The Auto Writer

Fritz Henderson firing on eve of show stuns automotive world

Today is one of those days I know will be filled with more press information than I can possibly manage. Yesterday afternoon I waded through much of the US sales data for November 2009 while on this day I’ll be fixated on the L.A. Auto Show from across the country and all of the related product releases.

Unfortunately, I’m not able to get to California for this year’s show, but I’ll be able to keep up with most of the events in real time, sharing highlights with you here over the next few days. Though I enjoy being present at the top shows, that block of time away from my home office means I’m always scrambling to get everything else done at night and on weekends. Quite frankly, it is too close to Christmas for me to attempt to do it all!

Fritz Leaves

One monkey wrench thrown in the middle of everything was the firing of Fritz Henderson on the eve of the show. Fritz, who took over from Rick Wagoner earlier this year, has been on a hot seat ever since he was installed as CEO. Trouble has been brewing all along, but it was the reversal of the Opel sale by GM’s board (against Fritz’ advice) that signaled something was amiss. The Saturn deal collapse and continued lackluster sales even as Ford and others are rebounding meant that the board needed to dump Henderson.

Oddly, the move was made just as all eyes were beginning to focus on the show including GM’s own new product introductions. What’s more, Henderson was scheduled to give the keynote address for the Motor Press Guild (MPG) breakfast this morning — instead, long time GM mouthpiece Bob Lutz will take his place.

Let’s see what kind of speech has been cobbled together for Lutz to present with just 24 hours notice. One or more speech writers is coming off of an all-nighter this morning!

November Sales

The final sales US sales data for November 2009 is in and it offers some stark contrasts as well as noticeable middle ground. Several automakers had strong months – Nissan (+20.8%), Volkswagen (+8.7%), Hyundai (+45.9%), Kia (+18.3%), Daimler +9.2%), Subaru (+23.9%), Jaguar/Land Rover (+20.5%), and Porsche (+18%) – while a number of brands continued to wallow in the swamp – Chrysler (-25.5%), Mitsubishi (-42.6%), and Suzuki (-52.1%).

The great middle ground includes automakers whose sales were roughly flat which isn’t good news considering how terrible November 2008 sales were. Ford barely edged up (0.1%) while GM fell by 1.8%. Toyota +2.6%, Mazda +0.9%, and BMW -7.6% were among those caught in the middle, though BMW’s sale were disappointing considering Daimler made some strong gains thanks to the release of its all-new E-Class model.

Ford v. GM

The difference between Ford and GM appears to be negligible until you discover that GM had to use deep discounts and other incentives to bolster sales while Ford did not. Discounts eat into profits and extend losses.

Everyone, and I mean every auto manufacturer is looking at what the Korean brands are doing – Hyundai and Kia – and they know that the bad economy no longer offers them an excuse for lackluster sales. If someone, anyone, can sell cars in this market, then everyone else should too.

But, Hyundai and Kia have been showing everyone that well contented, competitively priced, good quality vehicles are what sells, something many automakers simply don’t have or are in short supply. GM was going to boot Fritz anyway, but with Hyundai gobbling up more of the market, Ford selling cars without deep discounts, and GM not being able to rebound faster has to irk certain government appointed board members as well as a vulnerable political party in Washington, DC.

Yes, politics is at play here make no mistake about it. As much as the Obama administration publicly denies influencing how GM runs its operation there is a matter of some $50-60 billion in taxpayer aid that needs to be paid back. That money cannot be returned until GM goes public with its stock shares again, something that won’t happen if the automaker continues to stumble.

It’s Showtime!

GM drama aside, today’s events in Los Angeles are worth watching. I’m planning on doing that and will share my findings with you here over the coming days.

Source: Autodata Corp.