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Akerson Claims Didn’t Know about GM’s Cultural Issues

Former CEO lauds Barra’s handling of crisis.

by on Jul.28, 2014

Former GM Chairman and CEO Dan Akerson said he was unaware of how deep the company's cultural issues ran.

Former General Motors Chairman and CEO Dan Akerson now knows what he didn’t know then: the automaker’s cultural problems ran deeper than he realized when signed on in 2009.

Appointed by the Obama Administration to the automaker’s board and later taking over as CEO in 2010, Akerson told the Detroit News that recent recall crisis shows him that the problems with the company’s culture were worse than he imagined.

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“I think we all — including the new and the old part of the management team — didn’t fully realize how deep some of the problems ran,” said Akerson. “I think we built a good foundation. I think the company needed a lot of change, and I said a lot of that culture wasn’t where we wanted it to be.” (more…)

US Car Market Showing No Signs of Cooling Down

SUVs, crossovers and luxury vehicles drive demand.

by on Jul.28, 2014

Strong demand for products like Altima mean Nissan will deliver a double-digit July sales gain.

It may be an unexpectedly cool summer in much of the country but you wouldn’t know by looking at July’s sales numbers – which have many industry observers expecting the rest of the year to remain hot.

Mark Fields, Ford Motor Co. chief executive officer, noted the general economy appears steady, which should lead to strong sales during the second half of the years. Chuck Stevens, General Motors chief financial officer, also said the second half of the year looks very promising.

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Preliminary data suggest that July new-car sales will be up about 12% over year-earlier numbers, putting the industry on track for its best July since 2006, well before the U.S. economy began to collapse. Overall sales should reach about 1.46 million for the month, according to new forecasts from TrueCar and Kelly Blue Book, and that translates into a seasonally adjusted annual rate, or SAAR, of 16.6 million to 16.7 million, roughly a million ahead of total sales in 2013.

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Chinese Newspaper Lauds GM for Social Responsibility

GM China’s efforts to cut pollution, helping people nets honor.

by on Jul.25, 2014

General Motors China was recognized today as the fourth-best Fortune 500 company in the area of corporate social responsibility at the 2014 Corporate Social Responsibility Annual Conference in Beijing.

For the second consecutive year, Southern Weekly, an influential Chinese newspaper, honored General Motors China as one of the top companies in the area of corporate social responsibility for its civic spirit and sensitivity to the environment.

The Corporate Social Responsibility Annual Conference, which is sponsored by Southern Weekly, helps increase awareness of CSR among companies while honoring their significant achievements.

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Southern Weekly is described by western journalists as one of China’s most outspoken and independent news organizations; however, it is part of provincial newspaper group supervised by Guangdong Provincial Party Committee of China’s ruling Communist Party in Southern China in a province that has been leader in modernizing and expanding the Chinese economy. (more…)

Ford, GM Take Hits Due to Unrest in Russia, South America

Political unrest causing markets to slow, pinching profitability.

by on Jul.25, 2014

Ford isn't moving as many vehicles in Russia due to economic sanctions levied against the country for its involvement in the Ukrainian crisis.

Political and economic uncertainty in Eastern Europe and South America hit the bottom lines of General Motors and Ford during the second quarter, acknowledged executives the Detroit-area automakers.

The second quarter results from Russia and South America were disappointing but neither company showed any signs of walking away from either market.

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Even Russia, which is embroiled in a conflict in the Ukraine that has led to the European Union and the United States impose economic sanctions that have slowed the Russian economy, neither company is prepared to walk away from their Russian partners or the substantial investments they have made in the Russian market. (more…)

GM Now Under Investigation by Attorneys General in 45 States

Maker says number of ignition switch fatalities could rise.

by on Jul.24, 2014

General Motors is not only facing multiple federal investigations, 45 attorneys general are also conducting queries regarding the company's faulty ignition switch.

Already facing investigations by both houses of Congress, as well as a criminal probe by the U.S. Justice Department, General Motors revealed Thursday that it is now facing additional investigations by the attorneys general in 45 states linked to its long delay in ordering a recall of 2.6 million vehicles equipped with defective ignition switches.

Though some probes had previously been announced – GM earlier confirming it had gone before a federal grand jury in New York – the latest revelation suggests the maker’s safety woes could get substantially worse, while it could also be facing significant new fines and legal costs.

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The news was revealed on the same day GM announced that it had earned a meager $200 million during the second quarter of 2014 due to expenses of more than $1 billion to cover the cost of various recall repairs and the establishment of a victims’ compensation fund linked to the ignition switch problem. A day earlier, the troubled maker had submitted documentation to federal regulators indicating the number of people killed or injured due to crashed caused by the switch problem could rise. (more…)

GM Earnings Crushed by Recall Costs

"Nevertheless, we remained profitable," said CEO Barra.

by on Jul.24, 2014

Earnings on new full-size models, such as this 2015 Chevy Tahoe, should boost GM's earnings going forward, analysts forecast.

