The demise of Norwegian electric car pioneer Think Global will drain some of the energy from advocates of electric vehicles.
They should recharge by shifting their view from blueprints of cars and studying instead more comprehensive plans that aim to combine vehicle, infrastructure and services. Read more
General Motors’ plan to give “a higher profile” to its Chevrolet brand makes lots of sense, given that Chevrolet is the equivalent of the Toyota brand – a volume marque around which other brands are arrayed. But why stop there?
It is increasingly odd for GM, which has been attacking its brand proliferation in the US, to have different brands around the world for its volume cars – Vauxhall in the UK, Opel in Germany and Holden in Australia.
The company has already taken the logical step of losing the GM Daewoo name in South Korea and adopting Chevrolet instead. Why not bite the bullet and do that same in other countries? Read more
It is tempting to dismiss the Renault scandal, which has humiliated Carlos Ghosn, the company’s chief executive, after he admitted this week that it had falsely accused three former executives of espionage, as a corporate Dreyfus affair.
Renault’s grovelling apology to the three executives it wrongly accused of industrial espionage is an extraordinary episode that indicates a serious lack of judgment by its senior managers. Read more
Contrast the reaction to rewards paid to UK bank executives – £28m in share bonuses and long-term incentives to nine Royal Bank of Scotland officers, for instance – with the response to stock awards worth almost $100m for Ford Motor’s Alan Mulally and Bill Ford.
Both pay-outs are being made to executives who took on big turnround jobs – and had no responsibility for what went before. Both contain deferred elements. Both, let’s face it, are huge in absolute terms, however you cut them. But whereas many people seem to believe Mulally, Ford’s CEO, deserves his pay-out, his RBS counterpart Stephen Hester and colleagues have attracted mainly brickbats for their rewards. Read more
Sergio Marchionne of Fiat and Chrysler has got himself into a fine mess with one appearance in San Francisco on Friday in which he managed to scandalise two governments simultaneously.
One of his sallies was foolish as well as offensive. Describing the finance offered by the US and Canadian governments to keep Chrysler afloat with taxpayer money as “shyster” loans was an absurd comment (for which Mr Marchionne has apologised).
To state the obvious, Chrysler would have collapsed in 2009 without those loans and no-one else apart from the US government was willing to make them. I still question whether it was a good idea at all.
The fact that it charged interest on behalf of taxpayers was the least it could do, and Mr Marchionne, who as I previously noted enjoys being the centre of attention, was silly to bite the hands that fed him. Read more
The General Motors initial public offering looks as if it will be successful – and will be priced well in excess of the range first set by the underwriters. That will let the US government sell down its 61 per cent stake substantially and perhaps exit entirely next year.
So who deserves the praise for this achievement? GM’s new management (even with the revolving door at the top), the government for its act of tough love in financing GM’s purge in Chapter 11 bankruptcy, or former GM executives led by Rick Wagoner?
My money is on the government and its auto industry taskforce led by Steve Rattner for not listening to Mr Wagoner’s dire warnings about Chapter 11 and for realising that GM could only be properly restructured in bankruptcy. Read more
I admit to having been sceptical about Alan Mulally‘s chances of turning around the ingrained culture and under-performance of Ford when he was recruited from Boeing as chief executive in 2006. But Mr Mulally has been proving me wrong.
Ford’s third quarter results put the company on track to be free of net debt by the end of the year. More importantly, Mr Mulally’s internal restructuring appears to have placed it on a long-term growth path, rather than being a short-term fix.
A lot of conventional wisdom about the industry have been proved wrong recently, including the idea that it would be a disaster for any of the Big Three to go into Chapter 11 bankruptcy. Bankruptcy was the best thing that could have happened to GM. Read more
Steve Rattner, the Obama administration’s former “car czar” who has a book out about the bailing out of General Motors and Chrysler, gives an interesting summary of his first impressions of Detroit to Peter Lattman in the New York Times.
So, for example, I found that the culture in Detroit, and at General Motors in particular, was even more bureaucratic and more stultified than what I would have guessed before I got there. The financial controls were far weaker than anything I would’ve imagined before I got there. On the positive side, GM had better projects than I would’ve imagined and it had also brought its manufacturing efficiency to a much higher level than I would’ve predicted.
That can be summarised as: GM was a terrible company making surprisingly good cars. Or: Detroit itself was in a bad way, whereas its manufacturing plants were healthy. Read more
The speed at which global auto makers, particularly luxury car companies, are switching their focus of interest from the US to China continues to amaze.
