June 9th, 2011 at 11:52am
GM is again seeking to sell its money-losing Opel Division and this time Volkswagen and Chinese car companies may be interested. Unions at Volkswagen want to buy a 3 percent stake in the company to increase their influence over how the automaker is run. Autoworkers at Maruti-Suzuki in India are striking for longer tea breaks, among other things. All that and more, plus the fourth segment of the Race to Replace Mulally.
This is Autoline Daily for June 9, 2011. And now the news.
OPEL FOR SALE AGAIN
Reports out of Germany say that General Motors is looking at selling off Opel . . . again. Back when it was going through bankruptcy in 2009 GM planned to sell Opel to Canadian auto supplier Magna, but GM backed out of the deal at the last moment saying it didn’t want to lose Opel’s engineering prowess. But Opel is losing big money and European laws make it very difficult to restructure the company. Reuters reports possible buyers could be Volkswagen or Chinese car companies.
VW UNIONS WANT 3% OF COMPANY (subscription required)
Europe in general and Germany in particular are very pro-union places. The Wall Street Journal reports Volkswagen’s unions want to acquire up to 3 percent of VW stock, worth nearly a billion Euros, roughly $1.5 billion. Workers want a stronger hand in running the company as well as a bigger share of future profits.
MORE CARS, LESS SUMMER BREAK AT BMW, VW
In related German labor news, Bloomberg reports BMW and VW will cut some of their workers’ summer vacations to meet production demand. At two of its factories, BMW is chopping the summer break down from a whole month to just one week.
TEA TIME (subscription required)
In still more labor-related news, nearly 2,000 Maruti-Suzuki workers in India have been on strike for four days. Some of the employees’ demands include better working conditions and longer tea breaks of all things. And I’d agree; that’s something worth fighting for. Right now their tea breaks are only seven and a half minutes long – hardly enough time to even heat up the water!
MORE MPG, FAR FROM FREE
The Center for Automotive Research says the White House’s proposed CAFE standards for 2025 would be bad news for the auto industry. The proposed target of between 47 and 62 miles per gallon would raise prices for an ordinary family sedan to $55,000, according to the CAR study. Citing the job losses that would result from such a mandate, Sean McAlinden, one of the study’s authors, says, “… why would they be interested in destroying an industry they just saved?”
Uh oh! Not again! The AFP reports that Saab halted production at its plant in Trollhaettan, Sweden because of supply shortages. Saab says manufacturing is on a day-to-day basis, which is not the way to run a plant. Some suppliers are still waiting to get paid and that sounds like the real reason Saab isn’t building cars.
Coming up next, a look at two of the contenders in the race to become the next CEO of the Ford Motor Company.
RACE TO REPLACE MULALLY
All this week I’ve been taking a look at the executives at Ford who are in the race to replace CEO Alan Mulally when he decides to retire. The company’s chairman, Bill Ford, said that replacement is going to come from within the company. I’ll announce who I think is going to become the next CEO on tomorrow’s show. But today we need to look at two of the contenders. Jim Farley is one of the coolest guys in the auto industry, and definitely one of the best marketing executives. He actually started his career at Toyota, where he really made his name by launching the Scion brand. It got off to a roaring start, and while Scion isn’t doing all that great right now, it did when Farley was there. That success got him promoted to vice president of all marketing at Toyota Motor Sales USA, and then promoted again as group vice president and general manager of Lexus. All that really caught Ford’s attention and in 2007 it stole him away from Toyota. But his career also hit something of a speed bump at Ford, at least in terms of making it to the CEO position. In 2009 Ford gave him operational responsibility for Canada, Mexico and South America. But only one year later, Ford took that responsibility away from him to have him concentrate on global marketing, where the company still has a lot of room left to improve. Farley can still leave a lasting mark on Ford and the industry in that position, but I believe whoever becomes CEO is going to have to have extensive operations and overseas experience, and that leads us to the next contender. John Fleming is kind of a dark horse in the race to become CEO. Not well known outside of Ford, he brings impeccable credentials to the race to replace Mulally. Born in Liverpool, here’s yet another Englishman in the running, and he bleeds Ford blue. Fleming actually started working at Ford’s Halewood plant in England when he was only 16 years old. He worked his way up the manufacturing-side of the business, and in the mid-1990s was assigned to work in the U.S., also in manufacturing. And then they moved him back to Europe to run all the manufacturing operations there. They liked what he did, and in 2005 he was promoted to group vice president and CEO of Ford of Europe. In 2009 he moved back to the U..S to run all manufacturing and labor affairs for the company worldwide. What I like about Fleming’s chances is that he has extensive operations experience in North American and Europe, but he’s also in a good spot from an age standpoint. Fleming turns 60 this year, and if Mulally retires two years from now, Fleming would still be able to fill the CEO role for about three years. That could buy the board more time to determine which of the Young Turks should ultimately get that position. Don’t miss tomorrow’s show when I announce who I think will actually get the nod to be the next CEO.
Don’t forget to tune in to Autoline After Hours tonight at 7 p.m. Eastern Time. Our guest tonight will be Francois Castaing, the former head of engineering at Chrysler back in the day when the company made boatloads of money. He also ran Renault’s racing program earlier in his career. Join me and the Autoextremist, Peter De Lorenzo, along with a cameo appearance from Jason Vines, tonight, for the best insider discussion of what’s going on in the auto industry.
And that is the end of today’s report, we’ll see you tomorrow.