General Motors: Sales, Marketing, and Financial News
Drifting
Joined: May 2005
Posts: 3,339
Likes: 8
From: 905
Originally Posted by GreenMonster
Just like the gov. did with Chrysler in the 80's...
It's probably cheaper to bail them out then it is to let them go belly up...
It's probably cheaper to bail them out then it is to let them go belly up...
we'll see what happens...
Originally Posted by zeroday
it's called survival of the fittest. it's called capitalism. the weak can and will be killed off and eaten. our economy will survive; it will just change.
But you need to remember economics. If GM goes down, it will have a devastating effect on our economy. GM has extensive operations throughout the world employing hundreds of thousands of people. Sure, if a private grocery store around the corner was driven out by competition, it wouldn't have any noticeable impact on the economy. But when we're talking about a large scale corporation that has its hand in numerous areas of the economy, it'll hit hard.
Then there's the suppliers... the steel industry, food services, health care services, machinery, transportation, freight service, etc, etc. It will affect virtually all sectors of our economy directly or indirectly. For instance, businesses whose clientelle mostly consisted of GM employees would see a dramatic decrease in business once the GM employees are laid off and no longer spending money. This will single-handedly destroy a town's economy overnight. Already they are predicting/talking about the impact of GM's bad conditions on the Metro Detroit area, mainly Bloomfield Hills (my hometown) where most of the automotive industry people live.
Using your example... the ones who were depending on GM for survival (its suppliers, partners, etc.) will also go down when GM is killed off and eaten. Yeah, some of them can route their resources onto other operations, but for the majority of the network, all they do is build and supply parts to GM. And they can't just move into another market sector overnight. That will require restructuring and reorganizing. Most of these middle to lower level suppliers aren't capable doing that on a short notice, and they will go down. Especially because the automotive industry is saturated and they can't just start supplying Ford instead of GM the next day.
Even financial problems overseas affect our economy. Remember the IMF situation in Asia back in 1999? That destroyed the Asian economy and eventually hit the U.S., too, along with the rest of the world. Imagine what would happen if the largest corporation with its largest market and labor force based in the U.S. went down... there's no telling what could happen.
Of course, I'm talking about a major shut-down of operations. Like I said earlier in the thread, GM is not planning on filing for bankcruptcy as Rick Wagoner announced. And even if they did, the government will bail them out. They have to.
Drifting
Joined: May 2005
Posts: 3,339
Likes: 8
From: 905
Originally Posted by Michael Wan
I personally have a 96 Saturn in the family and it has been an average car. Its build quality is far from perfect, and interior quality is so-so, but it looked better, handled better, and was more powerful and less expensive than other cars at the time.
After 10 years and 86,000 miles, the car has been reasonably reliable by my standards. The only repairs that were made to the vehicle aside from scheduled maintenance were a broken alternator (around 70,000 miles), and I can see a transmission pan gasket needing to be replaced. The oil does burn about a quart of oil every 2000 miles, but it doesn't bother me much at all like it bothers some people, the engine is known to burn oil and did so from day 1.
Other than that, the car has never broken down or left me/anyone stranded. If the price was right, I certainly wouldn't hesistate to buy another GM product over a Honda/Acura product...I personally think that the Corollas/Camrys are very overpriced for their outdated engines and platforms.
GM has made many improvements over the years yet people fail to see them. The Oil Life Monitor was one example, and it is probably the best in the industry right now, better than the Acura system IMO. They were probably the pioneers in developing a longer-life ATF, beginning with the 100,000 mile service interval for Dexron III-G back in the 90s...and now they recently launched the new Dexron VI fluid which will be replacing the Dexron III-H over the course of 2006.
In addition, GM actually puts out some very good engines. The 2.2L, Ecotec 4-cyl gets about 35MPG on the highway for a small car, which is only average, but it still gets about 33MPG on the mid-sized Malibu and Pontiac G6, which is very competitve. Not to mention the top-mounted, cartridge oil filter for easy servicing, and the timing chain, unlike the timing belt in Honda V6 engines. It also lacks an EGR valve, which may simplify some things.
Its funny how people automatically assume that new GMs are "Bad" and Honda/Acuras/Toyotas/Nissans/etc are automatically "Good." Hondas are far from trouble-free; the transmissions in the 2G TL were a PITA, and the build quality of some of the cars aren't quite up to par. The Toyotas had problems with sludgemonster 2.2L/3.0L engines, and there engines are STILL very hard on oil to this day. Thus, Japanese vehicles aren't exactly trouble-free...
I don't disagree that GMs are lacking in terms of build quality to some degree, but they often cost $2000-$2500 less than the average Japanese car, at least in the small car category. I personally wouldn't mind putting up with a lower quality interior and a noisier engine if the engine was easier to service and I was able to save $2000 and possibly have lower insurance costs.
Just my :twocents:
After 10 years and 86,000 miles, the car has been reasonably reliable by my standards. The only repairs that were made to the vehicle aside from scheduled maintenance were a broken alternator (around 70,000 miles), and I can see a transmission pan gasket needing to be replaced. The oil does burn about a quart of oil every 2000 miles, but it doesn't bother me much at all like it bothers some people, the engine is known to burn oil and did so from day 1.
