GM expected to dismiss multiple employees as internal probe is released

General Motors plans to announce that it is dismissing multiple employees, including engineers, members of its legal staff and at least one vice president, in connection with their roles in a deadly recall that was delayed for years after ignition switches were known to be faulty, a person familiar with the company's plans said today.

Those being let go are expected to include Ray DeGiorgio, the engineer who was in charge of the ignition switch and violated GM protocol by keeping the same part number in 2006 when he approved modifications that fixed the defect without informing regulators or the public, the person said.

At least two published reports today also said GM is planning the terminations. A GM spokesman declined comment.

GM also plans to terminate Gary Altman, the former program engineering manager of the Chevrolet Cobalt who, along with DeGiorgio, has been suspended with pay since April 10, said another the person familiar with GM's plans.

Neither DeGiorgio nor Altman have commented publicly on their situations.

GM CEO Mary Barra has scheduled a town hall meeting with employees at 9 a.m. to share findings from an internal investigation into why GM waited so long to recall 2.6 million Cobalts, Saturn Ions and other cars whose airbags could fail in a crash if the ignition slips out of “run” mode. She will address reporters and Wall Street analysts during subsequent events.

The investigation was conducted by former U.S. Attorney Anton Valukas, who also issued the official report on the collapse of the Lehman Brothers investment bank. GM’s general counsel, Mike Millikin, who helped lead the investigation, is expected to be absolved of wrongdoing and stay with the automaker but other members of the legal department are among “a number of people” being fired,The Wall Street Journal reported, citing unidentified sources.

The report will show that there was no conspiracy to cover up the matter and that Barra, everyone who reports directly to Barra, GM’s board and former CEO Dan Akerson all had no knowledge of the defect before December, the Journal said. The issue first reached the top GM committee that voted on whether to issue recalls in mid-December, about a week after Barra was selected to succeed Akerson.

New board committee

GM’s board is expected to form an operational risk-management committee to better monitor potential risks, the newspaper said. It said the report concludes that GM managers did not connect problems with the switches to the potential for fatal crashes.

GM says it has linked 13 deaths and 47 crashes to the defective switches. Lawyers and safety advocates contend that the death and injury toll is far higher.

At least one vice president and a senior lawyer will be among those leaving GM, The Detroit Newsreported. The newspaper described the report as “painful,” according to people who have seen it, and said GM would turn it over early today to the National Highway Traffic Safety Administration, which would in turn make it public later in the day.

GM in May admitted breaking federal law and agreed to pay a $35 million fine levied by NHTSA. It also has to meet with NHTSA officials monthly to discuss potential safety issues and implementation of the changes recommended by Valukas’ report.

Bob Lutz, the former GM vice chairman who headed product development, said last night during a dinner event at Eastern Michigan University that high turnover and lack of communication in the company caused the faulty ignition switches to go unnoticed.

Lutz said each department in the company knew small aspects of the problem, but employees never came together to look at the big picture.

Vauxhall/Opel plans 27 new models and 17 new engines by 2018.

• Market share in Europe to increase to 8 percent by 2022
• EBIT margin of 5 percent targeted
• 27 new models and 17 new engines by 2018

Opel has presented an update of its DRIVE!2022 strategy. The company has set itself five strategic objectives. By 2022, Opel and Vauxhall are aiming for 8 percent market share in Europe, with the focus on profitable growth. The profit margin (earnings before interest and taxes – EBIT) is targeted to reach 5 percent. At the same time, the company plans to further enhance the quality of its products as well as the satisfaction of its customers and employees.

Opel CEO Dr. Karl-Thomas Neumann: “In the past months Opel’s management team has worked hard on advancing the DRIVE!2022 initiative. The catalogue of strategic targets presented here today is the result of our efforts. We have already made the preparations for implementing the plan step by step. We have the full backing of our parent company General Motors.”

