October 23rd, 2009 at 12:02pm
GM CEO Fritz Henderson gets a salary cut, but gets a compensation raise at the same time. The U.S. Treasury Department says Chrysler Financial will be liquidated by the end of 2011. Kia posted a third-quarter profit thanks to tax breaks and new car models. All that and more, plus a preview of this week’s episode of Autoline Detroit about how we need to keep advancing alternative fuels.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. GM CEO Fritz Henderson gets a pay cut, or does he? Chrysler financial may be on death row. And Kia turns a profit.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Friday, October 23, 2009. I’m Murray Feldman, Fox 2 News Detroit, taking yet another turn in the Autoline Daily anchor chair. No worries though, McElroy will be back next week. Here’s the news.
We told you about the President’s Pay Czar yesterday and how he planned to wrangle-in executives’ salaries. Well today, word has leaked out, according to Bloomberg News, that Fritz Henderson will be taking a salary cut, but not really a pay cut. Here’s what they’ve done. Mr. Henderson’s GM salary is cut by 25 percent, down to around 950,000. But he’ll also get over $4 million annually in company stock so in fact, if the corporation starts heading up, he is really getting a raise. But all that’s tied to performance so we’ll have to see how GM fares. By the way, in case you’re wondering, Chrysler’s Sergio Marchionne will not be affected because he is paid by the European parent, Fiat, however, other executives at the Auburn Hills automaker will take a hit but no word on that just yet.
Meanwhile, speaking of hits, Chrysler Financial, the once mighty lender to both wholesale and retail arms of its namesake automaker, is going out of business. Since GMAC replaced the group, the Detroit Free Press tells us, as the preferred financial arm of Chrysler LLC, the writing has been on the wall. The announcement, which came from the Treasury Department, said that it will be liquidated by the end of 2011.
Yesterday we reported that Hyundai posted a third quarter profit and now its South Korean partner is following suit. According to the Wall Street Journal, Kia posted a third quarter profit (subscription required) thanks to tax breaks and strong sales of new car models. The company earned a profit of 337 million dollars for the third quarter. However, if the dollar continues to weaken, it could impact Kia’s profits.
Earlier this week we reported that Opel employees in Spain were protesting Magna’s proposed job cuts. Now, according to the AFP, the two sides have reached a deal. Magna originally planned to cut 1,300 jobs but will now cut only 900. The company also agreed to keep production of some models in Spain and keep the plant open for at least 10 more years.
Ward’s reports that Infiniti’s sales have dropped 33 percent this year, BUT surprisingly its average transaction prices are up $1,000 per unit (subscription required). Ben Poore, the brand’s Vice President, says part of the reason for the decline is because of low inventory, which is probably also the reason prices are up. At some points they’ve only had a 25-day supply of vehicles.
In an interview with Automotive News, Carlos Ghosn, the CEO of Nissan said his company is not going to build dedicated hybrids like the Toyota Prius (subscription required). Instead, Japan’s number-three automaker will only offer the technology on existing models, like the Altima or the redesigned Infiniti M, which was just revealed at the Tokyo Motor Show. Instead, Nissan will focus on electric-only vehicles – and it has some big plans for its upcoming EVs.
Nissan wants to be a real pioneer in the EV field, and it hopes to make a big splash with the LEAF. The zero-emission hatchback will kick off a North American tour on November 13 when it debuts in Los Angeles. After that it will stop in 22 cities in 11 states across the U.S., plus Vancouver, Canada. The cross-country road show wraps up next February in New York City.
Coming up, a preview of this week’s episode of Autoline Detroit, we’ll be back right after this.
This week on Autoline John is joined in the studio by Bruce Dale, Ph.D, a professor of bio-based technologies at Michigan State University. Also on his panel are Tim Higgins of the Detroit Free Press and James Amend of Ward’s Auto. In the following clip, Dr. Dale talks about how we need to keep advancing alternative fuels to end our dependence on oil and how difficult the switch will be.
You can catch the rest of this episode of Autoline on our website right now.
Ok, it’s the end of the week and that means it’s time to announce the winner of our trivia contest. We asked you to identify what kind of car this is. We thought it’d be a real challenge, but there’s no outsmarting you guys. As most of you correctly responded it’s a Chrysler Airflow. And some of you who really know your stuff were able to tell us it’s a 1934 model. And today’s lucky winner is Anne Steele of Belmont, California. Congratulations Anne, you’ve just won an Autoline coffee mug. You have to supply the coffee — there is an recession going on, ya know.
And that’s it for today’s top news in the global automotive industry. I’m Murray Feldman, Fox 2 News, Detroit. Thanks for watching, John will be sitting in for me on Monday – no, not really, it’s still his show…sometimes.