Other than that, the car has never broken down or left me/anyone stranded. If the price was right, I certainly wouldn't hesistate to buy another GM product over a Honda/Acura product...I personally think that the Corollas/Camrys are very overpriced for their outdated engines and platforms.
GM has made many improvements over the years yet people fail to see them. The Oil Life Monitor was one example, and it is probably the best in the industry right now, better than the Acura system IMO. They were probably the pioneers in developing a longer-life ATF, beginning with the 100,000 mile service interval for Dexron III-G back in the 90s...and now they recently launched the new Dexron VI fluid which will be replacing the Dexron III-H over the course of 2006.
In addition, GM actually puts out some very good engines. The 2.2L, Ecotec 4-cyl gets about 35MPG on the highway for a small car, which is only average, but it still gets about 33MPG on the mid-sized Malibu and Pontiac G6, which is very competitve. Not to mention the top-mounted, cartridge oil filter for easy servicing, and the timing chain, unlike the timing belt in Honda V6 engines. It also lacks an EGR valve, which may simplify some things.
Its funny how people automatically assume that new GMs are "Bad" and Honda/Acuras/Toyotas/Nissans/etc are automatically "Good." Hondas are far from trouble-free; the transmissions in the 2G TL were a PITA, and the build quality of some of the cars aren't quite up to par. The Toyotas had problems with sludgemonster 2.2L/3.0L engines, and there engines are STILL very hard on oil to this day. Thus, Japanese vehicles aren't exactly trouble-free...
I don't disagree that GMs are lacking in terms of build quality to some degree, but they often cost $2000-$2500 less than the average Japanese car, at least in the small car category. I personally wouldn't mind putting up with a lower quality interior and a noisier engine if the engine was easier to service and I was able to save $2000 and possibly have lower insurance costs.
Just my :twocents:
Drifting
Joined: May 2005
Posts: 3,339
Likes: 8
From: 905
Originally Posted by Pure Adrenaline
Actually, the main cause of the problem is the rising legacy costs, coupled with high oil prices which had a huge impact on their major product line of trucks and SUVs. Simply and bluntly put, they are just experiencing a bad market currently.
These dealership problems you mentioned are common throughout the entire automotive industry. And GM also set record sales figures in the third quarter, so obviously selling isn't the problem.
These dealership problems you mentioned are common throughout the entire automotive industry. And GM also set record sales figures in the third quarter, so obviously selling isn't the problem.
but, it would be nice to see how much of their total sales were coming from fleet sales. i do think that they have huge contracts with the car rental agencies...
very difficult to get that kind of information, i'd assume. interesting nonetheless...
of course, i'm sure there are more categories to look at within their total sales numbers...
Suzuka Master
Joined: Oct 2003
Posts: 7,516
Likes: 1
From: Lakeway, TX
If GM were to go bankrupt it doesn't necessarily mean they would cease to operate. A trustee would be appointed by a bankruptcy court who would decide whether to liquidate or continue to operate. The most likely outcome would be that shareholders would get nothing, and GM would no longer be hobbled by exorbitant legacy costs owed to its union and retirees. The bondholders might make out okay though and the people who work for GM would hold onto most of their jobs, albeit at lower pay and with less job security.
GM isn't going to go bankrupt anytime soon though.
GM isn't going to go bankrupt anytime soon though.
Burning Brakes
Joined: Aug 2005
Posts: 995
Likes: 0
From: Saskatchewan, Canada
Originally Posted by Dan
I get it, Michigan! Never in 40 years of driving have I had a car company f--k me and others a bad as GM did with their diesels. What they did to customers makes the Acura/Honda transmission thing seem like a non issue. GM is only getting what is coming to them. Not going to bother my stock portfolio one bit if they bite the big one. Like I said in the original post; I feel sorry for the little guy.
i'm with ya buddy...first new car i ever had was an olds...had it's first problem 3 days after i brought it home...fast forward 3 years, 72,000 KM , 38 (count 'em) work orders later...thing would just shut off while i was driving and not start for 2 hours....(no, this wasn't an overheat or alternator issue, the 6 dealerships i took it to never found the problem..)in addition to about 8 other issues i can think of off the top of my head.
basically everyone was an asshole to me about (this includes the consumer hotline who told me "it wasn't their problem" even though i had bumper to bumper warranty to 100,000 KM..and no, i was perfectly polite and didn't scream or rant or anything...)
the guy that sold it to me was alright...i guess i'd rate him about a B- in terms of service...but that's probably only cause my dad has bought like 15 vehicles from him..
yes, i know, everyone gets a lemon sometimes....but the way GM handled it.....they lost a customer for life...
I feel the need...
Joined: May 2004
Posts: 14,957
Likes: 515
From: Motown
GM Bankruptcy Not Far-Fetched as Sales Drop, S&P Says (Update2)
2005-12-13 07:56 (New York)
(Adds German shares in ninth paragraph.)
