Episode 456 – Whitacre Leaves GM, Infiniti Performance Line, Ford Auctions Concepts For Charity

August 13th, 2010 at 12:00pm

Runtime 7:28

More news and analysis of CEO Ed Whitacre’s decision to leave General Motors. Infiniti just announced its new in-house performance division called IPL, which is short for “Infiniti Performance Line.” Ford auctioned-off a number of its concept cars in order to raise money for charity. All that and more, plus a look at Transonic Combustion, a company that’s invented a new type of fuel-injection system that can make a gasoline engine get the same kind of fuel economy as a diesel.

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This is Autoline Daily for Friday, August 13, 2010. And now, the news.

GM WANTED WHITACRE TO STAY
We’re learning more about Ed Whitacre’s decision to step down as chairman of General Motors. Bloomberg reports that GM’s board wanted Whitacre to stay on for a few more years. As GM prepared its IPO, or stock offering, investment firms wanted to know the company’s long-term succession plans. Now they know.

WHO IS DANIEL AKERSON?
Or do they? Daniel Akerson, who replaces Whitacre, is an unknown quantity in the auto industry. While well-known in investment-banking circles, Akerson has no operations experience in an industrial corporation. And yet now he’s in charge of all operations at GM. At 61 years old, he’s likely to work at GM for only four years, at the most. And it sounds like he doesn’t have the backing of the people who form the core automotive group at GM. The Detroit Free Press reports that former Vice Chairman Bob Lutz says Akerson, and I quote, ” . . . (will) need to temper his preconceived notions with a willingness to listen to those who have transformed GM from a product and marketing standpoint.” Doesn’t exactly sound like a ringing endorsement, does it?

DECISION TO LEAVE SMART?
Here’s my Autoline insight. Ed Whitacre is smart to step-down right now. He can declare victory and ride out of town as a hero. Or at least as a hero in his own mind. While GM is making good progress, it’s by no means out of trouble. Whitacre’s decision to keep Opel may come back to haunt GM. Moreover, it looks like car sales could be slowing down in the American market, which could stop GM’s recovery in its tracks. By stepping down now, Ed Whitacre is gettin’ while the gettin’ is good.

DEALERSHIP CLOSINGS SLOW DOWN
2009 was a turbulent year for the auto industry and especially for GM and Chrysler. Aside from filing bankruptcy, one of the biggest challenges they faced involved reducing their dealer count in the U.S. According to the Detroit News, a record-number of stores closed last year – 1,603. But that number is down this year. So far 258 dealerships have closed. That leaves around 18,000 of them compared to nearly 25,000 a decade ago! More of them will close as Ford winds-down Mercury. The closures are tough for people and communities but Ward’s reports that GM and Chrysler could be in the “sweet spot” (subscription required) for the number of dealerships they have. The survivors will be a lot more profitable.

INFINITI PERFORMANCE LINE
Infiniti just announced its new in-house performance division called IPL, which is short for “Infiniti Performance Line.” The first vehicle to get tweaked is the G37 Coupe. The car gets new front and rear fascias, redesigned sill moldings and a rear spoiler. The computer controlling its 3.7-liter V-6 is retuned to optimize the air/fuel ratio and raise the redline. It now tops out at 7,400 RPM. The engine breathes through a new high-flow dual-exhaust system with 30 percent less back pressure than the base G car. Output is 348 horsepower and 276 pound-feet of torque, gains of 18 and six, respectively. As you’d expect, the car also gets an upgraded suspension system.

FORD AUCTIONS CONCEPTS FOR CHARITY (subscription required)
Yesterday Ford auctioned off a number of its concept cars in order to raise money for charity. According to Ward’s, 18 concept cars from Ford, Lincoln and Mercury were auctioned off to benefit the Juvenile Diabetes Research Foundation and the Detroit area’s Children’s Center of Wayne County. This is the second time Ford has done this, the first time was back in 2002. The company said they plan to do more of the same in the future but won’t make everything available because it wants to preserve its history.

