Edward Whitacre, Jr., former chairman and CEO of AT&T Inc., has been named chairman of the General Motors. Whitacre will replace current interim chairman Kent Kresa when GM emerges from restructuring later this year.

Whitacre, four other board members, and a slew of new directors will act as the “nucleus” of the New GM, the automaker said Tuesday in a press release. The six other board members are expected to resign as soon as the company’s assets are turned over to the New General Motors.

After filing for bankruptcy protection, General Motors is pushing a new ad campaign promising it will emerge from its financial troubles leaner and stronger.

Is this a good marketing approach? Will it allay consumer fears about buying from a carmaker with an uncertain future?

Advertising experts say GM — and fellow Chapter 11 filer Chrysler — should move past the negative and focus on their brands as they try to get car sales rolling again. Consumers are staunchly loyal to their car brands, they say.

GM says its brands are key to emerging from these tough times. But first it has to tell consumers how it will remake itself and what to expect, Jay Spenchian, GM executive director of corporate advertising strategy, said Tuesday.

“There are lots of questions,” he said. “The best thing we can do is quickly get out there and assure them.”

Here’s a look at what GM is saying to consumers right now and how it’s delivering the message — think social media — followed by some thoughts by marketing experts on whether the company’s approach will likely work.

What GM is doing
Detroit-based GM wasted no time acknowledging its problems to consumers. Shortly after it filed for bankruptcy protection on Monday, GM launched a Web site with a message built into its address: www.gmreinvention.com. The site is forward-looking, showing videos of satisfied consumers — like a former Jaguar owner who never thought he’d own a GM product — and engineers talking about new technologies.

But it doesn’t ignore the company’s current situation. There are links to financial filings under the header “progress,” and articles with headlines like, “What happens to my warranty if GM files for bankruptcy?”

The company has released a 60-second ad on the site that will air nationally on TV starting Wednesday, pledging a “reinvention.”

“Let’s be completely honest, no company wants to go through this,” the ad begins. “But we’re not witnessing the end of the American car. We’re witnessing the rebirth of the American car.”

Among the images in the ad: city skylines, shots of Detroit, a sun rising, plants growing, people raising a house’s frame, athletes commiserating — and later celebrating.

Also on Wednesday, GM will print a letter to customers from chief executive Fritz Henderson in major newspapers in markets including New York, Cleveland, San Francisco and Miami. He tells customers the company cannot afford to lose their business, “or your trust. You have our word.”

Key to the pledged “reinvention” will be an effort to leverage social media, GM’s Spenchian said. The company has links to social media staples like Twitter and Facebook on its new site, which will also host a Web chat later this week with Henderson.

One major advantage of this approach: It’s a lot cheaper than traditional advertising.

DETROIT – A day after Chrysler LLC said it was cutting 800 dealerships, General Motors Corp. on Friday told about 1,100 of its U.S. dealers their franchises will be terminated late next year.

GM said the move targets “underperforming” dealers with small sales volumes and markets in which they are not competitive.

“Dealers are not a problem to GM; they’re an asset to GM. Too many dealers, in actuality, are a problem,” said Mark LaNeve, GM’s vice president of North American sales and marketing, in a conference call with reporters.

The company did not disclose the dealers it plans to eliminate and left it up to dealerships to reveal if their franchises will not be renewed.

The cuts are part of a larger GM plan to drop 2,600 of its 6,200 dealerships as the automaker tries to restructure to become profitable again. The moves likely will cause the loss of thousands of jobs and governments will lose untold dollars in tax revenue as dealerships are forced to close.

Besides the 1,100 dealership cuts, the company will provide updates to about 470 Saturn, Hummer and Saab dealerships on the status of those brands, which it plans to sell.

Friday’s cuts will not be the last. GM said it expects to lose more dealers through attrition. Ultimately, about 90 percent of the remaining dealerships will stay with GM, the company said.