By Jeff Green
Dec. 13 (Bloomberg) -- General Motors Corp.'s plan to cut $7
billion in costs next year may not keep the company from
bankruptcy unless it revives its U.S. auto sales, Standard &
Poor's said.
GM Chief Executive Officer Rick Wagoner's plan to eliminate
30,000 jobs after $3.8 billion in losses this year wasn't enough
to overcome the Detroit-based automaker's dwindling U.S. market
share, S&P analyst Scott Sprinzen said yesterday. S&P lowered GM
to five steps below investment grade as the company's U.S. auto
sales fell at least 7 percent in each of the past four months.
``It was a natural outcome of the contraction of their
business, which is something that's ongoing,'' Sprinzen said on a
conference call. ``That needs to end at some point.'' He said
bankruptcy is no longer as ``far-fetched'' an outcome as it was
in the past.
Wagoner is betting on new products, including redesigned
versions of the Chevrolet Tahoe and other large sport-utility
vehicles, to end U.S. market share losses to rivals such as
Toyota Motor Corp. GM cars and trucks accounted for 26 percent of
U.S. auto sales so far this year, down from 29.4 percent in 1998
when Wagoner became the company's president. GM commanded 51
percent of U.S. sales in 1962.
The 97-year-old automaker was lowered to high-risk, high-
yield junk in May for the first time, and S&P has lowered it on
three more occasions since. Yesterday the ratings company cut GM
to B from BB-.
``There are some single-B companies that have stable and
growing businesses,'' said Michael Difley, a high-yield debt
manager for American Century Investment Management who oversees
$175 million in assets. ``GM does not. The market has not seen
stabilization or a turnaround. GM is burning cash.''
Credit Default Swaps
Credit default swaps on GM rose $500,000 to $2.2 million
upfront plus another $500,000 a year, according to prices from
Deutsche Bank AG. GM's debt insurance costs reached a record of
$2.6 million upfront in November. That's to insure $10 million of
debt. Meanwhile, the annual cost of insuring $10 million of its
finance unit's debt rose $20,000 to $450,000 today.
As with insurance, the buyer of a credit-default swap is
charged an annual fee, and receives the full amount protected if
the borrower fails to pay its debt. Swap prices typically rise
when creditworthiness worsens and fall when it improves.
GM shares fell the equivalent of 53 cents, or 2.3 percent,
to $22.52 at 1:34 p.m. in Frankfurt. The stock rose 13 cents to
$23.05 yesterday in New York Stock Exchange composite trading.
The company's 8.375 percent note maturing in 2033 dropped
about 2 cents on the dollar to 71 cents yesterday, yielding 12
percent, according to Trace, the bond-price reporting service of
the NASD.
Plans
Since the beginning of October, Wagoner has won agreements
from the United Auto Workers to cut $1 billion in annual union
health-care costs. He detailed his plan to close 12 facilities
and shrink GM's North American annual production capacity to 4.2
million cars and trucks by the end of 2008, 2 million less than
in 2002. Wagoner is also seeking a buyer for a majority of
General Motors Acceptance Corp., an auto-loan business that
brings in more profit than any other GM unit.
``This is the latest round of a number of similar waves of
restructuring, and certainly things would be much, much worse at
this point for the company if they hadn't undertaken that
downsizing,'' Sprinzen said. ``But that's nothing that they
entered into so willingly.''
Losing Money
GM's losses from North American operations -- not counting
impairment and restructuring charges -- may approach a
``massive'' $5 billion this year, S&P said yesterday. The $6.6
billion in cash used up so far this year by GM's North American
auto operations is contributing to a ``substantial'' additional
use of cash, S&P said yesterday.
Wagoner has repeatedly said GM has no plans to file for
bankruptcy. Fears of a filing sent the stock to an 18-year low on
Nov. 17. GM shares have fallen 42 percent this year, the most of
any company on the Dow Jones Industrial Average and the biggest
one-year drop since at least 1981.
``GM has an aggressive strategy to turn around our North
American business and we've been making progress in some
important areas,'' said GM spokeswoman Toni Simonetti. She said
GM stands by Wagoner's statement last month that there is ``no
plan, strategy or intention for GM to file bankruptcy.''
Cash
GM, which had cash and marketable securities of $19.2
billion at the end of the third quarter, has about $285 billion
in consolidated debt, S&P said. S&P maintains a negative outlook
on the automotive operations, meaning it's more inclined to
reduce the rating. It left the ratings for GMAC and its
residential-mortgage unit unchanged.
``In the past we might have felt at different points that
the concerns about bankruptcy risks were way overplayed,''
Sprinzen said on the conference call yesterday. ``But at this
juncture it's our conclusion that this isn't a far-fetched
possibility if the kind of deterioration in results that we've
seen over the last few quarters should continue.''
GM hasn't had a profit forecast since April because it says
it can't be certain about the outlook for North America. GM's
board last week approved a plan to bring its European chief, 47-
year-old Fritz Henderson, to the U.S. to replace Chief Financial
Officer John Devine.
