General Motors

Rich Evenhouse / creative commons

Profit-sharing checks to GM's 45,000 workers are expected to break a record. The news comes as GM is tallying its profit numbers for 2010. The company will release the amount of the checks soon.

The Wall Street Journal reports:

General Motors Co. is planning to pay its hourly workers in the U.S. at least $3,000 each in profit-sharing payouts, the largest amount ever, after the company's return to profitability in 2010, people familiar with the matter said...The auto maker is trying to tow the line between fiscal prudence and expectations that it will share recent gains with workers as the company heads into labor negotiations with the United Auto Workers.

Other U.S. automakers are also sharing the wealth.

Ford Motor Company paid hourly workers more than $5,000, "more than the company was required to pay under the profit-sharing formula in its contract with the UAW," according to the Wall Street Journal.

And Chrysler gave their workers $750 despite the company's losses in 2010.

The Detroit Free Press reports that the checks are expected to be handed out in the months ahead, and the size of the checks could help the automaker in its negotiation with the United Auto Workers union. From the Freep:

The Detroit Three, which will negotiate new labor contracts with the UAW this year, may be giving higher-than-required payments to autoworkers as part of a strategy to convince the rank and file to keep labor costs flat in return for bigger profit sharing in the future, labor experts previously told the Free Press.

General Motors is jumping back into advertising during the Superbowl.  GM will likely spend $15,000,000  on ads focusing on its Chevrolet brand.

Many car companies like Ford Motor Company are using social media and Internet-based advertising more and more.  But analyst Ed Kim of AutoPacific says Superbowl ads still generate a lot more buzz.

"Any automaker advertising during the Superbowl is certainly going to have a whole lot of exposure to a whole lot of people all across America," says Kim.

Kim says GM's current marketing czar, Joel Ewanick, used to work for Hyundai, so he has experience using the Superbowl to improve a car company's image and sales.   At the peak of the recession, Hyundai began a highly successful campaign which allowed people to return Hyundai cars if they lost their jobs.  Kim says Hyundai used the campaign to good effect in its Superbowl ads.

GM did not advertise during the Superbowl last year and the year before.  The automaker does plan a social media campaign in conjunction with the Superbowl.  GM will release its Superbowl ads early to its Facebook fans.

Kim says that will generate some extra buzz for GM.

The ads will focus on the Chevrolet brand.   Chevy generates about 70% of GM's sales in the U.S.

General Motors is saying thanks but no thanks to more federal loans.  The Detroit automaker is withdrawing its application for more than 14-billion dollars in low-cost loans from the Department of Energy.   

Many car companies including Ford have received DOE loans, which are intended to help auto companies revamp factories to build more fuel-efficient cars and trucks.  GM applied for loans through the program shortly after emerging from bankruptcy.  But the automaker says its financial situation has improved since then. 

Gerry Meyers is a professor at the University of Michigan Ross School of Business. He's also a former Chairman of American Motors Corporation.  He says taking the loans would have given GM more debt.   And the automaker told prospective IPO investors late last year that it would avoid going deeply into debt.

It’s quite clear that they’re trying to clean up that balance sheet and also get the government out of the business, so it’s just another step in that direction and I think it’s wise.

Meyers says the next step to GM’s recovery is to stop the revolving door at the top executive level.  The company has had four CEOs in two years.   

Wally G / Flickr

The head of the government's bailout program says the U.S. Treasury Department hopes to sell its remaining shares of General Motors stock over the next two years.

The Associated Press reports:

Timothy Massad, the senior Treasury official managing the government bailout fund, told a congressional hearing that there is now a path forward for Treasury to sell its remaining shares in GM over the next two years if market conditions permit. The Treasury Department trimmed its stake in GM to 26.5 percent of the company, down from 61 percent, when it sold $23.1 billion of GM stock at an initial public offering in November.

General Motors is stepping up its advertising budget for major sporting events.   GM says it has reached a deal with NBC to be the exclusive domestic automotive advertiser during the 2012 London Olympics. 

General Motors invested heavily in Olympic advertising in the past, but that spending dipped as the automaker has struggled in recent years. That reduced spending also included the Super Bowl. 

General Motors' Headquarters, Detroit, MI
Sarah Hulett / Michigan Radio

Dan Akerson, Chairman and CEO of General Motors, is planning to meet Friday with members of Michigan's congressional delegation.  That's according to an official familiar with the meeting.  The official, who spoke on the condition of anonymity, told The Associated Press that, "it will give Akerson a chance to meet some Michigan lawmakers for the first time".

Akerson was named GM's CEO in September, 2010. GM has not yet commented on the meeting.

As the AP notes:

Michigan's 15 House members and two senators were key allies for GM as it underwent a government-led bankruptcy in 2009. The Detroit company had its initial public offering last November, reducing the government's ownership share to 33.3 percent.

