Please join Troy Clarke, GM North America President, right here on FastLane this Friday, June 19 at 10 a.m. Eastern Time for a one-hour live chat to address questions about GM. He will take as many questions as he can. Looking forward to hearing from you. – Tom Pyden,VP, GM North America Communications
General Motors President and CEO Fritz Henderson will host a media Webchat right here on Fastlane next Tuesday, June 16, from 2 to 2:45 p.m. EDT to answer reporters’ questions about GM’s reinvention and other activities.
Immediately following the Webchat, Henderson will respond to consumer questions via Twitter from 2:45 – 3:15 p.m., from the @gmblogs account Looking forward to hearing from you. - Christopher Barger, Director Social Media
Last week as we finished our chat session here on FastLane, I promised to follow up on some of the questions we didn’t get to during the chat. There’s been a lot happening this week, so it took a little longer than I’d wanted — but here’s a few answers to start with. We’ll get to some more as much as time allows. Thanks for your patience! — Fritz
GM Culture:
I’d like to dig a little deeper into the question of culture. Of all the things that people believe will hold us back, our “culture” is mentioned most.
GM must work through the chapter 11 process to become leaner, more competitive and profitable once again. That means painful cuts in manufacturing facilities, employees, dealers, brands and models. These are tough but necessary steps that we have to take. They’re also just the start of what we ultimately have to do.
For the past several years, our senior managers have been spending an enormous amount of time working to solve structural problems that have been decades in the making. As difficult and unwanted as chapter 11 is, the good news is that it will allow us to significantly strengthen our balance sheet, giving us the freedom to focus on our customers, on new products and technology, and on new ways of doing business.
We can’t just be a smaller GM; we need to be a different GM, too. When Bob Lutz returned to the company to overhaul our Global Product Development organization, he began asking, “Says Who?” That turned our Product Development team upside-down, and suddenly, Design was once again a huge driver in decision making. Take the Chevy Malibu as an example. The differences in design and materials between the interiors of the previous two generations of Malibus were iterative and incremental. This was the old GM at work. Look inside a 2009 Malibu and you’ll see it is an entirely different effort. Going forward, we need to instill that kind of thinking in everything we do.
I’m stressing four things at GM: most importantly, products and customers need to be the focus of our working lives; two, we need to take individual accountability for results; three, speed is non-negotiable; and four - maybe the toughest area to change at GM - we have to encourage greater risk-taking.
Risk aversion stems in part from 75 years of being the biggest automaker in the world. By playing “not to lose,” we sometimes lost our way. We’re changing that right now. In fact, I feel so strongly that our culture needs attention that I have formed a team to further define, quickly, the behaviors that underlie these four priorities. I’ll let you know how that work evolves, and how and when we might be able to use your input.
Small Car/Cruze:
Chat participants asked several questions about our small-car strategy. If you haven’t heard, next year we’ll roll out an all-new compact that will surprise most customers with its terrific fuel efficiency (approaching 40 mpg highway), appealing interior design and spacious five-passenger cabin. This new car, our Chevrolet Cruze, will feature a small but very powerful 1.4 liter direct-injection turbo-charged gasoline engine in an attractive and affordable package. Now, we recognize that small-car buyers have long held Asian imports to be best-in-class in this segment, and we know that simply fielding a competitive car won’t cut it. That’s why we’re out to beat the competition. In fact, with fewer makes and models, every new GM car needs to be an absolute standout in its class. Early reaction to the exterior and interior design of the Cruze at the Paris Motor Show was very good. Take a look for yourself, and let us know what you think.
Please join General Motors President and CEO Fritz Henderson right here on FastLane today (Thursday, June 4) at 3:00 p.m. Eastern Time for a one-hour live chat to address questions about GM’s court filing and the vision for the New GM. He will take as many questions as he can. Looking forward to hearing from you. - Christopher Barger, Director Social Media
(Editor’s Note: During the chat, Fritz stated that Total Confidence would run through June. This was inaccurate; Total Confidence ended on June 1. Thank you for understanding.)
By Fritz Henderson
President and CEO
Today marks a defining moment in the history of General Motors. Our new fast-track plan to form a leaner, quicker, more customer-focused, more cost-competitive company has the support of the U.S. government. It also incorporates the terms of our recent agreements with the Canadian government, the UAW and CAW unions, and a substantial portion of GM’s unsecured bondholders.
This New GM will be built from the strongest parts of our business - including our best brands and products. It will have a dramatically stronger balance sheet, with far less debt, which will allow us to better invest in our business and our future. It will have fully competitive labor costs and the ability to generate sustained and positive bottom-line performance.