Devine, 61, will extend an expiring five-year contract as
much as a year to assist Wagoner in stemming losses. The company
has lost money for four straight quarters, its longest
unprofitable streak since 1992.
The GM ratings cut means the automaker is considered the
same credit risk as Uruguay, Jamaica, and the Dominican Republic.
``We are not optimistic in the long run, especially if GM
fails to deal with the extravagant labor and health-care package
at the UAW and the heavy retiree burden,'' said Pete Hastings,
vice president of corporate fixed income at Morgan Keegan Inc. in
Memphis, Tennessee. ``I would not be surprised to see more
cuts.''
source: bloomberg.com
2005-12-13 07:56 (New York)
(Adds German shares in ninth paragraph.)
By Jeff Green
Dec. 13 (Bloomberg) -- General Motors Corp.'s plan to cut $7
billion in costs next year may not keep the company from
bankruptcy unless it revives its U.S. auto sales, Standard &
Poor's said.
GM Chief Executive Officer Rick Wagoner's plan to eliminate
30,000 jobs after $3.8 billion in losses this year wasn't enough
to overcome the Detroit-based automaker's dwindling U.S. market
share, S&P analyst Scott Sprinzen said yesterday. S&P lowered GM
to five steps below investment grade as the company's U.S. auto
sales fell at least 7 percent in each of the past four months.
``It was a natural outcome of the contraction of their
business, which is something that's ongoing,'' Sprinzen said on a
conference call. ``That needs to end at some point.'' He said
bankruptcy is no longer as ``far-fetched'' an outcome as it was
in the past.
Wagoner is betting on new products, including redesigned
versions of the Chevrolet Tahoe and other large sport-utility
vehicles, to end U.S. market share losses to rivals such as
Toyota Motor Corp. GM cars and trucks accounted for 26 percent of
U.S. auto sales so far this year, down from 29.4 percent in 1998
when Wagoner became the company's president. GM commanded 51
percent of U.S. sales in 1962.
The 97-year-old automaker was lowered to high-risk, high-
yield junk in May for the first time, and S&P has lowered it on
three more occasions since. Yesterday the ratings company cut GM
to B from BB-.
``There are some single-B companies that have stable and
growing businesses,'' said Michael Difley, a high-yield debt
manager for American Century Investment Management who oversees
$175 million in assets. ``GM does not. The market has not seen
stabilization or a turnaround. GM is burning cash.''
Credit Default Swaps
Credit default swaps on GM rose $500,000 to $2.2 million
upfront plus another $500,000 a year, according to prices from
Deutsche Bank AG. GM's debt insurance costs reached a record of
$2.6 million upfront in November. That's to insure $10 million of
debt. Meanwhile, the annual cost of insuring $10 million of its
finance unit's debt rose $20,000 to $450,000 today.
As with insurance, the buyer of a credit-default swap is
charged an annual fee, and receives the full amount protected if
the borrower fails to pay its debt. Swap prices typically rise
when creditworthiness worsens and fall when it improves.
GM shares fell the equivalent of 53 cents, or 2.3 percent,
to $22.52 at 1:34 p.m. in Frankfurt. The stock rose 13 cents to
$23.05 yesterday in New York Stock Exchange composite trading.
The company's 8.375 percent note maturing in 2033 dropped
about 2 cents on the dollar to 71 cents yesterday, yielding 12
percent, according to Trace, the bond-price reporting service of
the NASD.
Plans
Since the beginning of October, Wagoner has won agreements
from the United Auto Workers to cut $1 billion in annual union
health-care costs. He detailed his plan to close 12 facilities
and shrink GM's North American annual production capacity to 4.2
million cars and trucks by the end of 2008, 2 million less than
in 2002. Wagoner is also seeking a buyer for a majority of
General Motors Acceptance Corp., an auto-loan business that
brings in more profit than any other GM unit.
``This is the latest round of a number of similar waves of
restructuring, and certainly things would be much, much worse at
this point for the company if they hadn't undertaken that
downsizing,'' Sprinzen said. ``But that's nothing that they
entered into so willingly.''
Losing Money
GM's losses from North American operations -- not counting
impairment and restructuring charges -- may approach a
``massive'' $5 billion this year, S&P said yesterday. The $6.6
billion in cash used up so far this year by GM's North American
auto operations is contributing to a ``substantial'' additional
use of cash, S&P said yesterday.
Wagoner has repeatedly said GM has no plans to file for
bankruptcy. Fears of a filing sent the stock to an 18-year low on
Nov. 17. GM shares have fallen 42 percent this year, the most of
any company on the Dow Jones Industrial Average and the biggest
one-year drop since at least 1981.
``GM has an aggressive strategy to turn around our North
American business and we've been making progress in some
important areas,'' said GM spokeswoman Toni Simonetti. She said
GM stands by Wagoner's statement last month that there is ``no
plan, strategy or intention for GM to file bankruptcy.''
