexible manufacturing operations and UAW concessions make a competitive, small car built in U.S. possible. All other U.S. B-cars are currently imports.

by on Jun.26, 2009

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The Chevrolet Aveo and G3 Pontiac are currently imported for sale in the U.S., as are all other B-cars.

Troy Clarke, president of General Motors North America confirmed this afternoon that its assembly plant in Orion Township and stamping facility in Pontiac, both in Michigan, will build its future small sub-compact B-car and another larger C-size car, of roughly the size of the Toyota Corolla.  

The volume car in the plant, at about 100,000 units annually will be B-sized, a class that includes the current Chevrolet Aveo and G3 Pontiac, which are currently imported for sale here. Other B-size cars in the U.S. include the Honda Fit and Nissan Versa, on sale for years now, as well as the upcoming Ford Fiesta, which is belatedly due next year.

This is one of the toughest most competitive segments in the world, and one that is dominated by offshore brands that have government protectionist policies, and high fuel and car registration taxes to support them.

GM is part of this global trend  that has clearly hurt the U.S. economy. GM Daewoo Auto & Technology (GM Daewoo) in May sold domestically in Korea 8,155 vehicles and exported 35,823 vehicles. Established in 2002, GM Daewoo now produces vehicles and kits for Chevrolet, Buick, Opel, Vauxhall, Pontiac, Holden and Suzuki that are offered in more than 150 markets on six continents.

Conventional wisdom has long held that American manufacturers cannot make money on small cars, especially if they are built in the U.S., where labor rates and productivity have been non-competitive with foreign, and especially Asian manufacturers. But the numerous concessions made by the union, in recent years, and recent givebacks meant to turn around the domestic industry, have changed the equation.

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Chevrolets’ Avea is currently selling in the U.S. at about 40,000 units annually, a mere footnote in sales charts, and Clarke frankly admitted that GM is banking on rising fuel prices to increase demand and make the car profitable. He also said the attributes of the new — as yet unnamed B-car — would also help sales of the car, which is said to be an upgrade on the current B-size platform that is based on a Korean design from Daewoo. The new B, like its predecessors, will be built globally at “several plants.”

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Pontiac Vibe to Cease Production at NUMMI

The future of the union plant shared with Toyota is unclear.

by on Jun.18, 2009

Toyota Matrix 2009-2010

The longer term prospects for the plant are by no means clear, since NUMMI is the only UAW plant in North America that Toyota is dependent on.

The Pontiac Vibe crossover vehicle will go out of production at the end of this August at the New United Motor Manufacturing Incorporated (NUMMI) facility that is jointly operated by GM and Toyota in Fremont, California.

It is expected that the Toyota Corolla built there, which is closely related to the Vibe and shares the same basic architecture, will continue for the time being.

However, the longer term prospects for the plant are by no means clear, since NUMMI is the only UAW plant in North America that Toyota is dependent on. Japanese makers almost universally prefer non-unionized facilities here. And if the GM bankruptcy goes as planned, contracts such as the one governing NUMMI will be invalidated.

Troy Clarke, President, General Motors North America, said that no replacement for Vibe production has been determined. “GM and Toyota remain in active discussions regarding potential future production at NUMMI,” Clarke said.

The latest cutback is part of GM’s long-term viability plan, which — after the U.S. Treasury Department said it wasn’t viable — was modified to eliminate the Pontiac brand, instead of retaining it as a niche product as originally proposed.

A NUMMI spokesperson confirmed that it will not manufacture the Pontiac Vibe after August 2009, but will continue to produce the Toyota Tacoma and Toyota Corolla.  

“NUMMI will focus on building high quality vehicles and work on lowering its costs while GM and Toyota discuss NUMMI’s future direction. It is our understanding that the current intention of both Toyota and GM is to continue NUMMI as a 50/50 venture,” according to Lance Tomasu from Communications and External Affairs at NUMMI.