General Motors, Chrysler and Ford sales rise, perhaps

Could it possibly be true that U.S. automobile companies General Motors, Ford and Chrysler are reporting sales gains and, assumedly, profits instead of more red ink?
That is what U.S. automakers said Tuesday, even though many of the figures were adjusted to allow for corporate changes, like Ford's sale of its Volvo brand, and the bankruptcies of GM and Chrysler, according to the Reuters international news service. The announcements were not well-received by stock market investors, who sent Ford shares down nearly 2 percent, even though normally buoyant Toyota and Honda sales fell in July. But the sales increases were met with enthusiasm by some industry analysts, who had feared the U.S. economy was facing a double-dip recession. "In June, you had the feeling that maybe the industry wasn't out of the woods, and there was a lot of talk of a double dip. But June really seems to have been a blip," Al Castignetti, the head of Nissan sales in the U.S. market, told Reuters. Yeah, maybe. The big problem is that auto industry players talk on and on but what they say may not have anything to do with what's really going on. GM and Chrysler have been allowed to take billions of dollars worth of debt off their balance sheets -- without paying the money back, of course, and eventually sticking the taxpayer with the bill -- and to re-enter the world of real companies even though the U.S. taxpayer owns major amounts of their shares. How can anyone ever trust company reports again? Ford did not take bailout money or file for bankruptcy but have shown little resiliency going forward. Where are the new U.S. car models? Where are the new head-turning designs? Doesn't anyone in the industry care that nobody talks about American cars anymore unless they work for the Justice Department? "We are certainly optimistic about our prospects for the third quarter," Ford's U.S. sales chief, Ken Czubay, told Reuters. Yeah, right.

Industry experts fear GM still stuck in same gear

Nice to hear that automobile industry experts have begun to question General Motors' decision to choose a longtime veteran insider to run the largest U.S. automaker after the federal government made removal of the old CEO a condition of extending billions of dollars in loans. Cable News Network (CNN) said today that "many" industry experts are questioning whether 25-year GM insider Fritz Henderson is the right person to make the major changes needed to turn the largely moribund carmaker around, an issue raised here three months ago. Like the Ford Motor Co. and bankrupt Chrysler Corp., GM has been unable to build fuel-efficient vehicles that could compete on quality with rival Japanese automakers Toyota and Honda, even more than 30 years after the first OPEC oil embargo heralded a sea change in world fuel supplies. GM filed for bankruptcy protection at the urging of the Obama administration on June 1. "The removal of managers and executives has been mainly at lower levels, thinning ranks and taking out layers. It's not replacing people who made the mess and created the culture," said former GM market research and planning executive Rob Kleinman. Now managing director of consulting firm RAK & Co., Kleinman said what GM needs now is a management overhaul if it is to return to profitability. "Most successful turnarounds have been led by outsiders," he said. "The fact that Fritz [Henderson] seems dedicated to keeping the management team in place makes me extremely uncomfortable." In fact, GM's domestic rivals are being run by former industry outsiders, with Ford hiring Alan Mulally from Boeing in 2004 and Chrysler now headed by Fiat CEO Sergio Machionne, who was not in the industry when he was hired by the Italian carmaker in 2004, Reuters said. "You need some fresh blood in there," said industry analyst and consultant Erich Merkle. "The culture is not one that fosters speed, especially speed to market." But Henderson insisted Fortune magazine that he can bring about the necessary changes, CNN said. "I know the industry inside and out; I know the industry well," he told the magazine. "I think that does bring some experiences that can be very helpful in terms of change because I know what needs to be changed." And David Cole, chairman of the Center for Automotive Research, called Henderson a "high-speed decision-maker" who already has made important changes in GM's executive culture, CNN said. But Kleinman said GM was suffering from being out-of-touch with consumers and a decided lack of accountability, things a corporate insider would be unlikely to be able to fix.