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Detroit’s Big Three Struggle to Adapt to Rapidly Changing Global Auto Market

Management shake-up at Ford not likely to be the last big announcement from the Motor City this year.

by on May.22, 2017

Ford CEO Fields won't be the last Detroit exec trying to figure out how to address changes coming.

The unexpected ouster of Ford Motor Co. CEO Mark Fields comes as one of the biggest shake-ups Detroit’s Big Three have experienced since they emerged from the Great Recession – and it highlights the challenges they face trying to adapt to a global transformation in what automakers build and how they market those products.

The appointment of Jim Hackett to replace Fields is, however, just the latest in a series of big announcements from Detroit that last week saw Ford announce plans to cut 1,400 salaried workers in North America and Europe, while General Motors said it would stop selling cars in the huge Indian market and sell off operations in South Africa.

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“As the (Detroit) Big Three look out at the landscape, they see dramatic changes coming in the concept of mobility,” says Joe Phillippi, a veteran Wall Street auto analyst and now the lead at AutoTrends Consulting. “They are desperately trying to figure out the future business model and how they will fit in.”

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GM Continues Global Retrenchment; Halting Sales in India, South Africa

Profitability the key goal, not sales, for CEO Barra.

by on May.18, 2017

The Indian automotive market has mushroomed, but GM determined it wouldn't be profitable to remain there.

Long the global automotive leader, General Motors is ramping up its strategy of retrenchment, CEO Mary Barra ordering it to stop selling vehicles in both India and South Africa, as well as the countries in East Africa.

The early Thursday announcement follows earlier moves by Barra, who became the industry’s first female chief executive in January 2014. She pulled out of Russia a year ago and, in March of this year, announced that GM would sell off its long-troubled European Opel/Vauxhall operations to France’s PSA.

We Track the Changes!

“As the industry continues to change, we are transforming our business, establishing GM as a more focused and disciplined company,” said GM Chairman and CEO Mary Barra. “We are committed to deploying capital to higher return initiatives that will enable us to lead in our core business and in the future of personal mobility”

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GM Beats Estimates as Earnings Rise 34%

Pickups, SUVs and CUVs deliver.

by on Apr.28, 2017

Keep on trucking: General Motors' light trucks helped the maker drive a big surge in earnings.

General Motors’ fleet of big pickups and SUVs helped the automaker overcome all obstacles for the first quarter of 2017, earnings rising 34% to handily top Wall Street’s expectations and set a new quarterly record.

With a net income of $2.6 billion, GM was the last of the three Detroit-based automakers to report 1Q earnings and one of two to outperform market forecasts. Only Ford, which was off by 35%, posted a year-over-year decline – though it also benefited from booming demand for high-profit light trucks.

By the Numbers!

“We are executing our plan and it’s delivering results,” Chief Financial Officer Chuck Stevens said during a Friday morning news conference at General Motors headquarters. “This sets us up for another strong year.”

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Barra Brings Home Industry’s Fattest Paycheck

Breaking the glass ceiling paid big reward.

by on Apr.05, 2017

CEO Mary Barra.

The woman who broke Detroit’s glass ceiling is now the best-paid executive – male or female – in the domestic auto industry.

General Motors CEO Mary Barra, who became the maker’s chief executive officer in 2014 and later its chairman, earned $22.6 million last year. That was actually down $6 million compared to hear 2015 compensation, but still $500,000 more than what Ford CEO Mark Fields brought home, according to federal documents filed by the two carmakers.

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As for Sergio Marchionne, the chief executive of Fiat Chrysler Automobiles, he lagged well behind with compensation of “just” $11.99 million for the year. And while numbers haven’t been released for all the major foreign manufacturers, observers say it’s likely Barra will reign supreme across the industry, as U.S. automakers historically have offered significantly higher compensation than overseas competitors.

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GM Paying $1M SEC Fine to Settle Ignition Switch Scandal

Fine resolves matters at the federal level, but the case still drags on.

by on Jan.18, 2017

A replacement for the faulty GM ignition switches.

General Motors is hoping to begin closing the door on its ignition switch scandal with the payment of a $1 million penalty to the U.S. Securities and Exchange Commission.

The SEC was one of the many government agencies to pursue GM after the maker was found to have improperly responded to internal data showing a faulty switch design could cause some of its vehicles to shut off unexpectedly. The defect has been blamed for at least 124 deaths and hundreds of injuries. The securities probe focused not on safety but whether improper accounting kept the company from properly disclosing the potential financial impact of the defect to shareholders.

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The fine is relatively modest when compared to the more than $2 billion the defect has so far cost the largest of the Detroit automakers. That includes a $900 million settlement GM reached with the U.S. Justice Department to close a criminal investigation in September 2015. The automaker also paid a $35 million penalty to the National Highway Safety Administration.