Cash
GM, which had cash and marketable securities of $19.2
billion at the end of the third quarter, has about $285 billion
in consolidated debt, S&P said. S&P maintains a negative outlook
on the automotive operations, meaning it's more inclined to
reduce the rating. It left the ratings for GMAC and its
residential-mortgage unit unchanged.
``In the past we might have felt at different points that
the concerns about bankruptcy risks were way overplayed,''
Sprinzen said on the conference call yesterday. ``But at this
juncture it's our conclusion that this isn't a far-fetched
possibility if the kind of deterioration in results that we've
seen over the last few quarters should continue.''
GM hasn't had a profit forecast since April because it says
it can't be certain about the outlook for North America. GM's
board last week approved a plan to bring its European chief, 47-
year-old Fritz Henderson, to the U.S. to replace Chief Financial
Officer John Devine.
Devine, 61, will extend an expiring five-year contract as
much as a year to assist Wagoner in stemming losses. The company
has lost money for four straight quarters, its longest
unprofitable streak since 1992.
The GM ratings cut means the automaker is considered the
same credit risk as Uruguay, Jamaica, and the Dominican Republic.
``We are not optimistic in the long run, especially if GM
fails to deal with the extravagant labor and health-care package
at the UAW and the heavy retiree burden,'' said Pete Hastings,
vice president of corporate fixed income at Morgan Keegan Inc. in
Memphis, Tennessee. ``I would not be surprised to see more
cuts.''
source: bloomberg.com
Senior Moderator
Joined: Sep 2002
Posts: 18,015
Likes: 1,736
The GM ratings cut means the automaker is considered the
same credit risk as Uruguay, Jamaica, and the Dominican Republic.
``We are not optimistic in the long run, especially if GM
fails to deal with the extravagant labor and health-care package
at the UAW and the heavy retiree burden,'' said Pete Hastings,
vice president of corporate fixed income at Morgan Keegan Inc. in
Memphis, Tennessee. ``I would not be surprised to see more
cuts.''
same credit risk as Uruguay, Jamaica, and the Dominican Republic.
``We are not optimistic in the long run, especially if GM
fails to deal with the extravagant labor and health-care package
at the UAW and the heavy retiree burden,'' said Pete Hastings,
vice president of corporate fixed income at Morgan Keegan Inc. in
Memphis, Tennessee. ``I would not be surprised to see more
cuts.''
If managed correctly, the denouement of bankruptcy could potentially resolve the UAW issue once and for all; albeit at some expense (pun?) of GM retirees.
Thread Starter
Moderator Alumnus
Joined: Oct 2000
Posts: 16,399
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From: Washington DC (NOVA)
GM suspends retirement account match for salaried employees
GM suspends retirement account match for salaried employees - - Reuters / December 15, 2005 - -Source: Automotive News
DETROIT -- General Motors is suspending contributions to its 401(k) retirement savings plan for salaried workers, a spokesman said on Thursday.
"We continue to monitor the business in determining when to reinstate the matching contributions," GM spokesman Robert Herta said.
The world's largest automaker was also dropping the requirement that up to 3 percent of worker's contributions and 100 percent of the automaker's contribution be invested in GM shares.
This was done to give employees more flexibility to choose their stocks and mutual funds, Herta said, adding that the changes take effect Jan. 1.
GM now contributes 20 cents for each $1 that workers invest in the 401(k) plan up to 6 percent of an employee's base salary, Herta said. GM last year reduced its 401(k) match from 50 cents on the dollar to 20 cents.
GM's financial woes, combined with the bankruptcy filing of Delphi Corp., its biggest suppler, have taken a toll on its once-robust stock price. GM shares have fallen 44 percent this year.
GM, which has lost nearly $4 billion this year, is struggling with high health-care and commodity costs, loss of U.S. market share to foreign rivals and slumping sales of its once-profitable sport utility vehicles.
To compound matters, GM's borrowing costs have soared since its credit rating was first cut to junk status in May. Standard & Poor's cut GM's ratings deeper into junk territory this week.
"We continue to monitor the business in determining when to reinstate the matching contributions," GM spokesman Robert Herta said.
The world's largest automaker was also dropping the requirement that up to 3 percent of worker's contributions and 100 percent of the automaker's contribution be invested in GM shares.
This was done to give employees more flexibility to choose their stocks and mutual funds, Herta said, adding that the changes take effect Jan. 1.
GM now contributes 20 cents for each $1 that workers invest in the 401(k) plan up to 6 percent of an employee's base salary, Herta said. GM last year reduced its 401(k) match from 50 cents on the dollar to 20 cents.
GM's financial woes, combined with the bankruptcy filing of Delphi Corp., its biggest suppler, have taken a toll on its once-robust stock price. GM shares have fallen 44 percent this year.
GM, which has lost nearly $4 billion this year, is struggling with high health-care and commodity costs, loss of U.S. market share to foreign rivals and slumping sales of its once-profitable sport utility vehicles.
To compound matters, GM's borrowing costs have soared since its credit rating was first cut to junk status in May. Standard & Poor's cut GM's ratings deeper into junk territory this week.