Opel is focusing on three strategic priorities: models, brands and an improved market penetration. The model and engine offensive is continuing at a fast pace. A total of 27 new models and 17 engines are planned for the years 2014 through 2018.

The second strategic priority is the strengthening of Opel’s image as an emotional, approachable and German brand. The values are brought across by such factors as technical innovations, German engineering skills, and good value for money. Technical innovations, for instance, are exemplified by OnStar, the next stage of vehicle connectivity that will turn the automobile into a Wi-Fi hotspot starting in 2015.

Market share and growth targets represent the third priority. By 2022, Opel plans to increase its market share in Germany from 7.2 to 10 percent. In Europe (including Russia and Turkey), the company aims to raise its market share from a current 5.8 to 8 percent. By 2022, Opel plans to become the number two in the European passenger car market together with its British sister brand Vauxhall.

Opel announced the DRIVE!2022 ten-year plan for the first time in summer 2012. In 2013, the company had already made substantial operational progress, cutting its losses in Europe by more than half. Opel expects 2014 to be a challenging year. On the one hand, the company continues to improve its operational business. On the other hand, non-recurring costs such as the closure of the plant in Bochum and volatile currencies will put pressure on earnings. Opel plans to return to profitability by mid-decade thanks to a number of measures, including lower product and structural costs, improved capacity utilization of plants, higher sales revenues and the improved brand profile.

USA - GM recalls 2013 Cadillac SRX on lagging acceleration issue

General Motors Co. is recalling about 56,400 model year 2013 Cadillac SRX crossover vehicles because of possible delays in acceleration linked to a computer program that controls the transmission, U.S. regulators said today. 

"In certain driving situations, there may be a three to four second lag in acceleration due to the transmission control module programming," said a report from the National Highway Traffic Safety Administration. 

NHTSA said the condition can increase the chances of a crash, but GM said it was not aware of any crashes related to this issue.

GM said that 50,591 of the recalled SRX crossovers are in the United States, 3,306 in Canada, 367 in Mexico and 2,123 in other markets. 

The affected vehicles have 3.6-liter engines. Consumers are asked to bring their cars to GM dealerships to have the transmission control modules reprogrammed.

The affected Cadillac SRX crossovers were produced from May 29, 2012 to June 26, 2013

REPORT HERE

Opel will focus on crossovers to boost sales and return to profit, CEO says

Opel will focus on crossovers as part of its product push to boost sales and return to profit. "We will move more into crossover segments in general, because that’s where customers are going," Opel CEO Karl-Thomas Neumann said on the sidelines of the Geneva auto show last month.

He declined to comment on reports that Opel plans to add a large crossover as a flagship model. The flagship will go into production in 2017 and start at 26,000 euros, slightly more than the Insignia mid-sized sedan, according to German magazine AutoBild.

The replacements for the Meriva and Zafira minivans, both due in 2016, will both be styled as crossovers, Neumann said. Opel is developing the minivans with PSA/Peugeot-Citroen. They will be built on PSA platforms and use PSA engines.

Joint development and production will give Opel the scale needed to build the models profitably, Neumann said.

“All of our big-selling cars, the Corsa, Astra, Insignia and Mokka, sit on high-volume global platforms from General Motors. The only two I could not put on such global platforms were minivans,” Neumann said. The new Zafira will be built at PSA’s plant in Sochaux, France, while the Meriva replacement will be produced at Opel’s factory in Zaragoza, Spain. Sales of the two models are flagging as buyers increasingly switch to SUVs and crossovers.

Zafira sales in Europe fell 11 percent to 85,386 last year, according to market researchers JATO Dynamics. Meriva sales were down 27 percent to 56,936.

Corsa ‘mistake’

Neumann said that an early plan to also develop a replacement for the Corsa subcompact with PSA had been a mistake. The next-generation Corsa will use a Chevrolet platform, he said. “If I have a GM platform I would rather use that because then I can use all our engines and our technology,” he said.