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GM Investing $1b in US Plants, Adding or Saving 7,000 Jobs

Plan in the works before election, maker emphasizes.

by on Jan.17, 2017

GM has already invested $21 bil in its U.S. plants since 2010, adding 6,000 manufacturing jobs.

General Motors has confirmed widespread reports on Tuesday that it would invest another $1 billion in its U.S. manufacturing operations, but significantly increased the number of American jobs it plans to add.

The factory project will result in the creation or retention of 1,500 jobs, while another 450 jobs will be returned to the U.S. as GM transfers back production of axles from a plant in Mexico. In addition, the automaker will add 5,000 more jobs in finance and advanced technology “over the next few years,” it said in a Tuesday morning announcement.

Breaking News!

“As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners,”  said GM Chairman and CEO Mary Barra. “The U.S. is our home market and we are committed to growth that is good for our employees, dealers, and suppliers and supports our continued effort to drive shareholder value.”

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GM Investing $1b in U.S. Plants – Stresses Move Not Driven by Trump

New move to add or retain 1,000 jobs.

by on Jan.17, 2017

CEO Mary Barra said last week that GM will not alter investments to please the new president.

General Motors is expected to announce a $1 billion investment in its U.S. factories on Tuesday, a move that will allow the nation’s largest automaker to create or retain about 1,000 American jobs, according to several sources. Specific details about where the investment will be targeted have not been disclosed yet.

The announcement will come exactly two weeks after President-elect Donald Trump threatened to impose a “big border tax” on GM for importing the hatchback version of its compact Chevrolet Cruze model from Mexico. And it follows other investment U.S. announcements made this month by cross-town rivals Ford Motor Co. and Fiat Chrysler Automobiles.

Setting the Record Straight!

But GM sources stressed that the new investment by the automaker was not driven by the incoming president’s threats – a position echoed by GM General Counsel Craig Glidden in a story by the Wall Street Journal.

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Trump Attacks GM Over Mexican-Made Chevy Cruze

Detroit maker fires back at latest attack on auto imports.

by on Jan.03, 2017

The President-Elect shifts his focus to GM.

After spending much of his initial campaign taking shots at Ford Motor Co. for its plan to shift small car production to Mexico, President-Elect Donald Trump is now taking a poke at General Motors for importing the Chevrolet Cruze from a plant south of the border.

“Make in U.S.A. or pay big border tax,” the businessman-turned politician declared in a tweet, slamming GM for “sending Mexican-made model of Chevy Cruze to U.S. car dealers-tax free across border.” The president-elect has proposed dismantling or revising the North American Free Trade Agreement and hitting Mexican imports with as much as a 35% tariff – though he has notably made no public indication of plans to return production of his own clothing lines – some made in Mexico – back to the U.S.

Breaking News!

For its part, General Motors quickly responded to the Trump attack by noting that all of the Chevrolet Cruze sedans sold on the American market are produced in the U.S. A small number of Cruze hatchbacks recently began being imported from Mexico.

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Slowing Sales Fail to Damper GM as Earnings Set Record

Q3 numbers suggest focus on retail market is paying off.

by on Oct.25, 2016

GM CEO Mary Barra: "Determin(ed) to deliver earnings and enhance shareholder value."

(This story has been updated to reflect comments made by GM officials during an earnings conference call.)

General Motors earnings more than doubled during the third quarter to a record $2.77 billion, or $1.76 a share, despite slowing demand in the U.S. market.

But the maker says it benefited from a shift in focus away from low-profit fleet sales to the more lucrative retail market, as well as a rebound in the Chinese automotive market.

Earnings News!

The Detroit maker handily outperformed Wall Street’s expectations. Excluding a one-time gain, GM earned $1.72 a share for the quarter compared with a consensus forecast of $1.46. In a statement, the automaker credited “robust retail sales in the United States, strong performance in China, growth in wholesale volume and effective cost performance.”

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GM Q2 Earnings More Than Double Even as Sales Slip

Globe’s 3rd-largest automaker ups full-year forecast.

by on Jul.21, 2016

GM has been rushing out an assortment of new models, including a remake of the Chevy Malibu.

General Motors saw its second-quarter profit more than double, reaching a record $2.87 billion, the maker announced on Thursday, handily beating Wall Street expectations.

The surge came despite the fact that GM has seen sales slip in recent months – even while the overall U.S. car market continues to grow. The results appear to validate the strategy of trimming back on lower-profit rental and other fleet sales in favor of growing the retail side of the sales ledger.

Breaking News!

“This was an outstanding quarter for GM,” said Chairman and CEO Mary Barra. “Our results were generated by strong retail sales in the U.S., record sales in China and a continued emphasis on improving the performance of our operations worldwide. We’ll continue to focus on driving profitable growth and leveraging our technical expertise to lead in the future of personal mobility.”

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