GM CEO Henderson on Dealers, Clunkers, Exec Compensation and More
June 16, 2009

By Bill Visnic

In a wide-ranging and comparatively wide-open web chat with the automotive media on Tuesday, General Motors Corp. CEO Fritz Henderson confirmed GM has rescinded the decision to close at least a few dealers, is committed to further cutting its executive ranks and believes it will benefit - to a degree - from the still-debated "cash-for-clunkers" legislation.

Henderson took on several questions about the contentious decision to deny franchise renewal to some 1,100 dealers by the end of next year. He said that of the reported excess of 800 dealer requests for review of their franchise termination, GM has relented on 49 and will be done with the review process this week.

He also said GM will not make public the final list of non-renewed dealers.

"In general, our dealers have requested that we not publish a list. We have shared information with the Congress as requested, but have done so in a way that respects the confidentiality of our dealers.

Exec Pay Limited, Fewer Execs Anyway

Henderson said GM will be one of the seven firms subject to executive-compensation oversight by the U.S. Treasury's new "pay czar," Ken Feinberg, "the government's paymaster for firms receiving special support under the TARP (Troubled Assets Relief Program)."

He also said that GM is sticking with a target from an earlier restructuring template to cut a further 35 percent of its executive workforce and 20 percent "in salaried manpower" by the end of this year.

Clunker Bill A Modest Booster

GM's CEO said if and when the U.S. Congress passes a version of the now much-debated cash-for-clunkers legislation that would pay consumers up to $4,500 to trade a high-consumption vehicle for a new car, the industry, currently running at an annual pace set to marginally exceed 10 million light-vehicle sales this year, could benefit slightly but meaningfully.

"Our best estimate would be a 10-percent lift in retail sales based on the program under consideration today," Henderson said, adding that in Germany, GM's Opel has benefited from that country's clunker program. He said GM "would expect to participate proportionally" to the company's market share for a U.S. cash-for-clunkers program.

Saab's Next Chapter

Many asked about the unfolding saga of Saab, and Henderson confirmed that GM and new Sweden-based owner Koenigsegg are likely to be close partners as Saab transitions to its new owners but remains reliant on vehicles, including two imminent new models, that are based on GM engineering.

For one, Henderson confirmed the likelihood that GM will build the all-new 9-4X crossover vehicle for Saab. The 9-4X uses a derivation of GM's global midsize-crossover (Theta) architecture, of which GM will offer three branded variants: the 2010 Chevrolet Equinox, GMC Terrain and Cadillac SRX, all built at GM's Ramos Arizpe, Mexico, assembly plant.

"Based on the preliminary plan," Henderson said, "we would expect the buyer (Koenigsegg) to ask GM to build the 9-4X for the Saab brand. We will also provide support in terms of powertrain and other technologies."

Asked to enumerate how much Saab has lost over the nearly two decades of GM ownership, Henderson wouldn't bite, but said Saab had been "consistently unprofitable since our acquisition - myriad reasons for this, but the brand has outstanding appeal, incredibly loyal customers and dealers and we ran out of money just on the eve of launching the newest generation of Saabs, which we think will be outstanding."

Henderson wouldn't speculate on when - or if - a Koenigsegg-owned Saab might become profitable, saying only, "We look forward to working with Koenigsegg to make them successful and we look forward to supplying the buyer with selected products and technology to give them a chance to be successful."

GM CEO Webchat Tidbits

- Don't look for the Australia-sourced Pontiac G8 - already a minor cult favorite for its performance-per-dollar value - to continue on as a rebadged car for any of the Chevrolet, Buick, Cadillac or GMC brands that will comprise the "new" GM. "I'm not a fan of rebadging," Henderson said.

- He thinks, however, GM can "continue to differentiate" the GMC brand in a meaningful fashion compared with its typical Chevrolet donor vehicles. Henderson points to the differences in the 2010 GMC Terrain and Chevrolet Equinox compact crossovers.

- Reacting to a question about mounting criticism the amount state-sponsored incentives will ultimately decide which of three existing U.S. assembly plants will win the business of building next-generation GM compact cars:

"We have outlined 12 specific criteria that will drive our decision, not just one."

Henderson previously said GM will decide by the end of the month which of the three plants will build the new small cars.

 - On whether slumping worldwide and U.S. auto sales have bottomed:

"We are seeing stability, albeit at anemic levels. Still, better to not be falling and the levels we are seeing are generally consistent with the assumptions of our (restructuring) plan."

Photos by GM

1 - GM CEO Fritz Henderson

2 - Saab 9-4X

3 - Pontiac G8

4 - Chevrolet Equinox

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