We’re committed to open communications and I am personally putting a high priority on transparency. One way we’ll do this is by launching a series of live web chats on this website. I’ll kick things off later this week for one hour on Thursday, June 4 at 3 p.m. EDT. Following me, a steady stream of GM leaders from throughout the company will host additional chats, about two a week, on whatever topics are of most concern to you.
Today marks the beginning of what will be a New GM dedicated to building on only the very best of our recent progress in fuel efficiency, world-class quality, green technology development and outstanding design. Above all, the New GM will be rededicated to our customers. We don’t do that by working in a bubble. We do it by engaging with you, our customers and critics, our partners and champions, who are interested in our progress. I hope you’ll join us as we begin a new and better era for General Motors.
(To read a Spanish translation of this post, please click here.)
(Note: Below is video of Monday’s press conference with Fritz Henderson. - Will Stewart, blog editor)
By Gary Cowger
Group Vice President, Global Manufacturing and Labor Relations
Friday was a very exciting day for us at GM. We took a significant step toward reinventing GM into a leaner, more focused, greener and cost-competitive automaker.
We announced that morning that we’re planning to build a future small car here in the United States at one of the idled UAW-GM plants. Small cars represent one of the fastest growing segments in both the U.S. and around the world, and we’re the first manufacturer to commit to building these vehicles in the United States. We’ll determine which site a little further down the road, but we’re committed to do this in the U.S. (The global small car market is growing fast enough that there will be plenty of production to go around.)
Beyond making sense from a market demand standpoint, this new capability will also help us meet the new fuel efficiency standards the President just announced. We intend to be the greenest automaker in the world, and along with upcoming vehicles like the Chevy Volt and Chevy Cruze, this new small car will be a significant piece of that effort for us.
We’ll be able to build up to 160,000 small and compact cars a year at the re-tooled plant. It won’t be easy; this is a challenging segment in North America, and bringing a domestically produced small car to market here in a cost-competitive and profitable way will take a special effort from everyone involved. But it’s the right thing to do, and together with our UAW partners we’re going to make it work.
Right now, about 67 percent of the cars and trucks GM sells in the U.S. are built in the U.S. With this announcement, we expect that U.S. production levels will increase beyond 70 percent through 2014. No other manufacturer in the U.S. manufacturing has a percentage that high. We’re proud of that, and this new small car is going to be an important part of our future.
We’ll have more details soon on this announcement, but I wanted to share our excitement with you today about this plan. My question to you: what do you think of small car production here in the US, and how would you generate market demand here? Which facets of a small car would you emphasize if you were going to roll out this kind of car?
By Chet Huber
President, OnStar
It’s a situation that’s difficult to imagine.
You or someone you love is severely injured following a crash, unable to call for help, knowing that the chance for survival can begin to drop as every precious minute ticks by.
At OnStar, we’re thinking about this scenario every day, and working on ways to help our subscribers survive this real-life situation. Back in 2003, we announced Automatic Crash Response – a technology that automatically alerts OnStar following a crash. This technology allows an OnStar Advisor to receive real-time crash data using built-in vehicle sensors and to send first responders to the vehicle’s exact GPS location right away. To date, we’ve responded to and assisted with more than 110,000 Automatic Crash Response incidents and I’m very proud of the impact this service has made in helping to save countless lives.
ACR creates a digital crash signature that includes detailed information such as crash severity, direction of impact and airbag deployment – valuable data for the first responder and emergency medical communities. In 2007, the CDC convened an expert panel of more than 20 of the nation’s leading emergency medical physicians, public safety and vehicle safety experts to review this real-time crash data to determine how it can be used to further improve the emergency transport and treatment of crash victims. You can read more about the report here.
Thanks to everyone who joined us for my first webchat on Monday morning. I enjoyed the questions, and I’d like to do this again in the not-too-distant future. I thought we did pretty well, answering 17 questions in 30 minutes - and then I looked at the question queue and saw that we’d received 179 questions overall! There was no way to get to all of them in 30 minutes (imagine answering a question every 90 seconds and still missing ten for every one you answered!), so I wanted to try and answer some more of them here, a few at a time.
We received several questions from employees about the future of various manufacturing sites, so let’s tackle that subject first. First of all, we are currently in discussions with the United Auto Workers. As I have said on several occasions, everything is on the table - and that has to work both ways, so we want to hear their thoughts and concerns before finalizing our plans around plants and sites that will be closed in our reorganization. We expect to finalize our decisions shortly and will convey those decisions at that time, but we honestly haven’t gotten there yet. But even if we had, I don’t think it would have been appropriate for me to announce those decisions in a webchat. Out of respect for our employees, we want to have those conversations with all of our employees first, face to face whenever possible.