BIG TRUCK SALES GROW (subscription required)
One leading indicator of where the economy is headed is the sales of large trucks and things seem to be headed in the right direction. According to Ward’s, sales of big trucks in July were close to 19,000 units, which is over a 12 percent gain compared to last year. All groups saw sales increases except for class-four and class-seven trucks. For the year, big trucks sales are up over 10 percent compared to 2009.

Could it really be possible to simply bolt a new fuel-injection system on an engine and be able to meet the strictest fuel economy standards? Coming up after the break, we’ll be talking with a company that says it can do just that.

NEW FUEL INJECTION SYSTEM
Transonic Combustion is a company that’s invented a new type of fuel injection system that can make a gasoline engine get the same kind of fuel economy as a diesel. Of course, all kinds of companies are making claims about their breakthroughs, but when I saw that former GM Vice Chairman Bob Lutz, former Delphi Vice Chairman Don Runkle, and private equity honcho Vinod Khosla are on the board of Transonic, I knew we had to learn more about it. On Autoline After Hours last night, we had Chris de Boer on the show. He’s the head of R&D for Transonic, and has spent his entire career developing engines. Here’s a clip from that show.

You can catch the entire show on the John’s-Journal section of our website.

And don’t forget that next Wednesday night, August 18th, Autoline After Hours will be webcasting live from the Woodward Avenue Dream Cruise, the largest automotive event in the world. And if you’d like to swing by our broadcast booth that night, please do. We’ll be at the Balmoral Center building at Woodward and Normandy. If you’ve got a classic car, or any kind of interesting car to show off bring it by as well, but we need you to pre-register it with us. Check out the John’s Journal section of our website at www.autolinedetroit.tv to get all the info.

And that is it for today’s report on the top news in the global automotive industry. Thanks for watching, we’ll see you Monday.

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20 Comments to “Episode 456 – Whitacre Leaves GM, Infiniti Performance Line, Ford Auctions Concepts For Charity”

  1. pedro fernandez Says:

    It’s hard to believe GM hasn’t got some younger, product and business savvy exec they could promote up instead of continuing to put geriatric, almost retired, guys who are fed up with the industry. Get some new young blood in there, this company seems to be run by the Century Village crowd. From experience I can tell you, experience is one thing but 60+ is just too old and tired for such a big responsibility.

  2. Chuck Grenci Says:

    While Akerson may not be the ‘piece d’resistance’, I think you’re way off base Pedro by you disregard, dare I say age discriminatory statements above; sixty plus is not automatically old (neither may, say 70+) if the dialogue from said executive rings true.

    I watched the AAH last night and was somewhat impressed with the new technology, but more succinctly, what was being proposed was a gasoline fueled diesel engine. (so of course you could expect a diesel rated economy improvement) What I thought was a little glazed over last night was that with the increased compression ratios required to attain these higher inputs, the engines that these new injection systems will be put in, will need beefed up components to operate. So really, a diesel is a diesel; the same only different. :)

  3. pedro fernandez Says:

    I don’t know how old you are, Chuck, but I’m approaching 60 and I realize I don’t have the same drive and desire to forge ahead and tackle difficult stuff like when I was younger, all I’m saying that after a long line of old GM guys, give some younger exec a chance, with new ideas like “product is everything” look at Ford with Mullaly , he was not a “car” guy, per se. But a young exec with a good track record in the manufacturing industry, not a bean counter. Just too bad they can’t clone Lutz!!

  4. Chuck Grenci Says:

    I’m right there with you (approaching 60); I’m just saying that I wouldn’t arbitrarily pick a younger executive (just to give a young buck a chance); most of these older guys worked their way up and maybe deserve the chance (before that final mortal coil). And your right, Lutz pretty much changes the scale.