GM abandoned plans to build the next Corsa subcompact on PSA’s platform that underpins the Peugeot 208 and the next Citroen C3. Media reports have said that the Corsa, due in late 2018, will share a platform with the Chevrolet Sonic/Aveo, Buick Encore and Opel Mokka models.

New investments

Opel is launching 23 new or redesigned models and 13 new engines as part of its Drive 2022 to turnaround the brand. Last year, GM lost $844 million in Europe, down from $1.94 billion in 2012. GM aims to return to profit in Europe by 2016. A new version of Opel’s No. 2 seller, the Astra compact, will launch in late 2015. The Astra will remain on a GM global platform, as was always planned.

The brand’s flagship, the Insignia, will be replaced in 2016, underpinned by a GM global platform shared by models such as the Buick Regal and LaCrosse sold in the United States and China. Opel and PSA originally planned to co-develop the new generations of the Insignia and Peugeot 508.

It is unclear whether the Opel Antara compact SUV, a sibling to the Chevrolet Captiva built by GM Daewoo in Korea, will have a successor model.

REPORT HERE

USA - 2014 Chevrolet Corvette Price Increases Due to High Demand.

It seemed almost too good to be true: the all-new, 455-horsepower, sexier than ever Corvette was made available for $51,000. Well, the dream is beginning to fade. Now it appears Chevrolet is raising prices on the coupe and convertible Corvettes by $2,000, according to recent reports.

The base 2014 Chevrolet Corvette now starts at $53,000. Adding the Z51 Performance Package brings costs to $57,000, or $1,200 more than it was before the price hike. The convertible Corvette now begins at $58,000, and with the Z51, it costs $62,000.

According to CorvetteBlogger.com, the prices went into effect this week. The website, quoting Chevrolet, said that the price hike is due to customer demand that "has exceeded expectations."

The Corvette is equipped with a 6.2-liter V8 engine that produces over 455 horsepower. It is capable of reaching 60 mph from a standstill in around 4 seconds. Key features include keyless ignition and entry, leather upholstery, and an 8-inch touchscreen.

We drove the Z51 coupe last year, and loved it. Despite the price hikes, we think the new Corvette is still an incredible bargain. And considering that buyers have faced price markups at the dealership since the new Corvette was introduced, we don't think this is coming as a huge shocker.

REPORT HERE

USA - RECALL - GM announces over 660,000 cars to correct cars being unintentionally turned off.

General Motors said today it is recalling 778,562 older-model Chevrolet Cobalt and Pontiac G5 compact cars in North America to correct a condition that may allow the engine and other components, including airbags, to be unintentionally turned off.

In the affected cars from model years 2005 through 2007, the weight on the key ring, road conditions or some other jarring event may cause the ignition switch to move out of the run position, turning off the engine and most of the car's electrical components, GM said in a statement.

GM was aware of five frontal-impact crashes and six front-seat fatalities in crashes where the front airbags did not deploy, a company spokesman said. All of the crashes occurred off road and at high speeds, where the probability of serious or fatal injuries was high regardless of airbag deployment, the spokesman said.

Failure to wear seat belts and alcohol use also were factors in some cases, the spokesman said.

GM was also aware of 17 other crashes involving some type of frontal impact and nonfatal injuries where airbags did not deploy, the spokesman said.

Dealers will replace the ignition switch at no charge, but GM advised that until the fix is made, customers should remove non-essential items from their key rings.

The U.S. automaker said the ignition switch torque performance may not meet company specification. The involved parts are made in Mexico, according to documents filed with the U.S. National Highway Traffic Safety Administration.

Of the affected cars, 619,122 are in the United States, 153,310 are in Canada and 6,130 are in Mexico, the company spokesman said.

The cars in the recall are the Cobalt from model years 2005 through 2007, and the 2007 G5.

GM no longer makes either car.

REPORT HERE