Ousted Primary Automotive CEO settles lawsuit for $30 million, clearing way for dealership sale

Ousted Key Automotive Group CEO David Rosenberg has settled a extensive and contentious lawsuit in opposition to his previous employer, clearing the way for an $880 million sale of its 27 car dealerships in the Northeast, which include six in Maine.

Houston-primarily based Team 1 Automotive closed on its order of the dealerships on Wednesday, the exact day Primary Automotive signed a settlement agreement with Rosenberg for $30 million, according to media reports and a Group 1 Automotive information release.

Rosenberg’s father, the late Ira Rosenberg, founded the Prime Motor Group dealership chain in Maine, which later on became part of Prime Automotive in 2017. David Rosenberg was named main government of the expanded business, which is centered in Massachusetts.

But Rosenberg before long complained about money misdeeds he mentioned he uncovered and exercised an choice that allowed him to promote the remainder of his shares to the business. Prime Automotive then fired Rosenberg, and when it unsuccessful to entirely compensate him for his shares, he submitted go well with in Massachusetts.

Key Automotive has been swirling in controversy for several years, capped in February when executives linked with its parent corporation, New York-dependent investment decision agency GPB Cash Holdings, had been arrested and charged with fraud. David Gentile, the founder, operator and chief executive of GPB Funds Holdings Jeffry Schneider, the owner and CEO of Ascendant Cash and Jeffrey Lash, a previous taking care of spouse of GPB Capital, all have been arrested and charged.

According to the charging files, GPB Cash had instructed buyers that they would receive month-to-month distributions totaling 8 percent of their investment decision on a yearly basis, from the income of the dealerships. But in its place, prosecutors allege, some or most of the revenue in fact came from money that new investors had been depositing.

A scheme in which cash from more recent traders are utilised to pay back more mature traders is known as a Ponzi plan and is unlawful. It is named soon after Charles Ponzi, a con artist functioning in the United States and Canada in the 1920s who was caught perpetrating this sort of a scheme.

In all, about 17,000 people today invested just about $1.8 billion in GPB Capital, and cash from operations started falling quick of the sum desired to pay out the every month distributions in 2015. According to prosecutors, GPB Cash started utilizing new investors’ money to make up the shortfall at that issue, very similar to a Ponzi scheme, in which new investments enrich longer-phrase traders and the fund professionals.

Key Automotive also confronted strain from some automobile suppliers who reportedly signaled that they supposed to close their franchise agreements with some of company’s dealerships in Saco and in other places simply because they considered their contracts have been breached when David Rosenberg was fired.

Toyota and Volkswagen, in distinct, threatened to pull their franchise agreements unless the dealerships were marketed or Rosenberg reinstated.

That force delivered the impetus for the business to place

Read More... Read More

Renault CEO ‘regrets’ unfixed split with Marchionne

Renault CEO Luca de Meo has a complete new regard for his previous manager, Sergio Marchionne.

And, he laments in no way obtaining the prospect to reconcile with the former Fiat Chrysler Vehicles main prior to his sudden passing in 2018.

De Meo shared this when requested about his relationship with Marchionne last week at a convention hosted by Automotive Information Europe sister publication Automobilwoche.

De Meo said that he remaining Fiat, exactly where he was just one of Marchionne’s proteges, for Volkswagen Group in 2009 for the reason that he was absolutely centered on item at that stage in his career. He did not sense Fiat experienced the identical degree of motivation.

“At the time, Volkswagen was exceptionally focused on the merchandise and makes. That healthy. I am a car guy. I felt that Fiat was not going in that course. It was extra about combining and synergies — and then you had the offer with Chrysler.”
In 2009, Fiat took handle of Chrysler right after the U.S. automaker’s quick journey through personal bankruptcy.

As Marchionne was having FCA on keep track of, de Meo was increasing up the ranks at VW, shifting from internet marketing director at the team to Audi’s administration board as profits boss to head of Spanish brand name Seat within just six yrs.

When he began at Renault Group in July 2020, de Meo inherited a enterprise that missing approximately 8 billion euros in the to start with 6 months of that yr. It was at that moment his appreciation of Marchionne’s management techniques grew exponentially.

“I basically didn’t seriously recognize what he was seeking to do [via the merger]. But now that I am sitting in kind of a comparable job, I realize what a guy at a shown organization needs to do.”

What was at the time a position of rivalry in between the two leaders — the value of solution — has morphed into admiration.

“When he entered Fiat, the firm was worth nothing. Fiat and all the excellent brand names within it have been value almost nothing. He multiplied the value of the complete team. He did so not essentially doing a ton of products and solutions. In that respect, he was a genius. So, at times when it will come to comprehending how to composition a enterprise to give it worth, I normally assume about him.”

Unfortunately, de Meo never ever bought to share these compliments with Marchionne, who was a legendary holder of grudges.

“We had a partnership that was like a father and son. So, when I left Fiat, he was pretty, incredibly angry. He did not want to talk to me any more,” de Meo said. “So, just one of the regrets of my daily life is that I never ever had the opportunity, possibly 10 decades later on, to sit with him and have a espresso and talk about the excellent occasions.”