  5. Glen Dugan Says:

    I have AT&T cell service here and Have it I only for the iPhone , that does not mean I am happy with them, whitacre may have made them a lot of money, but there is no connection with customer satisfaction, same with GM, and he only did it with 40% fleet sales, with 0% for 60 months or more, they will be in the same place in 3 or 4 years if they can’t work on the customer experience with the vehicle and dealer service or lack thereof Glenn

  6. Kit Gerhart Says:

    With all the shakeups and apparent incompetence in upper management that has plagued GM for years, you have to wonder how they do as well as they do with the product. They have a surprisingly good product lineup, all things considered. All Cadillac needs to have a good lineup is a big “flagship” sedan, while Lincoln has nothing that justifies it’s price. Chevy has very competitive products in Malibu, Equinox, and Traverse. Even Buick has some good products. I hope GM can keep coming up with decent product, in spite of the upper management.

  7. Kit Gerhart Says:

    pedro fernandez Says:
    August 13th, 2010 at 1:17 pm

    “all I’m saying that after a long line of old GM guys, give some younger exec a chance, with new ideas like “product is everything” look at Ford with Mullaly , he was not a “car” guy, per se.”

    Ford seems to be doing ok, but it’s not because of a “product is everything” philosophy. Lincoln is a disaster, and the only Ford that might be considered best-in-class is Mustang, if for no other reason than a convertible being available. Fusion and Taurus are competetive, but Escape and Ranger have been around too long and are worst-in-class, or close to it. Ford needs to take full advantage of the anti-government sentiment that has helped them lately, and get to work on the product.

    Bright spots could be Fiesta and Focus, if gas gets expensive any time soon.

  8. pedro fernandez Says:

    Its no big secret that customer service and satisfaction with ATT wireless is dismal, as good as the Iphone may be, the service is pretty bad from most people I’ve spoken to. but just as people still buy the unreliable, gas-guzzling Land Rovers with their abysmal customer service, they still pay through the nose for those I phones.

  9. pedro fernandez Says:

    According to Jim Hall, on last night’s AAH the next Malibu is going to be smaller, so how do they figure people will pay extra for a Malibu, when the Cruze is nearly the same size?

  10. Salvador G. Says:

    You (old) guys are all wrong.
    Daniel Akerson is not going to head GM for how much of a car guy he is (Or Lack OF) or even because of his age, but rather; how much of a WallStreet guy he is – As JohnMc. reported, Daniel Akerson is well-known in investment-banking circles. Daniel Akerson is being name new CEO to keep Wallstreet happy,… So, even if Daniel Akerson was 30 years of age – he would still be named CEO of GM.

  11. Kit Gerhart Says:

    pedro fernandez Says:
    August 13th, 2010 at 5:39 pm

    “According to Jim Hall, on last night’s AAH the next Malibu is going to be smaller, so how do they figure people will pay extra for a Malibu, when the Cruze is nearly the same size?”

    The Malibu will have a fancier interior than Cruze, will have six cylinder engines available, and will have more available gadgets. Still, I’d think the Malibu would be a hard sell if the price difference is very great for a 4 cyl. Malibu over a similarly equipped Cruze.

    On a related note, I just read that the next Impala will be on the “long” version of the same platform as the Malibu, so it won’t be a whole lot bigger than the Malibu.

    Since I just bought a new Prius, I won’t be in the market for a car for a few years, but none of these would be on my shopping list unless they have a hatchback or wagon, and either a diesel or serious hybrid by the time I’m ready for something new. I’m already spoiled by that 50 mpg I get with the Prius, and I just “drive it,” accelerating with normal traffic flow, and going ~10% over the speed limit most of the time like I always do.

  12. HyundaiSmoke Says:

    They probably are training a younger guy. Remember this was a back move for the IPO. The Younger guy is probably not seasoned yet and will probably take another 5 years to get him ready.

    I do question Mr Ackerson’s motives as Ive said before, he’s part of the same clique that set’s their sights on getting rid of the car. I didnt say He himself wants to get rid of the car but many connecting groups hes been in have members who want to get rid of the car.

    I hope Mr Ackerson does push GM to be a small car champion. When people think of GM they should think of some of the best small cars you can buy. Not Malibus, not Equinoxes, not Regals, not La Crosse, etc… People think foreign mainly for small cars its just that simple.

    GM Has the chance right now, and they MUST act now to make American Small cars the new Japanese small cars in terms of buying consideration.