Thread Starter
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GM now contributes 20 cents for each $1 that workers invest in the 401(k) plan up to 6 percent of an employee's base salary, Herta said. GM last year reduced its 401(k) match from 50 cents on the dollar to 20 cents.
HSBC does 300% for the first 1% and 100% for the 2nd, 3rd and 4th percent of salary.
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GM incoming CFO to receive $1.55 million salary
GM incoming CFO to receive $1.55 million salary - - Reuters / December 09, 2005 - - Source: Automotive News
CHICAGO -- General Motors said on Friday that new CFO Frederick "Fritz" Henderson will receive a $1.55 million base salary in addition to potential bonus and long-term incentive plans.
GM named Henderson, 47, CFO and a vice chairman effective Jan. 1, succeeding John Devine, who has agreed to stay on for up to one year as a vice chairman to help with the transition.
Devine's base and incentive pay and benefits will remain unchanged for the extension of his five-year agreement, which expires on Dec. 13, GM said. GM will also continue to compensate Devine for the loss of his pension benefit from his prior employer, rival Ford Motor Co.
The balance of Devine's special grant of restricted stock units, 50 percent or 95,200 shares, will vest and become payable 18 months after his retirement, GM said.
In 2004, Devine received a $1.55 million salary, $1.4 million bonus, options on 160,000 shares, $796,000 under a long-term incentive plan and a $385,020 contribution to replace his Ford pension, according to GM's proxy.
GM named Henderson, 47, CFO and a vice chairman effective Jan. 1, succeeding John Devine, who has agreed to stay on for up to one year as a vice chairman to help with the transition.
Devine's base and incentive pay and benefits will remain unchanged for the extension of his five-year agreement, which expires on Dec. 13, GM said. GM will also continue to compensate Devine for the loss of his pension benefit from his prior employer, rival Ford Motor Co.
The balance of Devine's special grant of restricted stock units, 50 percent or 95,200 shares, will vest and become payable 18 months after his retirement, GM said.
In 2004, Devine received a $1.55 million salary, $1.4 million bonus, options on 160,000 shares, $796,000 under a long-term incentive plan and a $385,020 contribution to replace his Ford pension, according to GM's proxy.
Thread Starter
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Originally Posted by gavriil
This is extremely high of a base salary when one thinks the trouble GM is in currently and what could happen in the future.
On second thought check out the rest of the wizards' base pay at GM:
Mr. G. Richard Wagoner Jr., 52
Chairman, Chief Exec. Officer and Head of North American Operations $ 4.66M
Mr. John M. Devine , 60
Vice Chairman and Chief Financial Officer $ 2.95M
Mr. Robert A. Lutz , 73
Vice Chairman of Product Devel., Acting Chief of GM - Europe and Head of Global Product Devel. of North America $ 2.95M
Mr. Thomas A. Gottschalk , 62
Exec. VP - Law and Public Policy and Gen. Counsel $ 1.69M
Mr. Gary L. Cowger , 57
VP of Global Manufacturing and Labor of North America $ 1.51M
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Devine is the guy substituted by the new CFO. So in a way at 1.5 mil the new CFO is a lot cheaper than the outgoing one (altough he is not leaving the company yet).
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Base compensation for Ford's execs:
Mr. William Clay Ford Jr., 47
Chairman, Chief Exec. Officer, Member of Fin. Committee, Chairman of Environmental & Public Policy Committee and Member of Environmental & Public Policy Committee $ 0
He did exercise $ 5.33M worth of options though
Mr. Jim Padilla , 58
Pres, Chief Operating Officer $ 3.00M
Padilla exercised $ 686.00K worth of options last year.
Mr. Gregory C. Smith , 53
Vice Chairman $ 1.88M
Mr. William Clay Ford Jr., 47
Chairman, Chief Exec. Officer, Member of Fin. Committee, Chairman of Environmental & Public Policy Committee and Member of Environmental & Public Policy Committee $ 0
He did exercise $ 5.33M worth of options though
Mr. Jim Padilla , 58
Pres, Chief Operating Officer $ 3.00M
Padilla exercised $ 686.00K worth of options last year.
Mr. Gregory C. Smith , 53
Vice Chairman $ 1.88M
Banned
Joined: Feb 2005
Posts: 7,309
Likes: 0
From: Champaign, Illinois
Originally Posted by chungkopi
that's all they make?
Suzuka Master
Joined: Oct 2003
Posts: 7,516
Likes: 1
From: Lakeway, TX
Originally Posted by cusdaddy
That's not a high salary for a CFO position of a major US corporation. GM is actually getting a pretty good deal.
Plus GM's CFO is going to have his work cut out for him. I imagine his job will be about 10 times as hard as a CFO job at Microsoft or WalMart.
Registered Abuser of VTEC
Joined: May 2004
Posts: 6,542
Likes: 115
From: Edmonton, Alberta
I don't see what these guys do to deserve that much money. Anything more than $500 000 per year is ridiculous for any person. I'm firm that nobody should make more than that as a salary (investments not included).