Read More... Read More

Strattec CEO says long-term view helps in navigating automotive industry rollercoaster

Strattec Security Corp., like most automotive suppliers, has been on quite the rollercoaster since the onset of the COVID-19 pandemic. The Glendale-based maker of vehicle keys, locks, latches, lift gate systems and other vehicle access…

Strattec Security Corp., like most automotive suppliers, has been on quite the rollercoaster since the onset of the COVID-19 pandemic.

The Glendale-based maker of vehicle keys, locks, latches, lift gate systems and other vehicle access products dealt with the complete shutdown of its Mexican operations through the first part of the pandemic followed by a ramp up in demand that made for the company’s best year since it spun off from Briggs & Stratton in the mid-1990s.

More recently, Strattec has dealt with its customers, automotive giants like Ford, GM and Chrysler parent company Stellantis, shutting down plants amid the global shortage of semiconductors.

Frank Krejci, president and chief executive officer of Strattec, said in February he had a customer tell him the chip issue would be resolved by mid-March.

“Maybe it will be March, but it will be 2022 or 2023, not six weeks from when they were telling me,” he said.

Strattec worked with customers as they’ve navigated the shortages by trying to prioritize popular vehicles and the ones they can get all the parts for, Krejci said, noting the thought in the industry was August would be better than July and September would be better than August.

“Instead of continual improvement we fell off a cliff,” he said, adding that at one point in September GM had 10 of its 16 North American plants shut down.

In some cases, Strattec had products ready to ship only to have a customer call to say the plant they were destined for would be closed the next week.

“You go from going 100 mph to a dead stop,” Krejci said.

The result for Strattec is a quarter that shows the impact of the global supply chain issues. Net sales for the quarter were down 20.5%, a more than $25 million drop to $100.3 million. The company barely reported a profit with net income of $101,000, down from more than $8 million at the same point last year.

Krejci, however, wasn’t overly concerned about the quarterly result.

“Right now, if I really wanted to optimize our earnings, I could lay off a bunch of people, especially in Milwaukee, we’re not doing that,” he said.

lnstead, Krejci is taking a long-term view and he’s encouraged by several things in the market. For starters, automotive dealers have around 20 days of inventory on their lots, down sharply from a more typical level of 77 days. That means there will be plenty of demand from customers for restocking, Krejci said.

Things have also been going better in October, he said, with fewer shutdowns and a gradual ramp up in demand. Strattec also had a number of new business wins in recent years that are now

Read More... Read More

Why Volvo’s CEO says that after IPO ‘the work really starts’

STOCKHOLM — Volvo Cars gained 200,000 new shareholders even before trading of the automaker’s shares started on Friday in Sweden.

When asked how he felt about having that many new bosses, CEO Hakan Samuelsson said: “The more the merrier.”

He said the the 94-year-old’s company’s entry onto the Nasdaq Stockholm marks the start of Volvo’s next phase, which will include transforming into an electric-only brand by 2030 and providing the “best customer relations in the business” through an emphasis on direct-to-consumer online sales.

“And now we have the money for it,” Samuelsson joked minutes before ringing the opening bell for the opening of trading. At that moment, Volvo rejoined the exchange for the first time since 1999. That was the year it left Volvo Group and became part of Ford Motor. The U.S. automaker sold Volvo to its current owner, Zhejiang Geely Holding, in 2010.

During an interview after the ceremony Samuelsson said that the next phase is “a huge job.”

Electric flagship

Some of the money generated from the listing will go toward is a new flagship crossover that will succeed the XC90, Samuelsson told Automotive News Europe.

The electric-only premium large crossover is due to be revealed next year. Samuelsson said in March the car would have a name rather than a number and letter combination. He gave another hint today: The new car’s name will start with a vowel.

Another high-cost item the listing funds will help to finance is the cost of transforming to batteries to power new-generation Volvos. Part of that includes joining forces with Northvolt as a strategic partner for joint development and manufacturing of next generation battery cells.

Samuelsson said he looks forward to keeping an eye on Volvo’s share price as he considers it an immediate indicator of whether his thousands of new bosses feel the company’s transformation into an electric brand is heading in the right direction.

“Today, we are 3 percent electric. Nine years in the future, we should be 100 percent electric. Now is when the work really starts,” he said. “We need to change because our consumers are going in that direction. If you really want to have people driving Volvos in the future, you better make them electric.”

Humble and faster

The completion of the listing culminated a 180-degree turn that Volvo made in February when it decided against a merger with sister brand Geely Auto.

Volvo CFO Bjorn Annwall said that while the automaker was assessing the merger it decided that the pace of change within the industry made an initial public offering the better move.

“We concluded that it’s much better to have an ecosystem than to have a hard-coded group where you try to kind of have a perfect 10-year plan,” Annwall told ANE. “You’re much faster and more nimble if you have smaller, independent units that seek collaboration where it matters but are not forced to do it when it doesn’t matter, so let every company pursue its own happiness.”

https://www.autonews.com/executives/why-volvos-ceo-says-after-ipo-work-really-starts…

Read More