    Like I said before, the 1.4 Cruze Eco engine needs to be the standard banger in Aveo. The Aveo Eco needs to get 115+ HP and close to 50 MPG.

    The Aveo looks to be a good package, but if I were GM I definately would use the 1.4 Cruze Eco as my standard powertrain to get noticed.

    Aveo RS should be a 1.6 or 1.8 Turbo.

  13. Nick Stevens Says:

    I think it is a waste to kick WISE, EXPERIENCED and EXPERT CEOS at 64. 80 is the new 60, remember? I will be 60 in onlyu a few years, and it is laughable to think of myself as middle aged, let alone old. I swim 1.5 hour every morning from 8:30 to 10 AM, then shower and go to work (a mere 2.5 KM each way!) from 10:30 to 6 PM, then swim again from 6:30 to 8:00 PM, every day, also weekends (except I don’t go to work on Sat and Sun), I am in perfect health and fortunately I have no retirement age limit, and plan to work until I drop dead, or at least 80-85.

    BUT I am GREATLY dissapointed by the god-awful Choice of YET ANOTHER CLUELESS idiot as the CEO of GM, another FINANCIAL guy who does not know diddly squat about Manufacturing, let alone about CUTZTZING EDGE, SUCCESSFUL production as the GREAT MULALLY knew before he saved FOrd’s incompetent a$$!

    It is truly sickening. I am only glad that this clueless clown will only be CEO for 4 years.,..

  14. Nick Stevens Says:

    “The Malibu will have a fancier interior than Cruze, will have six cylinder engines available, and will have more available gadgets”

    With today’s excellent 4s, esp. turbo 4s, that produce TWICE the HP even 6s produced in the 80s and even in the early 90s, it is totally unnecessary to offer 6s for Malibus, only full size cars need them, and even they could do fine with a big turbo 4, with the new CAFE coming up. Hyundai and Buick undestand this. The new, very successful Sonata has no V6 or I6 even as an option, and many Buicks will be offered with 4s and turbo 4s, (Regal, LAcrosse and many more)

  15. Kit Gerhart Says:

    Nick Stevens Says:

    “With today’s excellent 4s, esp. turbo 4s, that produce TWICE the HP even 6s produced in the 80s and even in the early 90s, it is totally unnecessary to offer 6s for Malibus,”

    I agree completely, but there are still people who “think” they need more than four cylinders, no matter how well today’s fours work.

  16. pedro fernandez Says:

    Motorweek tested the new Fiesta and lamented that it lacked passing power on the expressway. perhaps weight to power ratio is a better indication than just HP and torque.

  17. HyundaiSmoke Says:

    Really Pedro, wow!!!

    Yeah, if you dont have 140 HP anymore with the big cars around pumping tons of pony testers will not notice.

    It either has to be 140 HP, or really small like a MINI with 120 HP to get noticed.

    GM like I said, use the 1.4 Cruze Eco as the standard Aveo powertrain. It will be great publicity too.

  18. pedro fernandez Says:

    I noticed when I recently drove a Cobalt that it was sluggish off the line and felt like a much heavier car, the HP was 155 with a curb weight of almost 2800 lbs. 500lbs more than my Corolla but also more HP and torque, but yet it felt slower in city traffic, so go figure.

  19. Kit Gerhart Says:

    H/S Says:

    “It either has to be 140 HP, or really small like a MINI with 120 HP to get noticed.”

    A Fiesta weighs only about 100 pounds more than a Mini, so it should perform close to a base Mini with its 120 hp. The Fiesta might actually do slightly better than the Mini if both are automatics, since the Fiesta has a DSG and the Mini has a torque converter auto box.

    It sounds like Motorweek’s testers have different definitions of adequate passing power than I do. To me, my base Mini and Prius both have more than adequate power. Even my ’86 VW Cabriolet has adequate passing power, and it is slower than about any car now sold in the US.

  20. HyundaiSmoke Says:

    Kit it could also be Motorweek’s attempt to goat Ford into having a ton of power in Fiesta. I bet some of the writers there are quite pissed off about the Koreans with Direct Injection.