FedEx letters bearing the bad news began arriving Friday morning at GM dealers around the U.S. The letters state that dealers were judged on sales, customer service scores, location, condition of facilities and other criteria.

Both Chrysler and GM say they are cutting the number of dealers because they have too many outlets that are too close to each other, and the competition drives down prices. But as the ranks of dealers thin and competition decreases, that likely will mean higher prices for car and truck buyers.

As GM and Chrysler lost market share to Japanese and other overseas brands, the automakers, as well as Ford Motor Co., ended up with too many dealerships. Many are barely getting by and can’t afford to upgrade their facilities or hire the best personnel to compete with the Japanese, who have far fewer dealerships.

With fewer dealers, consumers won’t see as much competition, said Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight.

Source: AP

ROME – Fiat Group SpA will be on the path to becoming a global automotive powerhouse if Chief Executive Sergio Marchionne has his way.

Marchionne is set to meet Monday in Berlin with German economic and foreign ministers to discuss Fiat’s offer for General Motors Europe’s German unit, Opel.

Fiat confirmed Sunday that it is in talks to buy most of General Motors Corp.’s European operations. It also said it is evaluating the possible spinoff of its auto business to form the core of a new company.

GM has been trying to find investors for its noncore and unprofitable assets to help stave off collapse. Germany is keen to safeguard the future of Adam Opel GmbH, a core part of GM’s European operations, which employs about 25,000 people at four plants in Germany.

Fiat Group Automobiles includes the Fiat, Alfa Romeo and Ferrari brands. In addition, Fiat is in the process of acquiring U.S. automaker Chrysler LLC without putting up any cash.

Marchionne was quoted in the Financial Times on Monday as saying of his company’s plan: “From an engineering and industrial point of view, this is a marriage made in heaven.”

The new auto company, which according to Fiat would have $105 billion in annual revenue, would put the Italian automaker in markets where it has little or no presence, including North America, traditionally the largest market in the world.

“They’re going to be a global powerhouse, I guess. Who would have thought?” asked Erich Merkle, an independent auto industry analyst in Grand Rapids, Mich. “They seem to be on a buying binge right now, looking for cheap and distressed assets like Chrysler and Opel.”

Fiat is not Opel’s only suitor, however. Last week, Canadian car parts maker Magna International Inc. presented German Economy Minister Karl-Theodor zu Guttenberg with what the minister called a “rough concept for a commitment with Opel.”

The German government has said it doesn’t foresee giving direct state aid but could help an Opel investor with loan guarantees.

The Chrysler deal, which must still be approved by a U.S. bankruptcy court, would be in exchange for giving Chrysler access to Fiat’s small-car and engine technology. Chrysler cars and trucks also would be sold by Fiat through its global distribution network.

The deals would make Fiat a big global player, but that might not be the best thing for the Italian automaker, which might be overreaching with the acquisitions, said Merkle.

“This is a lot to take on, quite honestly,” Merkle said. “When you start looking at Chrysler, it’ll make them a very large automaker, but we’ve seen that large isn’t necessarily indicative of success.”

It will take years, Merkle said, for Fiat to gain any synergies by globalizing design, engineering and manufacturing operations with Chrysler and the GM units.

GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab. Saab may not be included in the deal, however. The company is being reorganized under Swedish law and is likely to be separated from the rest of GM’s European operations.

Saab declined to comment on whether Fiat was one of the roughly 10 bidders who have expressed serious interest in the Swedish brand.

Saab spokeswoman Gunilla Gustavs said the sales process is continuing according to plan and that a deal is expected to be signed before the end of June.

“We are now entering a process where we are narrowing down the number of interested bidders. There are around 10 who are more serious, with whom we have held deeper talks and shared more information,” she said.

GM also makes and sells small Chevrolet-badged cars in Europe that are designed in South Korea by the company’s Daewoo unit, and it’s unlikely to sell that because that would be GM’s only remaining foothold in Europe, Merkle said.

