• Sign in to follow this  
    Followers 0

    GM's Top Lawyer, Delphi Exec Get Grilled By Senate


    • The Senate Grills GM's Top Lawyer and Delphi CEO

    Another day, another senate hearing into the General Motors ignition switch recall. Today, two new people were grilled by the committee about their knowledge in this mess.

    First up was Michael Millikin, GM's General Counsel. Millikin testified that he didn't know about the issue till February of this year. He also testified that lawyers working for GM during April 2013 had information pertaining to this from a case they were working on. However, they failed to notify engineers about the problem.

    "That was tragic. If they had brought it to my attention at that time, I certainly would have made sure that they had done something," Millikin said.

    Lower-level lawyers were among those fifteen people who let go a couple months ago.

    However, many of the senators were wondering why Millikin was still employed with the company.

    "I do not understand how the General Counsel for a litigation department that had this massive failure of responsibility, how he would be allowed to continue in that important leadership role in this company," said Senator Claire McCaskill, chairwoman of the Senate Commerce subcommittee.

    The senators said Millikin should be held responsible for the actions of the lower-level lawyers.

    “My view is the team has to change,” said Senator Richard Blumenthal.

    Millikin testified that the company has brought in an outside law firm to review the litigation department.

    Also testifying today was Delphi CEO Rodney O'Neal. Delphi was the company who manufactured the switches and was being called in to explain their role in the recall. O'Neal testified that the company followed the specifications given by GM when making the switch. That included the low resistance turn because GM wanted it to turn smoothly.

    "GM knowingly approved a final design that included less torque than the original target. In our view, that approval established the final specification," said O'Neal.

    GM CEO Mary Barra who was at the hearing said that it was GM's fault for the design of the part, not Delphi.

    Source: Reuters, The Detroit News, (2)

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.com or you can follow him on twitter at @realmudmonster.

    0


    Sign in to follow this  
    Followers 0


    User Feedback


    About time Delphi was grilled on this and NO I do not buy it was just GM's fault. Delphi knew this was not good and should have built the part to the original spec not a lower spec. Also my gut tells me Delphi probably came back to GM and said you could build it at this lower spec and it would save X amount per part equaling millions that can go to executive bonuses for saving money.

    0

    Share this comment


    Link to comment
    Share on other sites

    About time Delphi was grilled on this and NO I do not buy it was just GM's fault. Delphi knew this was not good and should have built the part to the original spec not a lower spec. Also my gut tells me Delphi probably came back to GM and said you could build it at this lower spec and it would save X amount per part equaling millions that can go to executive bonuses for saving money.

     

    I would disagree with that latter part. Especially when you consider this story from The Detroit News in April - Bad blood cited between GM, ignition switch supplier Delphi

     

    A couple of key quotes: 

     

     

    At the same time, GM was looking for ways to cut costs to cover an ever-widening cost gap with its foreign competitors. Squeezing suppliers for pricing concessions was a lot easier than addressing its own inefficiencies and uncompetitive business model.

     

    “They had Delphi over a barrel and they knew it. GM just went after them and put on all sorts of pressure to reduce costs,” said John Henke, president of Planning Perspectives Inc., which tracks relations between automakers and their suppliers. “The two companies hated each other. If you were a Delphi engineer and you worked with GM, you didn’t want to get out of bed in the morning.”

     

    Henke and other analysts believe the caustic relationship between General Motors and Delphi led to substandard parts being shipped by the supplier. And they say the dysfunctional state of Detroit’s automobile industry in the years leading up to its near-death experience in 2008 and 2009 helps explain why GM would have accepted them and installed them on its vehicles. 

     

     

    Henke has been asking suppliers to rate their relations with automakers since 1992. From 2002 to 2007, GM was consistently rated the worst company to do business with in his annual survey.

     
    “Relations with GM were definitely the most contentious,” he said. “They were so cost-oriented; price took precedence over quality. Suppliers were threatened with loss of business if they didn’t reduce the cost of their components. They had to be incredibly creative to meet GM targets.”

     

     

    Competing with other suppliers for business was often a brutal process at GM, according to Henke, who says the automaker routinely summoned parts manufacturers to its headquarters, put the representatives of each company in a different room and then asked them to name their lowest price for a given component. The GM purchasing reps would then take the lowest figure and challenge the other companies to beat it. And they would keep doing that until none of the suppliers was willing to go any lower.