Cruisin'
Joined: Aug 2002
Posts: 24
Likes: 0
From: Westchester NY
Originally Posted by gavriil
On second thought check out the rest of the wizards' base pay at GM:
Mr. G. Richard Wagoner Jr., 52
Chairman, Chief Exec. Officer and Head of North American Operations $ 4.66M
Mr. John M. Devine , 60
Vice Chairman and Chief Financial Officer $ 2.95M
Mr. Robert A. Lutz , 73
Vice Chairman of Product Devel., Acting Chief of GM - Europe and Head of Global Product Devel. of North America $ 2.95M
Mr. Thomas A. Gottschalk , 62
Exec. VP - Law and Public Policy and Gen. Counsel $ 1.69M
Mr. Gary L. Cowger , 57
VP of Global Manufacturing and Labor of North America $ 1.51M
Mr. G. Richard Wagoner Jr., 52
Chairman, Chief Exec. Officer and Head of North American Operations $ 4.66M
Mr. John M. Devine , 60
Vice Chairman and Chief Financial Officer $ 2.95M
Mr. Robert A. Lutz , 73
Vice Chairman of Product Devel., Acting Chief of GM - Europe and Head of Global Product Devel. of North America $ 2.95M
Mr. Thomas A. Gottschalk , 62
Exec. VP - Law and Public Policy and Gen. Counsel $ 1.69M
Mr. Gary L. Cowger , 57
VP of Global Manufacturing and Labor of North America $ 1.51M
They are too damn old, thats why they are sucking.
is Pretty Much a Moron
Joined: Oct 2001
Posts: 8,140
Likes: 2
From: Rochester, NY
Originally Posted by youngTL
I don't see what these guys do to deserve that much money. Anything more than $500 000 per year is ridiculous for any person. I'm firm that nobody should make more than that as a salary (investments not included).
Originally Posted by youngTL
I don't see what these guys do to deserve that much money. Anything more than $500 000 per year is ridiculous for any person. I'm firm that nobody should make more than that as a salary (investments not included).
And honestly, given the condition that GM is currently in, I think that as a move of good faith, the executive team should take a cut in their salaries and allow that extra money to be applied to other areas. A couple million dollars dedicated to the design of a new car line or improving an existing car line might make a big difference in the current state of the company.
Outnumbered at home
Joined: Jan 2001
Posts: 5,334
Likes: 1
From: MD
Originally Posted by youngTL
I don't see what these guys do to deserve that much money. Anything more than $500 000 per year is ridiculous for any person. I'm firm that nobody should make more than that as a salary (investments not included).
I like when companies give a very low base salary and put all the money on bonus' based on performance of the company and stock. That way they only earn money if they turn the company a profit.
on to the next one...
Joined: May 2004
Posts: 4,872
Likes: 0
From: Mpls. MN
Originally Posted by youngTL
I don't see what these guys do to deserve that much money. Anything more than $500 000 per year is ridiculous for any person. I'm firm that nobody should make more than that as a salary (investments not included).
Simply put, it's capitalism as it's best/worst.
Thread Starter
Moderator Alumnus
Joined: Oct 2000
Posts: 16,399
Likes: 8
From: Washington DC (NOVA)
They should do what Ford did with Bill Ford and what Apple did also. Zero base salary and your compensation is totally linked to company performance via options. Simple, fair and super capitalistic.
Why should I pay you stratospheric amounts if you have not performed? Get 100K a year for your time and the rest should be bonuses. Or even clawbacks in some cases.
Why should I pay you stratospheric amounts if you have not performed? Get 100K a year for your time and the rest should be bonuses. Or even clawbacks in some cases.
Banned
Joined: Feb 2005
Posts: 7,309
Likes: 0
From: Champaign, Illinois
These old geezers probably are in their offices, listening to the ABBA song "Money Money Money" all day. If I was getting paid like that, I would. 
So, I go searching for the "Best of ABBA" gold collection on Amazon ... it's the #10 seller in my hometown!!!
So, I go searching for the "Best of ABBA" gold collection on Amazon ... it's the #10 seller in my hometown!!!
Last edited by M TYPE X; Dec 17, 2005 at 10:10 AM.
Registered Abuser of VTEC
Joined: May 2004
Posts: 6,542
Likes: 115
From: Edmonton, Alberta
Originally Posted by gavriil
They should do what Ford did with Bill Ford and what Apple did also. Zero base salary and your compensation is totally linked to company performance via options. Simple, fair and super capitalistic.
Why should I pay you stratospheric amounts if you have not performed? Get 100K a year for your time and the rest should be bonuses. Or even clawbacks in some cases.
Why should I pay you stratospheric amounts if you have not performed? Get 100K a year for your time and the rest should be bonuses. Or even clawbacks in some cases.
Banned
Joined: Feb 2005
Posts: 7,309
Likes: 0
From: Champaign, Illinois
Originally Posted by youngTL
That's a philosophy I agree with. Why should the lower workers get shafted so bad when these old guys are making millions? It just doesn't make sense to me except that the rich want to stay rich.
