Former Obama Auto Adviser Wants To Shake $8 Billion Out Of GM

Illustration for article titled Former Obama Auto Adviser Wants To Shake $8 Billion Out Of GM
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1st Gear: Well, This Is Awkward

I don't want to be one of those knee jerk conspiracy theorists who see evil in everything former presidential advisers do, but there's something awfully curious about the guy who helped guide GM through its bankruptcy as part of the Obama administration now trying to get a seat on the board in order to squeeze cash out of GM.


Harry Wilson, formerly part of the auto task force, is now trying to get his way onto the GM board in order to enhance shareholder value by getting them to issue a major stock buyback.

From The Detroit News last night:

In an interview with The Detroit News Tuesday, Wilson said he thinks GM is holding on to way too much cash. He said that even with an $8 billion buyback, GM should still have $20 billion on hand by next year. He said the hedge funds are “prepared to take our case to where we need to,” but said it isn’t clear if GM will agree to appoint him to the board.

Wilson is working with four investment funds that support his election and proposal: Taconic Parties, Appaloosa Parties, HG Vora Parties and the Hayman Capital hedge fund founded by J. Kyle Bass. Together, they own approximately 34.4 million shares, or 2.1 percent of GM.

I'll let the Niedermeyer do most of the freaking out on this, because that's why he exists, but this is exactly the kind of thing you'd hope there'd be laws to stop as the guy who helped make sure GM could rise out of bankruptcy (with the help of a lot of government funds) is now trying to yank cash back out of it at a time when, honestly, I think that money should be used to protect the company against a downturn or, at least, be used for more investments in the future.

Yes, GM's share price is low and they could probably do with some dividends (which were already magically announced and I'm guessing we can trace back to Wilson or his buddies), but this is a remarkably shitty look even if it's entirely legal and entirely how the world works.


2nd Gear: Why Does Tesla Pay So Well?

Illustration for article titled Former Obama Auto Adviser Wants To Shake $8 Billion Out Of GM

Because working at Tesla ain't easy.

Give Elon Musk credit, he's the opposite of most people in this industry in that he rarely underestimates his customer and always overestimates his own ability. That pushes him to build products to such a high standard that even when he falls short – usually through delays – he still ends up with something kind of amazing.


That's gotta be hell on the staff, though, and Tesla's recent China woes seem to be falling heavily on them with Bloomberg reporting that they just lost another employee.

June Jin, vice president of communications, is no longer with the company, Tesla’s China spokesman Gary Tao said by telephone. He didn’t subsequently respond to further calls to his office or mobile phone seeking additional information. Jin didn’t answer calls to her mobile phone, nor immediately respond to an e-mail seeking comment.


Not the first and probably not the last.

3rd Gear: More Trouble Ahead At Volkswagen

Illustration for article titled Former Obama Auto Adviser Wants To Shake $8 Billion Out Of GM

In a few years, someone will be writing a TMS about how successful Volkswagen has been and how they made some changes that have resulted in huge sales. In a few years. For now, shit is rotten in the state of Lower Saxony as they're going out of their way in Wolfsburg to telegraph that it's going to be a tough 2015.

Blame a Europe where only Skodas are popular, a U.S. market that still doesn't have the right product mix, and a China that's suddenly competitive. Oh, and Russia, it's always Russia.


From Reuters:

"We are facing a challenging year," sales chief Christian Klingler said. "VW was not immune to the uncertainties in some regions that have continued into the current year."


To put it lightly.

4th Gear: Ford Trolls Patent Trolls

Illustration for article titled Former Obama Auto Adviser Wants To Shake $8 Billion Out Of GM

We are trolls, there's no doubt about it. Gawker is a company with a proud tradition of trolling, but at least we think we're trolling for all the right (or at least amusing) reasons. Patent trolls, like copyright trolls, are just trolling for the money and they've targeted Ford.

Basically, these companies buy patents and then look for companies that are doing similar things and try to squeeze money out of them. They call it "patent assertion," but everyone else calls it trolling.


Ford ain't taking that shit anymore according to Automotive News:

Patent assertion companies filed 107 lawsuits against automakers and suppliers in 2014, up from 17 lawsuits in 2009, according to San Francisco-based RPX Corp., which bills itself as helping corporations fend off trolls.

Now Ford is pushing back. The company told Automotive News that it recently inked a contract with RPX, which has spent nearly $1 billion amassing a portfolio of patents that could otherwise pose a threat to members such as Intel Corp., Microsoft Corp. and Samsung Group.

“We take the protection and licensing of patented innovations very seriously,” a Ford spokesman wrote in an e-mail. “And as many smart businesses are doing, we are taking proactive steps to protect against those seeking patent infringement litigation.”

Automakers may not be willing to spend hundreds of millions of dollars buying patents solely for legal defense. RPX hopes they will instead join Ford in signing up with the firm, whose members pay an average of $1.5 million annually for access to a shared portfolio of patents.


What a weird business model. Though, worth pointing out that Ford isn't always great on patents itself.

5th Gear: Who Wants To Be GM's Lawyer?

Illustration for article titled Former Obama Auto Adviser Wants To Shake $8 Billion Out Of GM

I missed this earlier, but GM has had to extend the term of their top lawyer Michael Millikin as they look for a replacement.

Per Reuters:

Last October, GM said Millikin would retire early in 2015 but remain general counsel, a position he has held since 2009, until a successor was named.

GM spokesman Jim Cain said on Monday that "the search is in great shape," but declined to provide further details on when a replacement would be named.


Sure it is...

Reverse: The Olden Days

After a six-week sit-down strike by General Motors (GM) autoworkers at the Fisher Body Plant No. 2 in Flint, Michigan, GM president Alfred P. Sloan signs the first union contract in the history of the American auto industry. The strike was organized by the United Auto Workers (UAW), which wanted to be recognized as the sole bargaining authority for employees at GM factories. The UAW, founded in 1935, also demanded improved working conditions and job security for GM autoworkers. At the time of the strike, GM, which was founded in 1908 by William Durant, had been the world's largest automaker since the early 1930s.




Neutral: Is This Wilson Thing Strange Or Normal? Is it normal or not?

Photo Credit: AP Images

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So RPX protects against patent trolls... By being patent trolls?

"Sign on to share our portfolio or who knows, someone might come along and try to assert their patent and it would be a shame if that happened..."