General Motors has been trying to find investors for its noncore and unprofitable assets as part of a restructuring in which it has received $15.4 billion in aid from the U.S. government to avert collapse.

Opel has said it needs $4.3 billion to get through the economic crisis. The German government has said it doesn’t foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could help an Opel investor with loan guarantees.

Fiat said that over the next few weeks, Marchionne will be looking “to assess the viability of a merger of the activities of Fiat Group Automobiles (including the interest in Chrysler) and General Motors Europe into a new company.”

“As part of this process, the group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe.”

Courtesy: Associated Press

DETROIT – General Motors Corp. told its dealers Tuesday that it will force 1,000 to 1,200 underperforming locations to close their doors as the automaker tries to thin dealer ranks to make the remaining outlets more profitable.

GM told the dealers about the plan in a video conference, according to a dealer who spoke on condition of anonymity because the video conference was private. It is part of the company’s plan announced Monday to cut more than 2,600 dealers by 2010.

The company expects to lose 500 Hummer and Saturn dealers when those brands close or are sold, and it expects 400 dealers to close voluntarily. Another 500 would be consolidated into other dealerships, according to the dealer.

GM said Monday that it also would eliminate its Pontiac brand, but there are only 27 dealers that sell just Pontiacs, according to the National Automobile Dealers Association. Most Pontiac dealers also sell Buick and GMC vehicles at the same location.

Company spokeswoman Susan Garontakos confirmed the numbers and said GM is in the process of deciding which dealers to keep based on their sales performance, capitalization, potential profitability, size, image and customer satisfaction scores.

After that, she said, the company will go market by market and determine which dealerships are not meeting the terms of their franchise agreements.

“There’s a lot of things that we have to consider, but we’ll have talks with those dealers that show or haven’t demonstrated that they have maintained a good performance,” Garontakos said.

John McEleney, chairman of the NADA, said in a written statement that GM must treat all of its dealers fairly and those that close should be compensated.

“It’s not out of any fault of their own that these dealers are being forced to close their businesses,” McEleney said.

He said many details were unknown about how the dealerships will be closed, but “137,330 dealership employees will lose their jobs, and state and local governments will lose an estimated $1.7 billion in sales tax revenue that would have been used for economic development in communities around the country.”

GM announced Monday it plans to reduce dealerships by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605.

GM is living on $15.4 billion in government loans and faces a June 1 government deadline to complete restructuring moves, win concessions from its unions and cut its debt. If it fails to meet the deadline, it will go into Chapter 11 bankruptcy protection.

GM has decided to scrap its Pontiac brand and either sell or close Hummer, Saturn and Saab. It will focus on four core brands: Chevrolet, Cadillac, GMC and Buick.

Courtesy of the Associated Press.

GM and Ford are offering incentives
to get New York International Auto Show-goers to visit area dealerships.
The $50 comes in the form of a gift card, but requires that the recipient
go to a dealership and test drive a vehicle.

    The marketing of new cars and trucks always starts with getting the
car-buying public's attention and then getting them to consider your
models. The gift card gambit being rolled out at the New York International
Auto Show (NYIAS) appears to be the next tactic to achieve the most basic
goal; getting the customers' attention.

    Detroit automakers have long contended that if the public would take a
close look at their products, rather than just accept the conventional
wisdom of the superiority of foreign makes, they would see that Detroit
makes very competitive automobiles in this country. Paying high-potential
car shoppers at a huge auto show like New York's $50 to travel to a
dealership and actually drive the vehicle may pay some dividends. Time will
tell.

    "Auto shows provide a perfect opportunity for buyers to see, touch and
feel the latest new cars under one roof," said Mark Schienberg, president
of the Greater New York Automobile Dealers Association, the organization
that owns and produces the New York Auto Show.

    "Programs like the $50 gift card offered by GM and Ford help continue
conversations between auto show visitors and new car dealers. This is a
great way to get engage customers and gets them behind the wheel of some
amazing new vehicles," concluded Schienberg.

