General Motors reported that Chevy Volt sales for May came in at a paltry 1,680. To put this in perspective, GM sold 29,579 Chevy Malibus during the month. The funny thing is, I do not recall seeing as many TV ads for the Malibu as I have for the Volt. While GM’s ad strategy (which has seen the company discontinuing advertising on Facebook and the Super Bowl) has received much attention, auto journalists and analysts do not seem to want to question the reason why GM is spending such a disproportionate amount of money advertising a vehicle that is losing money for the company and its shareholders.
GM did not think that spending $10 million annually on Facebook was leading to enough additional sales to justify the expense. Based on the amount of ads I see on the Volt, I would guess that the company is spending at least that …
The Detroit Free Press reported on Friday that General Motors failed to initially disclose possible conflicts when it awarded a $600,000 contract to Mother New York, an ad agency with ties to GM’s Chief Financial Officer, Dan Ammann. Ammann’s wife, Pernilla Ammann, is a partner and Chief Operating Officer at the ad agency. In typical Government Motors’ fashion, Ammann dubiously denies having had knowledge of the deal. Before looking at what the money purchased, let’s look at the likelihood that Ammann really knew nothing.
Honestly, is it likely that a CFO at a major corporation would not know that his wife’s firm just received a $600,000 contract from his firm? How might the conversation between the two have gone at the time the windfall was received by Mrs. Ammann’s firm? Maybe something like this:
Mrs. Ammann: “Hi Honey, how was work today?”
Mr. Ammann: “Just fine Dear, still trying
General Motors announced today that its Chief Financial Officer, Chris Liddell, will be leaving the company on April 1st. GM shares hit a new low of $30.95 on the news. Mr. Liddell joined GM in January of 2010. Having served for over a year, Liddell has exceeded the average stay of top executives at GM. GM has gone through three CEOs since they emerged from bankruptcy in June of 2009.
GM’s VP, finance and treasurer, Dan Ammann, will be replacing Liddell. Prior to joining GM, Ammann was managing director and head of Industrials Investment Banking for Morgan Stanley.
It is not clear why Liddell is leaving, but the instability at top management positions at GM should be viewed as a sign that the company may have underlying problems and has not settled in to a successful long-term business plan. Investors and potential investors in GM may be wise …