BMW’s results on Tuesday, showing that its second quarter sales in China doubled from 22, 700 to 45,200, followed a declaration on Monday by Volvo’s new Chinese chairman that it will compete more directly with BMW, Mercedes and Audi.
China’s luxury car market is not only growing very rapidly but also has better margins than other markets, making it very attractive to global car companies. Read more
If you were investing in an initial public offering, would you not want the company’s chairman, chief executive and “product architect” – the most important individual to the enterprise – at least to work full-time?
I ask this because Elon Musk, the chairman and chief executive of Tesla Motors, the electric car maker that held its Nasdaq IPO successfully on Tuesday, does not. Read more
Before the Abacus synthetic CDO that led to Goldman Sachs being accused of securities fraud came the CDO deals associated with Magnetar, the Illinois-based hedge fund.
Now Magnetar has come out fighting against accusations from ProPublica, the online news group, that it helped to stoke the US housing bubble in order to short its CDOs with astronomy titles such as Libra and Norma. Read more
The number of German companies embroiled in serious bribery allegations continues to grow: we have had Volkswagen, then Siemens, MAN and now Daimler.
But the preponderance of heavyweight industrial names leads to one to wonder about why so many German companies have recently become caught up in corruption scandals. Put simply: are German businesses more corrupt than others? Read more
An alliance of two losers?
That is too harsh a pronouncement on the news that Daimler and Renault are talking about a possible cross-shareholding. Nevertheless it does seem striking that the two European carmakers that probably performed worst in the recent crisis are talking about propping each other up. Read more
Another putative auto alliance falls onto the scrap heap. Following on the heels of GM’s U-turn on the planned sale of its European unit Opel and the scotched disposal of Hummer to the Chinese, Peugeot of France and Japan’s Mitsubishi Motors (MMC) have called time on their planned tie-up.
Spare the tears. Auto alliances have a mixed track record; there have even been rumblings in the initially highly successful Franco-Japanese pairing of Renault and Nissan. It was never clear where the strategic advantages lay for Peugeot and Mitsubishi – other than the fact that the Japanese carmaker could use the cash. Yet the more likely share swap would not have brought even that benefit. Read more
Toyota’s woes are seen as a chance for other Asian carmakers such as Honda and Hyundai and maybe even the US Big Three.
But the biggest beneficiary in the long run might be European: Volkswagen. Read more
Whoever is advising Akio Toyoda, Toyota chief executive, on PR has not exactly covered themselves in glory. Toyota has widely been seen to be slow in responding to the unfolding safety disaster. That view is only going to be compounded by news that Mr Toyoda does not plan to appear before US congressional committees investigating the defects that have led the troubled Japanese automakers to recall of millions of vehicles. Mr Toyoda said Yoshimi Inaba, head of Toyota’s US business, would represent the company at the hearings.
This can only end badly for Toyota. It gives a bad impression that Toyota’s top management are ducking the issue or not taking it seriously enough or trying to hide something. Worse, it is an untenable position. If Mr Toyoda seeks to dodge the hearings, such will be the public backlash that he will inevitably be forced to backtrack and go to the hearings. If Toyota is serious about rebuilding its franchise in the US, Mr Toyoda has no alternative. He must go to Washington.
Louise Lucas blogs for the Financial Times on the impact of Toyota’s woes on its rivals, such as GM, Ford and VW. Read more
A problem that is handled well can increase a customer’s loyalty. This is something Toyota should bear in mind as it deals with the potentially devastating recall of more than 8m cars for safety defects. Just look at last week’s healthy results from Mattel, which has recovered admirably from the “toxic toy” scandal of 2007 that forced it to pulp more than 20m products that were covered in lead paint or had bits falling off them.
What Mattel understood, from the get-go, was the need to take full responsibility and to apologise and explain, and then to keep on apologising and explaining…until consumers were sick of hearing it. Unfortunately, this goes against a deeply-held corporate instinct – applicable globally but possibly even more pronounced in Japan – to downplay problems, shift responsibility and reveal only what is absolutely necessary. Just remember how Ford and Firestone blamed each other for the exploding tires on the Ford Explorer a decade ago, a scandal that ultimately cost Ford’s then-CEO Jac Nasser his job. Read more
Ed Whitacre has solved the problem I noted last month of finding a chief executive who could work under him at General Motors – he has adopted the Dick Cheney tactic of appointing himself.
This solves one problem but it leaves me with an uneasy feeling about the way that Mr Whitacre, the former chairman and chief executive of AT&T who was appointed by the Obama administration to oversee its own investment in the restructured GM, has interpreted his mandate. Read more