The fallout from the ignition switch recall and other safety-related problems cut deeply into General Motors’ profitability for the second quarter, the maker reported.

Net income for the March to June period tumbled to just $200 million, or 11 cents per share, compared to a $1.2 billion net for the second quarter of 2013. The GM balance sheet was hammered during the latest period by one-time costs, most of them related to ongoing recalls, as well as for setting up a new victims’ compensation fund. Earnings before the recall-related charges would have been 58 cents a share.

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“The ignition switch put tremendous pressure on our earnings,” GM chief executive officer Mary Barray told analysts and reporters. “But nevertheless we remained profitable.”

Barra also said the sweeping recalls, which so far this year cover 29 million units, have not deterred GM from pushing ahead with its effort to improve its competitive position around the world.

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GM Estimates Victims Fund Will Cost at Least $400 Mil

Forecast comes in lower than many estimates – but impact of safety scandal still severe.

by on Jul.24, 2014

GM CEO Barra shown during her most recent testimony before a Senate subcommittee this month.

General Motors anticipates it will spend at least $400 million to recompense victims of a defective ignition switch so far linked to the death of at least 13 people, though it cautioned that the figure could run as high as $600 million, depending upon how many people qualify for the program.

Those numbers, while significant, come in substantially below widespread reports that had placed the potential cost of the program at as much as $1 billion or more. GM announced details earlier this month of the victims’ compensation program that will be handled by compensation specialist Kenneth Feinberg.

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“There’s no cap on this program and at the end of the day Ken Feinberg will determine how much this program costs,” GM Chief Financial Officer Chuck Stevens told reporters on Thursday morning following the release of the maker’s second-quarter earnings. (more…)

GM Rolls Out Another Six Recalls for 717,000 Vehicles

Maker's recall woes drag on.

by on Jul.23, 2014

The Chevy Camaro is one of the many vehicles targeted by the six new GM recalls.

After a brief reprieve – and hints that the worst of its safety problems had ended – General Motors has announced another six recalls collectively covering more than 700,000 cars, trucks and crossovers.

The latest move brings to more than 26 million the total number of vehicles GM has recalled since the beginning of the year. And when added to the service actions announced by competitors as varied as Ford, BMW and Toyota, the industry overall is fast approaching the 45 million mark, well surpassing the previous record, set in 2004, when 34.1 million vehicles were called back for safety problems.

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GM officials tried to put a positive spin on the latest action, global safety czar Jeff Boyer asserting that this goes to “signify how we’ve enhanced our approach to safety.”

But the seven new recalls also come as something of a setback for a company whose reputation had already taken a hammering during the first half of the year. By late June, GM officials had been dropping strong hints that they had largely addressed all the company’s outstanding safety problems.

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Opel Takes Over GM Europe Operations

New change brings focus on entry-level small cars.

by on Jul.22, 2014

GM folded its European operations in the newly branded Opel Group as part of its plans to return to profitability.

General Motors plans to make its European operations profitable are taking shape as the automaker has rebranded its European unit as the Opel Group and a renewed its focus on small, profitable cars.

The re-branding took effect July 1. The new organization is based in Rüsselsheim, Germany, and will also oversee Chevrolet’s operations in Russia and Cadillac in Europe.

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“Today, we are more than just Opel/Vauxhall,” Karl-Thomas Neumann, CEO of the management board of Opel Group, said in a statement. “With the Opel Group, we align our organizational and legal entity structure in Europe with the business operations. (more…)

GM Issues Stop Sale on Used Cadillac Models

Unusual move reflects slow pace of recall repairs.

by on Jul.21, 2014

The announcement covers Cadillac CTS sedans using key, rather than keyless, ignition systems.

It’s become something of a regular occurrence for manufacturers to issue so-called “stop sales” when they suspect a new model might have a problem that could lead to a recall. Volkswagen recently ordered one for its new Golf and GTI models, and General Motors has issued several this year, including one covering its popular Chevrolet Cruze sedan.

But GM has now issued another, more unusual stop sale, this one telling its dealers to park and sit on some older Cadillac models because of potential ignition switch problems. The order covers Caddy CTS models sold during the 2003 to 2013 model-years, as well as 2004 to 2006 Cadillac SRX sport-utility vehicles. A handful of 2014 Cadillac CTS models were also included.

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The move, however, does not affect vehicles sold by non-GM dealers, whether franchised or independents, so shoppers need be aware that the vehicles have not yet been repaired and could be subject to problems until GM comes up with the appropriate fix.

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