     
    That sometimes resulted in suppliers bidding so low that they had to cut corners to meet the promised price. And that, says Henke, is one reason why GM ended up receiving parts that did not meet its own specifications, as the company now says happened with the ignition switches from Delphi. And he said GM was willing to accept those parts because the alternative — delaying production — was too costly.

     

    Should Delphi get some of the blame? Sure. But all roads lead back to GM.

    0

    Share this comment


    Link to comment
    Share on other sites

    Very interesting to read this. This information is what the news needs to be sharing about the problems in the culture of the company and how bean counters and lawyers tend to affect and play games with peoples life all over a few cents.

     

    Did they ever look at their own stupidty for over paying assembly line labor, over paying executives and the wasteful bonuses plus not having cleaned up their own product lines. It was hard on this country but the near death was a good thing I think in forcing the company to clean up its act. Hopefully this will force them to continue to do the right thing and get better.

    0

    Share this comment


    Link to comment
    Share on other sites


    Your content will need to be approved by a moderator

    Guest
    You are commenting as a guest. If you have an account, please sign in.
    Add a comment...

    ×   You have pasted content with formatting.   Remove formatting

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor




  • Popular Stories

  • Today's Birthdays

    1. 2005 EquinoxLS
      2005 EquinoxLS
      (41 years old)
    2. Shaula
      Shaula
      (36 years old)
  • Similar Content

    • By William Maley
      Every Chevrolet Bolt that will be rolling off the assembly line will lose General Motors close to $9,000 once they are sold. This seems like madness, but according to a report from Bloomberg, there is some method to it. 
      Thanks to new regulations done by California Air Resources Board, automakers have to sell a certain amount of zero-emission vehicles if they want to sell other vehicles - primarily crossovers, SUVs, and trucks - in the state. These new regulations say by 2025, zero-emission vehicles need to make up 15.4 percent of the market. Since then, nine other states including New York have adopted these regulations. All told, these ten states make up 30 percent of the total U.S. auto market.
      Take for example Fiat Chrysler Automobiles. CEO Sergio Marchionne revealed a couple years back they take a hit of $14,000 on every Fiat 500e sold. But if they wanted to sell Ram pickups and Jeep SUVs in California, they need to take the hit.
      How does Bloomberg get the $9,000 figure? That's due to a source at General Motors who revealed the estimate is based on the Bolt's $37,500 base price. A GM spokesman declined to comment.
      If General Motors is able to sell enough Bolts, they'll be able to gather enough credits to not only sell other vehicles which will make up for the Bolt's loss, but also be able to sell extra credits to other automakers. Tesla has taken advantage of this to great effect. In the third quarter, Tesla made $139 million from selling credits.  
      Source: Bloomberg
       
       
       

      View full article
    • By William Maley
      Every Chevrolet Bolt that will be rolling off the assembly line will lose General Motors close to $9,000 once they are sold. This seems like madness, but according to a report from Bloomberg, there is some method to it. 
      Thanks to new regulations done by California Air Resources Board, automakers have to sell a certain amount of zero-emission vehicles if they want to sell other vehicles - primarily crossovers, SUVs, and trucks - in the state. These new regulations say by 2025, zero-emission vehicles need to make up 15.4 percent of the market. Since then, nine other states including New York have adopted these regulations. All told, these ten states make up 30 percent of the total U.S. auto market.
      Take for example Fiat Chrysler Automobiles. CEO Sergio Marchionne revealed a couple years back they take a hit of $14,000 on every Fiat 500e sold. But if they wanted to sell Ram pickups and Jeep SUVs in California, they need to take the hit.
      How does Bloomberg get the $9,000 figure? That's due to a source at General Motors who revealed the estimate is based on the Bolt's $37,500 base price. A GM spokesman declined to comment.
      If General Motors is able to sell enough Bolts, they'll be able to gather enough credits to not only sell other vehicles which will make up for the Bolt's loss, but also be able to sell extra credits to other automakers. Tesla has taken advantage of this to great effect. In the third quarter, Tesla made $139 million from selling credits.  
      Source: Bloomberg
       
       
       