    Ford gift cards can be spent anywhere. The GM gift card is only good
for purchases on restaurants.com.

    The $50 offer is available to New York International Auto Show
visitors, which runs at the Jacob K. Javits Convention Center in Manhattan,
until Sunday, April 19. For more information, visit http://www.autoshowNY.com.

In the wake of Monday’s deadline set by the Obama administration for Chrysler and GM revitalization, GM CEO Rick Wagoner has been asked to step down by President Obama in an effort to bring in new, younger blood to the struggling Detroit powerhouse. After 31 years of dedicated service, Wagoner ends his career at GM with the company at its lowest point and leaves Bush-like legacy to the company, having run it into major distress. No official announcement has been made but the Associated Press has reported that COO Fritz Henderson would be next in line to take office at the Renaissance Center in Detroit. More information to come.

PRESS RELEASE:

Daimler Trucks North America Previews Latest Technologies on New Innovation Truck at Mid-America Trucking Show

PORTLAND, Ore. – March 19, 2009 – Building upon its extensive history in developing pioneering solutions, Daimler Trucks North America (DTNA) is previewing the latest technologies on a new Innovation Truck at the Mid-America Trucking Show.

The Innovation Truck features advanced technologies directly from DTNA’s development labs. It takes Freightliner Trucks’ most aerodynamic solution – the Cascadia™ – and adds a sampling of cutting-edge advancements that will further enhance fuel economy.

“We’ve created the new Innovation Truck to highlight not only our existing technologies, but to show our customers what they can expect from us in the near future,” said Elmar Boeckenhoff, senior vice president, Engineering and Technology for Daimler Trucks North America. “The Innovation Truck is part of our ongoing effort to shape future transportation by pushing the boundaries in engineering and technology.”

A Legacy of Solutions
Since its inception more than 60 years ago, DTNA has been committed to its core values of innovation, quality and meeting customers’ needs.

From its initial launch of the industry’s first lightweight aluminum cab to the unveiling of the Cascadia in 2007, DTNA has continued to develop products that push the boundaries to enhance the driving experience and impact the bottom line.

“We always combine our extensive global engineering resources with our proven industry knowledge to create smart solutions,” said Boeckenhoff. “We build all of our products with the customer in mind, and the Innovation Truck is no exception.”

Tomorrow’s Technology Today
Aerodynamics
Building on the highly successful Cascadia platform, the Innovation Truck reflects greater refinement in aerodynamics with the addition of rear wheel fairings to smooth the airflow around the rear wheels, under body panels that smooth air flow under the chassis, a roof deflector to direct air over the trailer, and a front air splitter incorporated into the front bumper to pass air around the truck.

The Innovation Truck also replaces the mirrors with side view cameras to further reduce drag. The camera system improves the field of view, eliminates blind spots, and reduces the typical “fish eye” effect.

Together these enhancements improve the airflow over, under, and around the vehicle – resulting in further fuel savings.

“What makes the Innovation Truck so aerodynamic is not just its shape, but the entire package – from bumper to tail lights,” said Boeckenhoff.

Mechatronic Systems
Mechatronics integrates the electronic and mechanical worlds into systems that help to improve vehicle function and driver interaction.

One such system is the RunSmart Predictive Cruise™ system. A world premiere for heavy-duty trucking industry, this system offers significant fuel savings by combining the latest in GPS technology with digital mapping to provide a 3D profile of the road ahead. The truck evaluates the upcoming road profile more than one mile in advance and determines the most fuel efficient vehicle speed.

“The RunSmart Predictive Cruise system showcases our commitment to shape the future of transportation,” said Boeckenhoff. “And with Freightliner, the future starts right now.”

Chassis Systems
Further pushing the aerodynamic envelope, the Innovation Truck integrates a Dual Ride Height system that, at highway speeds, lowers the tractor height, reducing under chassis drag. This system utilizes a proprietary front air suspension in conjunction with Freightliner’s popular rear air suspension.

