"New" GM Has Busy First Week
By Michelle Krebs July 17, 2009By Michelle Krebs
DETROIT - The "new" General Motors, which emerged from bankruptcy just last Friday, had a busy first week
The automaker announced a series of executive retirements, departures and re-assignments, likely the first of many as it sheds about a third of its executive ranks. The top three executives, it was revealed in government filings, will retain their previous pay. Unretired executive Bob Lutz had his first misstep in the communications role he now heads. And the automaker got back to the business of building, promoting and selling vehicles
Executive Compensation
In its first filings as the new GM with the Securities and Exchange Commission, GM revealed its top three executives will continue at the pay level they were at the old GM. The government, which is financing GM, restricts pay.
CEO Fritz Henderson will be paid $1.26 million, about 27 percent less than he earned in 2008;
Chief Financial Officer Ray Young will be paid $720,000, about 15 percent less than he earned in 2008;
Controller Nicholas Cyprus will be paid $522,000, about 8 percent less than he earned in 2008.
The automaker did not disclose what other executives, notably the returning Lutz, would be paid.
The filing did say GM's new board members will receive a base retainer of $200,000, plus, if applicable, $10,000 for service as a chair of any board committee, $20,000 for service on the audit committee, and $150,000 as board chairman, a position held by former AT&T executive Ed Whitacre. That's about the same as board members of the old GM made.
GM is in the process of replacing its board with eight of the 13 members identified. The rest will be named by early August, Henderson said.
GM also announced it was indefinitely postponing its annual stockholders meeting, which had been set for early August.
Shuffling The Deck
Two longtime GM employees announced they would retire. They are Larry Burns, vice president of research and development and strategic planning, and Steve Harris, vice president, communications, who retired and was lured back by then CEO Rick Wagoner.
Burns will be succeed by Alan Taub, who oversaw GM's science labs. His new post as head of research and development will be pulled into the new GM's product development organization, addressing a long-held complaint that research and development in the lab too seldom finds its way to the commercial side.
Harris will be replaced by Chris Preuss, who most recently headed GM's European communications staff.
GM also named Associate General Counsel Michael Milliken to general counsel, replacing Bob Osborne, who is returning to private practice.
Lutz's About-Face
Lutz, who had announced his retirement but will stay on to head communications and marketing as well as product development, had a high-profile miscommunication - either planned or not - during new GM's first week.
On the Friday of GM emerging-from-bankruptcy activities, Lutz told media outlets that the automaker would keep the rear-drive Australian-built Pontiac G8 sedan and sell it as a Chevrolet Caprice. But no sooner had he said that, GM had to start back-pedaling, saying the possibility was being considered. By Thursday, Lutz was saying on GM's Fast Lane blog that the idea had been considered and rejected because the automaker could not make a business case for it.
Return to Basics: Building, Selling Cars
On the bright side, GM got back to the car business in its first week.
The new GM kicked off its first week with the press introduction of one of its newest products, the Buick LaCrosse, an event that garnered a lot more attention that it might have because of the circumstances. Buick is hoping the LaCrosse will attract younger buyers - the 40 to 59 crowd versus Buick's average 70 year old - who might otherwise buy a Lexus ES 350 or Acura TL.
But not all the product news from GM was rosy. GM confirmed this week on its Camaro-enthusiast Web site that the company is suspending shipments of V8-powered Camaro SS with manual transmissions while engineers investigate quality issues.
While a deal appears imminent for Opel in Europe, the new GM announced its Brazilian subsidiary was in talks with two government banks for long-term loans to complete its planned three-year, $2.5-billion investment plan. The investment is aimed at developing two compact and midsized vehicles, redesign 18 Chevrolet models and revamp assembly lines.
GM also appears close to announcing where it will build an assembly plant for battery packs for the Chevrolet Volt and other such electrified vehicles in the future. The Detroit Free Press reports it will be built just south of Detroit in order to supply the plant in Detroit that will make the Volt. GM is expected to invest $40 million in the plant, likely with significant government help, and employ 100 people.
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