I work all night, I work all day, to pay the bills I have to pay
Ain't it sad
And still there never seems to be a single penny left for me
That's too bad
In my dreams I have a plan
If I got me a wealthy man
I wouldn't have to work at all, I'd fool around and have a ball...
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
A man like that is hard to find but I can't get him off my mind
Ain't it sad
And if he happens to be free I bet he wouldn't fancy me
That's too bad
So I must leave, I'll have to go
To Las Vegas or Monaco
And win a fortune in a game, my life will never be the same...
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
It's a rich man's world
Ain't it sad
And still there never seems to be a single penny left for me
That's too bad
In my dreams I have a plan
If I got me a wealthy man
I wouldn't have to work at all, I'd fool around and have a ball...
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
A man like that is hard to find but I can't get him off my mind
Ain't it sad
And if he happens to be free I bet he wouldn't fancy me
That's too bad
So I must leave, I'll have to go
To Las Vegas or Monaco
And win a fortune in a game, my life will never be the same...
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
Money, money, money
Must be funny
In the rich man's world
Money, money, money
Always sunny
In the rich man's world
Aha-ahaaa
All the things I could do
If I had a little money
It's a rich man's world
It's a rich man's world
That was uncalled for...
Joined: Sep 2004
Posts: 7,288
Likes: 43
From: Toronto, Ontario
Fiat Now Worth More than General Motors?
First Time in History Fiat has Led GM in Market Value
Its a mad, mad, mad world, highlighted by recent news that the market value of Europes basket case automaker Fiat has just surpassed that of General Motors, the worlds largest automaker, according to the Financial Times. How did that happen?
GM is only number one based on number of vehicles sold, not profitability - that last honor held by Toyota or Porsche, depending on if youre looking at overall profitability or on a gross margin basis, respectively. Fiat, on the other hand, seemed on the brink of bankruptcy only last year, just prior to receiving a cash infusion of about $2.4 billion from GM, a settlement that came as a result of a put option orchestrated by ex-GM CEO Jack Smith. It bought back Maserati from Ferrari, aligned its operations with the Alfa Romeo brand, and recommitted to returning the storied marque to North America without naming an exact date - probably sometime in 2008.
But while sales of some of its variously branded models are up this year, Fiats most impressive coup has been to restore confidence among investors. The Italian automaker has seen better times in the past for sure, but compared to GMs current crisis it is riding high.
Fiat is now worth E10.7 billion, or $12.87 billion, compared to General Motors $12.67 billion. While the margin is only slight, it marks the first time in history Fiat has surpassed GM in market value, and by so doing, brings to light that Fiat may not be the last to do so.
To put things in perspective, only two-and-a-half years ago GM was worth more than seven times as much as Fiat, according to the Financial Times report, and was expected to purchase the Italian firms automotive division - Fiat, like many other automakers, makes much more than just cars, trucks, vans and SUVs.
With regards to market share, Toyota is dangerously close to eclipsing the Detroit-based auto giant in the global number of vehicles sold, and due to GMs recent announcement of up to nine plant closures that will result in 100,000 less vehicles being produced annually, may move into first place sooner than later.
Source: Automobile.com
Interesting...
Its a mad, mad, mad world, highlighted by recent news that the market value of Europes basket case automaker Fiat has just surpassed that of General Motors, the worlds largest automaker, according to the Financial Times. How did that happen?
GM is only number one based on number of vehicles sold, not profitability - that last honor held by Toyota or Porsche, depending on if youre looking at overall profitability or on a gross margin basis, respectively. Fiat, on the other hand, seemed on the brink of bankruptcy only last year, just prior to receiving a cash infusion of about $2.4 billion from GM, a settlement that came as a result of a put option orchestrated by ex-GM CEO Jack Smith. It bought back Maserati from Ferrari, aligned its operations with the Alfa Romeo brand, and recommitted to returning the storied marque to North America without naming an exact date - probably sometime in 2008.
But while sales of some of its variously branded models are up this year, Fiats most impressive coup has been to restore confidence among investors. The Italian automaker has seen better times in the past for sure, but compared to GMs current crisis it is riding high.
Fiat is now worth E10.7 billion, or $12.87 billion, compared to General Motors $12.67 billion. While the margin is only slight, it marks the first time in history Fiat has surpassed GM in market value, and by so doing, brings to light that Fiat may not be the last to do so.
To put things in perspective, only two-and-a-half years ago GM was worth more than seven times as much as Fiat, according to the Financial Times report, and was expected to purchase the Italian firms automotive division - Fiat, like many other automakers, makes much more than just cars, trucks, vans and SUVs.
With regards to market share, Toyota is dangerously close to eclipsing the Detroit-based auto giant in the global number of vehicles sold, and due to GMs recent announcement of up to nine plant closures that will result in 100,000 less vehicles being produced annually, may move into first place sooner than later.
Source: Automobile.com
Interesting...
oh how the mighty have fallen...