“Aerodynamic drag reduction is at the foundation of DTNA’s engineering efforts, but decreasing friction can also result in fuel economy savings,” said Boeckenhoff.

The Innovation Truck is configured with a single drive axle that is complemented with a load management system that can transfer weight to the drive axle in low traction situations. This configuration also reduces weight and cost.

Tire pressure monitoring is another important part of keeping a truck as fuel efficient as possible, and the Innovation Truck features the newest option – a wireless SmarTire tire pressure monitoring system integrated with a Lectronix T7000 navigation/infotainment unit. This system not only more accurately reports tire pressure, but it also features an integrated display that simplifies pressure checks.

The Innovation Truck is EPA 2010 emissions compliant using Daimler’s proven BlueTec® emissions technology. The exhaust after-treatment system is packaged under the right-hand step, and a diesel exhaust fluid reservoir is mounted on the left hand forward frame rail. BlueTec provides a solution for the new emission standards while improving fuel economy.

Power Systems
The ParkSmart™ HVAC System featured on the Innovation Truck is now available for the Cascadia. The system provides an integrated system solution for emission-free cooling and highly efficient heating without engine idling. Operating from a second bank of batteries, the ParkSmart system provides 8-10 hours of cooling and up to 34 hours in the heating mode, using a diesel-fired coolant heater.

The advantage of an electrically-driven HVAC system is that shore power extends operating time while eliminating emissions. As showcased on the Innovation Truck, a fuel cell that produces 3-5 kilowatts of power is enough power to operate convenience items during a 34-hour reset period.

“While the concept of the Innovation Truck is forward-thinking, many of these technologies are available right now or will be within this year,” said Boeckenhoff. “We at Daimler Trucks North America are committed to leading the way into the future of trucking with outstanding fuel efficiency and customer-focused, innovative technologies. With us, the future is closer than you may think.”

DETROIT – General Motors Corp.’s chief financial officer says the company will not need the $2 billion loan installment for March that it requested from the U.S. government in February.

CFO Ray Young said Thursday in an interview with The Associated Press that GM told the Obama administration it won’t need the money so soon because its cost cuts are starting to take hold.

GM borrowed $13.4 billion from the government earlier this year. Last month, it said it would need up to an additional $16.6 billion to keep operating, including $2 billion in March and $2.6 billion in April.

DETROIT – General Motors Corp. has scrapped plans to build a new factory to make engines for the Chevrolet Volt, instead choosing the less-costly option of assembling the engines at an existing plant.

The troubled automaker said Tuesday that it would install machinery for the 1.4-liter, four-cylinder engine in unused space inside the existing Flint South Engine Plant, about 50 miles northwest of Detroit.

The move will save the company about $120 million over building a new factory.

“GM will not invest in new floor space at this time due to current capital expenditure constraints and available floor space at existing facilities,” the automaker said in a statement.

The company said it will invest $250 million in the Flint South plant to make the new engine, which also will go into the Chevrolet Cruze compact. Both the Volt and Cruze are due in showrooms next year.

The plug-in Volt, GM’s effort to take the lead in electric vehicles, will have a lithium-ion battery and electric motor that can take the car 40 miles on a single charge. After that, the small internal-combustion engine will take over and power a generator to extend the car’s range.

GM says the Cruze is expected to get about 40 miles per gallon on the highway.

GM announced in September that it would invest $370 million to build a new 522,000-square-foot engine plant just north of the Flint South plant.

The new factory was expected to create 300 new jobs. It was unclear how many new positions would come from building the engine at Flint South instead.

GM is living off government loans as it tries to weather the worst U.S. auto sales downturn in 26 years. The company has received $13.4 billion in loans and is asking for a total of $30 billion. Without federal money, GM said it would have run out of cash and faced bankruptcy in January.

Chrysler LLC also is living on government loans. It has received $4 billion so far and is seeking a total of $9 billion.

Source: Associted Press