Q. With the declining number of brands, maybe GM can provide the remaining brands a fuller lineup - any comment on flagship sedans for Cadillac or Chevrolet? (Brian Beringer)
Brian, we have big product and technology plans for all our brands. Chevrolet is already loaded with great cars, crossovers and trucks with a lot more coming like the Cruze, Spark and Orlando - and of course, the Volt. And we’ve got some great new Cadillacs, as well as Buicks and GMC cars in trucks in the works. Each week I join our Design chief Ed Welburn, the head of GM Product Development Tom Stephens and a few others to tour GM design and look at future cars and trucks. It’s great to be reminded what this business is all about, and it fills me with optimism about the new GM. I promise you that we have new vehicles that will blow you away.
Q. With so much US taxpayer support, why shouldn’t the government demand you reopen US plants and get US workers working again vs. non-US plants (i.e. Mexico)? (Wes Winn)
Wes, first of all the loan money we’ve received from the US government is in fact going toward our US operations. But the government also recognizes that we are a global company, and that it makes sense to build where we sell - and to use the profits from those local operations to boost production in those regions when market conditions demand it. We don’t only do business in the United States, we don’t only collect revenue in the United States, and for the long-term health of our business we need to continue to make business decisions based on business sense. That said, the percentage of our vehicles sold in the US that are also built in the US will remain virtually the same in the coming years as it is today. Our intention is to keep our US manufacturing capability in line with US market conditions - as the economy improves and the auto market returns to more normal levels, our manufacturing here in the US will keep pace.
Please join General Motors President and CEO Fritz Henderson right here on FastLane on Monday morning (May 11) at 10:15 a.m. (Eastern Time) for a 30 minute live chat. We will take as many questions as we can (though in the time we have, I’m sure we unfortunately won’t be able to get to every question), and we look forward to hearing from you. - Christopher Barger, Director Social Media
By Fritz Henderson
GM President and CEO
Four weeks ago, President Obama announced that GM’s overall restructuring plan did not go far enough to warrant substantial new support from the U.S. government. Tough medicine, given the progress and painful cuts we’d made up to that point. But the message was clear: we simply must go faster and deeper to restructure GM - out of court if possible, in court if necessary - and that’s exactly what we’re doing.
Today, we’re announcing a number of tough but necessary actions to ramp up our U.S. turnaround efforts in four focus areas:
Deeper, faster execution: First, we’re accelerating our U.S. brand and nameplate rationalizations, dealer consolidation, plant closings, and hourly employee and labor-cost reductions. We also expect to implement additional salaried employee and executive reductions.
Sustainable Results: The actions we’re announcing today position us for sustainable success by establishing stronger brands, fewer nameplates, and a world-class dealer network. They will also allow us to significantly increase our North American structural-cost reduction and dramatically reduce our U.S. breakeven volume, enabling the company to be profitable at today’s very low industry-sales volumes.
Healthy Balance Sheet: We’re also announcing today a number of key initiatives to restructure GM’s balance sheet, including a bond exchange aimed at reducing our unsecured debt by at least $24 billion, a goal of exchanging at least half of our VEBA obligations (about $10 billion) to GM common stock, and a request of the U.S. Treasury to convert at least half of GM’s government debt to GM common stock.
Technology: Finally, despite the challenging business conditions, we’re keeping development of our mainstream alternative technology vehicles on track, including the much-anticipated Chevrolet Volt.
The actions we’re announcing today are difficult but necessary, and they affect every single person associated with our company. I want to thank everyone who is working with us to make GM a more customer-focused, leaner, cost-competitive company.
Make no mistake, this is not just about sacrifice, this is about putting GM on a path to win. The reinvented GM will unleash our talented work force to work within a cost structure unrivaled in the industry. Our product line will be offered within sharply focused brands that lead in design, technology, quality and fuel efficiency. Our dealer organization will be resized to compete in today’s world with a volume and profitability to provide a great customer experience. Our world-class supplier lineup will be capable of providing leading-edge innovation and quality. Our balance sheet will give us the stability and flexibility to move quickly on new products, technologies and marketplace initiatives. And at the same time, we’ll listen and respond to the people who matter most - our customers.
Today’s announcements continue the reinvention of GM. I have every confidence that we will achieve our goal.
Editor’s Note: Originally we had live video footage here but the player has since been taken down as the presentation wasn’t archived.