    • By William Maley
      As sales of compacts and sport cars begin declining, automakers are faced with tough decisions as to what in terms of production and workers. General Motors made the difficult decision to lay off 2,000 workers at two plants.
      Bloomberg reports that GM will be cutting the third shift at their Lansing Grand River plant in Michigan (home to Cadillac ATS, CTS, and Chevrolet Camaro) and a shift at Lordstown, Ohio plant (home to the Chevrolet Cruze). GM spokesman Tom Wickham said the company is treating the layoffs as permanent, although some workers will be able to transfer to other plants.
      The layoffs are due to sales of compact and sports cars going down due to consumers buying more crossovers. Sales of the Chevrolet Cruze dropped 20 percent through October, while the Camaro has seen a drop of 9 percent.
      On the same day, General Motors announced a $900 million investment for three plants - Toledo Transmission Operations, Bedford Casting Operations in Indiana, and Lansing Grand River. Wickham said this investment would not add any new jobs.
      Source: Bloomberg, General Motors
      Press Release is on Page 2


      General Motors today announced initiatives to strengthen and align its production output at key U.S. manufacturing operations. The plans include investing more than $900 million in three facilities — Toledo Transmission Operations in Ohio, Lansing Grand River in Michigan and Bedford Casting Operations in Indiana —  to prepare the facilities for future product programs.
      GM also announced plans to align production output with demand for cars built at the Lordstown, Ohio, and Lansing Grand River, Michigan, assembly plants. As the customer shift from cars to crossovers and trucks is projected to continue, GM will suspend the third shift of production at both facilities in the first quarter of 2017. 
    • By William Maley
      As sales of compacts and sport cars begin declining, automakers are faced with tough decisions as to what in terms of production and workers. General Motors made the difficult decision to lay off 2,000 workers at two plants.
      Bloomberg reports that GM will be cutting the third shift at their Lansing Grand River plant in Michigan (home to Cadillac ATS, CTS, and Chevrolet Camaro) and a shift at Lordstown, Ohio plant (home to the Chevrolet Cruze). GM spokesman Tom Wickham said the company is treating the layoffs as permanent, although some workers will be able to transfer to other plants.
      The layoffs are due to sales of compact and sports cars going down due to consumers buying more crossovers. Sales of the Chevrolet Cruze dropped 20 percent through October, while the Camaro has seen a drop of 9 percent.
      On the same day, General Motors announced a $900 million investment for three plants - Toledo Transmission Operations, Bedford Casting Operations in Indiana, and Lansing Grand River. Wickham said this investment would not add any new jobs.
      Source: Bloomberg, General Motors
      Press Release is on Page 2


      General Motors today announced initiatives to strengthen and align its production output at key U.S. manufacturing operations. The plans include investing more than $900 million in three facilities — Toledo Transmission Operations in Ohio, Lansing Grand River in Michigan and Bedford Casting Operations in Indiana —  to prepare the facilities for future product programs.
      GM also announced plans to align production output with demand for cars built at the Lordstown, Ohio, and Lansing Grand River, Michigan, assembly plants. As the customer shift from cars to crossovers and trucks is projected to continue, GM will suspend the third shift of production at both facilities in the first quarter of 2017. 

      View full article
    • By William Maley
      Chevrolet and Buick Post Big Retail Sales and Share Gains Keeping GM the Fastest-Growing Full-line Automaker
      Chevrolet U.S. retail sales up 6 percent for best October since 2004 Buick U.S. retail sales up 7 percent for best October since 2003 GMC sets brand’s all-time record for October ATP at $43,988 DETROIT – General Motors (NYSE: GM) sold 208,290 vehicles in October to individual or “retail” customers in the U.S., up 3 percent from last year, despite two fewer selling days. Based on initial estimates, GM outperformed the entire U.S. retail industry by a wide margin.
      Led by Chevrolet and Buick, GM’s U.S. retail market share rose to its highest October level since 2009. Based on initial estimates, GM’s retail market share jumped 1.6 percentage points in October to 18.1 percent, the largest retail market share gain of any manufacturer. GM has gained retail market share in 16 of the past 19 months.
      Chevrolet’s October U.S. retail sales were up 6 percent compared to last year, the brand’s best October since 2004. Buick’s October U.S. retail sales were up 7 percent, the brand’s best October since 2003.
      Chevrolet gained 1.4 percentage points of U.S. retail market share in October to 12.3 percent.  Chevrolet has gained U.S. retail market share in 9 out of 10 months this year, and remains the industry’s fastest-growing full-line brand.  Buick gained 0.2 percentage points of retail market share in October.
      In addition, GMC set an all-time October record for the brand’s ATP or Average Transaction Price of $43,988, up more than $1,800 over last October’s performance. 
      GM’s total U.S. sales in October were 258,626 vehicles, down less than 2 percent from last year. In addition, GM’s daily rental sales were down approximately 8,000 vehicles or about 19 percent in October compared to last year, as planned.
      “GM’s October performance reflects the strength of our retail business and our operating discipline. We gained profitable retail share in October while spending less than the industry average on incentives and commanding the industry’s best average transaction prices for any full-line automaker,” said Kurt McNeil, GM’s vice president of U.S. sales operations. “We will continue our disciplined approach and focus on retail in a strong industry.” 
      In October, GM’s incentive spending as a percent of ATP was 11.7 percent, below the industry average of 11.8 percent.
      GM’s ATPs, which reflect retail transaction prices after sales incentives, were $36,155 in October, more than $4,650 above the industry average and more than $1,000 above last October’s performance. 