GM's Renaissance Center
Santosh Krishnan

GM is offering some of its employees a buyout this Christmas. The buyout offer will target at 8 assembly plants in Michigan. 

The Associated Press reports:

General Motors is offering buyouts to several thousand skilled trades workers at 14 plants around the U.S. 

The automaker will pay eligible workers $60,000 to retire with full benefits. Younger workers will have the option to take the $60,000 in exchange for giving up retiree health care and other benefits.   GM spokesman Chris Lee didn't know how many workers will get the offers.

Sarah Hulett / Michigan Radio

Dan Akerson, General Motors' CEO, told the Economic Club of Washington D.C. this morning that his company was humbled by its "near-death experience" during its 2009 bankruptcy.

GM to hire 1,000 in MI

Nov 30, 2010

General Motors has just announced that it will hire 1,000 engineers to work on battery technology in Michigan. The jobs include helping to develop batteries for hybrid, electric and hydrogen fuel cell vehicles. Most of the jobs will be at a technical center in Warren.

The Detroit Free Press reports the jobs come as GM:

…prepares to deliver the first Chevrolet Volt extended-range electric cars next month… GM plans to build 10,000 Volts by the end of 2011 and at least 45,000 in 2012. Initially, the Volt will sell in California, New York City, Washington, D.C., and Austin, Texas. Next spring, those markets will expand to include Michigan, New Jersey, Connecticut and the rest of New York and Texas. Within a year and a half, GM plans to sell the Volt nationwide.

General Motors formally announced today that it is investing more than 160 million dollars in plants in Flint, Bay City and in Defiance, Ohio.

 The three plants produce components for the Chevy Volt, Cruze and a third unnamed Chevrolet small car.

 Bill Jordan says GM’s announcement is an early "Christmas present.”   Jordan is the president of United Auto Workers local 599.    He says GM’s investment shows workers are doing the job right. 

General Motors (GM) stock returned to trading on Wall Street yesterday for the first time since the company collapsed, declared bankruptcy, and was rescued by an infusion of fifty billion taxpayer dollars.

While Michigan has been focusing on diversifying its economy to make up for the loss of jobs in the auto industry, GM's return to public trading suggests that the auto industry in Michigan will continue to be a major economic player in the region.

GM boosts stock price

Nov 16, 2010

General Motors says it’s raising the price range for its initial public stock offering.

The stock will sell for $32 to $33 per share.

That price range is about 14% higher than was previously expected.

GM didn’t give a reason for the increase but people who have been briefed on the sale say it’s because of high demand from investors.

The IPO is expected on Thursday.  The Detroit Free Press reports, "the U.S. Treasury is selling 365 million shares, which will reduce its stake in GM from 60.8% to about 40%."

Old General Motors Headquaters
Historic American Buildings Survey

General Motors (GM) will be in the news a lot this week, so if you sat out the GM story up until this point, here's a quick summary to get you caught up.

Today's General Motors is not your father's General Motors. The old GM went bankrupt. The company couldn't pay its bills (they had some big ones).

But instead of letting the whole company collapse, a court stepped in to reorganize the auto giant (under chapter 11 bankruptcy).

The court split the old GM in two.

Former GM Wyoming Stamping Plant
Lindsey Smith / Michigan Radio

Michigan Radio's Lindsey Smith covered the auction at the former GM Wyoming Stamping plant. The plant closed in June 2009 as part of GM's bankruptcy.

The auction was held on Wednesday and Thursday of this week. The auctioneers said they'll sell off anything leftover today.

Smith said it was easy to get lost as she took photos of the more than 2 million square foot building. Here's an audio slideshow she put together:

(c) GM Logo/Photo Courtesy of General Motors

General Motors announced this morning that it made $2 billion in the third quarter.  The Associated Press reports:

The profit was fueled by GM's international operations and strong revenue from newly introduced car and crossover models in North America.

The automaker's actual revenue rose 36% to a little more than $34 billion.  This was the third-straight quarter in which GM was profitable.

GM Renaissance Center in Detroit.
John F. Martin / Creative Commons

 Next month’s General Motors’ big stock offering is expected to be much less than at one time predicted.

The GM Initial Public Offering is expected to hit the market around November 18th.

 When GM initially started talking about selling stock, the speculation was that November’s sale could be easily one of the largest initial public offerings in history.   Perhaps generating more than $16 billion.

Now some analysts are predicting the GM IPO will collect only about $6 billion. 

GM Renaissance Center in Detroit
Steve Carmody / Michigan Radio

General Motors (or should I say General Motors Holding Company) is planning to hold a public stock sale in mid-November. It will be the first since the world's largest company emerged from chapter 11 bankruptcy reorganization last year.

General Motors Holding Company emerged as the wheat. Motors Liquidation Company emerged as the chaff.