      Through the first ten months of the year, GM retail sales are up 1 percent, compared to last year. GM has gained 0.6 percentage points of retail share during that timeframe, the largest retail share gain of any full-line automaker. Year to date, Chevrolet retail sales are up more than 2 percent and the brand’s retail share has grown 0.5 percentage points to 11.2 percent. Year to date, Buick retail deliveries have grown nearly 4 percent and Buick has gained 0.1 percentage points of retail share.
      GM continues to benefit from a strong U.S. economy.
      “Key fundamentals like job security, rising personal incomes, low fuel prices and low interest rates continue to provide the environment for a very healthy U.S. auto industry,” said Mustafa Mohatarem, GM’s chief economist. “The U.S. auto industry is well positioned for sales to continue at or near record levels for the foreseeable future.”
      October Retail Sales and Business Highlights vs. 2015 (except as noted)

      Chevrolet
      Chevrolet had its best October since 2004 and best year to date sales since 2006 Chevrolet cars sales continue to grow faster than the passenger car industry Malibu, Camaro, Corvette, Spark and Volt were up 39 percent, 14 percent, 8 percent, 5 percent and 6 percent, respectively Malibu had its best October since 1980 Camaro had its best October since 2009 Colorado, Suburban, Tahoe and Trax were up 42 percent, 35 percent, 49 percent and 37 percent, respectively Tahoe and Suburban had their best October since 2007 Colorado had its best October since 2004 GMC
      ATPs growing three times faster than industry pace Acadia, Canyon, Yukon XL and Yukon were up 17 percent, 15 percent, 3 percent and 26 percent, respectively More than 25 percent Denali penetration for the brand Sierra had its highest ATP ever at $46,876 Canyon had its best October ever Acadia had its best October ever Yukon had its best October since 2007 and 14th month of year-over-year growth Yukon XL had its best October since 2007 Buick
      Best October since 2003 and best year to date since 2005 LaCrosse was up 13 percent with new model off to a strong start Envision had best month since launch Cadillac
      Escalade retail sales up year to date more than 6 percent October ATP was a record $55,058, up more than $2,300 from last October Record year to date ATP of $53,542 Year-to-date retail luxury market share in line with 2015 performance Average Transaction Prices (ATP)/Incentives
      GM’s ATPs, which reflect retail transaction prices after sales incentives, were $36,155 in October, more than $4,650 above the industry average in October and more than $1,000 above last October GM’s October incentive spending as a percentage of ATP was 11.7 percent, below the industry average of 11.8 percent, but down 1.4 percentage points from last month and well below many other competitors Fleet and Commercial
      Commercial fleet up 13 percent vs. September, and up 3 percent, selling day adjusted, YOY Malibu up 95 percent compared to last October Mid-size trucks up 218 percent compared to last October Federal Government sales up 53 percent Rental down 19 percent for October, and 29 percent year to date, according to plan Industry Sales
      GM estimates that the seasonally adjusted annual selling rate (SAAR) for light vehicles in October was approximately 18.0 million units. On a calendar year-to-date basis, GM estimates the light-vehicle SAAR was 17.4 million units
  • Recent Status Updates

  • Who's Online (See full list)