State of the Union February 28, 2011

Feb 28, 2011 online at www.uawlocal2250.com

The March schedule has been released. It has 10.3 off the K-line every day with Friday, March 18 off.

From Automotive News: Volkswagen AG passed rival Ford Motor Co. in the auto industry earnings race last year on surging demand in China. Net income surged sevenfold to 6.84 billion euros ($9.42 billion), the German automaker said today. Ford posted 2010 profit of $6.56 billion, while General Motors Co. reported $4.7 billion. Toyota Motor Corp. forecasts 490 billion yen ($6 billion) in profit in the year ending March 31.

More Automotive News: A record 672,000 used commercial trucks were registered in the United States last year, up 22 percent, says R.L. Polk & Co. of Detroit, which collects and interprets global automotive data. It was the first year registrations of used commercial trucks exceeded 600,000 units. Gary Meteer, director of sales and client services at Polk, said the increase is an indication that large fleet operators are buying new commercial vehicles, making used ones available to smaller companies and independent owner-operators.

In a ruling that could have widespread ramifications in the auto industry, the Supreme Court said a wrongful death suit can go forward against Mazda which claims the automaker was negligent in not having three-point seat belts in the center back seat of a 1993 Mazda MPV minivan. A woman was killed in a 2002 accident while wearing only a lap belt, which complied with federal regulations at the time. The rules allowed for either a lap belt or a shoulder belt. As a result, other cases are getting another look, the Wall Street Journal reports. The U.S. Supreme Court ordered a lower court Monday to reconsider a ruling that barred a product-liability lawsuit alleging Ford Motor Co. defectively designed the side windows in a 1997 pickup truck, according to the WSJ. The Ford case focuses not on seat belts but on the type of glass the company chose to install in its 1997 F-150 pickup. The plaintiff alleged Ford was liable in the death of a passenger in an F-150 who was ejected during a 2002 accident in which the truck veered off the road and rolled over several times. The victim wasn't wearing a seat belt, and his mother alleged he would not have been ejected had Ford installed laminated side windows on the truck instead of using tempered glass. Federal safety regulations gave Ford a choice in which type of windows to install.

6 U.S. Cars that Trounce the Imports – Fortune
By Doron Levin
Apples-to-apples comparisons among vehicle models are always difficult. But the Big Three are rumbling with Toyota, Honda, and even Audi, and not getting thrown out of the ring. Detroit has managed to narrow the differences with the competition and in some cases erase them. Let's take a look at some of the matchups of foreign car vs. domestic, where every battle for a customer is a main event.
Chevrolet Cruze vs. Honda Civic
General Motors earned a reputation as a manufacturer of mediocre small cars with the Chevrolet Cavalier and Cobalt, while Honda's Civic hasn't been a best-seller for a couple of decades without reason. The new Cruze could help GM live down its reputation. Cruze comes with a 1.4 liter turbo and in its least expensive version -- a manual transmission. The car is handsome, handles nicely, with good fit and finish. Starting at $18,000, it's a value, at least initially, compared with Civic. With 94.6 cubic feet of interior space, Cruze compares nicely with Civic's 90.9 cubic feet. Finally GM is showing respect for the segment of its customers that wants a small car and doesn't want to be treated as small time.
Chevrolet Equinox vs. Honda CR-V
One of Chevrolet's hottest-selling models is its Equinox compact crossover, which competes with Honda's CR-V. It took GM a while to catch up with Honda, the Toyota RAV-4 and others in this category, but sales volume figures suggest that the buzz is getting around. The Equinox LS offers a 2.4 liter engine, same as CR-V, has a six-speed automatic to Honda's five-speed and costs only about $1,000 more with similar equipment. Equinox's fuel economy is superior, as is legroom, though it gives up a bit of cargo space to the CR-V. The engineers at GM have even come up with a feature the automaker says is exclusive: a back-up camera with a screen integrated into the rearview mirror. For this, among other reasons, the model has won a string of awards from various publications and safety groups.
Chevrolet Silverado vs. Toyota Tundra
Most of us don't have to worry about how we're going to tow our horses to the dressage competition or whether our vehicle has enough grunt to haul the speedboat up to the lake. Those who do fret about such things are still liable to choose a Chevrolet Silverado pickup with special towing capabilities. Toyota's Tundra pickup is making strides in this competition, with a 5.7 liter engine to Chevy's 6.2 liter. Either can carry about a ton of cargo. The key metric for customers considering these vehicles is maximum towing, 10,700 pounds for Silverado versus 10,400 for Tundra. (Don't overlook Ford's F-Series or Nissan's Titan, both of which are also strong contenders.)

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Judge Blasts SEC's Lack of Dilligence

Dig into the details of most FCPA enforcement actions and one quickly discovers that the conduct at issue is old - in some cases very old.

The February 2011 enforcement action against Tyson Foods for instance related to conduct between 2004 and 2006. See here for the SEC's complaint.

The January 2011 enforcement action against Maxwell Technologies alleged conduct going back to 2002. See here for the SEC's complaint.

The December 2010 enforcement action against Alcatel-Lucent alleged conduct going back to 2001. See here for the SEC's complaint.

The June/July 2010 Bonny Island bribery enforcement actions alleged conduct going back to 1995. See here for the SEC's complaint against Technip for instance.

The FCPA does not have a specific statute of limitations, rather the "catch-all" provisions in 18 USC 3282 (for criminal actions) and 28 USC 2462 (for civil actions) apply.

Cooperation is often the name of the game in FCPA enforcement inquiries and, because of that, tolling agreements are frequently agreed to. Thus, discussing a fundamental black-letter law concept like statute of limitations in the FCPA context seems foolish.

But imagine a world (a world that perhaps is slowly developing - see here for instance) in which individuals and companies in FCPA enforcement actions do mount legal defenses based on black-letter legal principles such as statute of limitations.

In that world, it is likely one would see judicial opinions like the recent opinion from U.S. District Court Judge Jane Boyle (N.D. Tex.) in SEC v. Microtune, Inc. et al (see here for the opinion).

The relevant facts are as follows.

In June 2008, the SEC filed an enforcement action against Microtune and two of its former executives alleging a fraudulent stock-option backdating scheme between 2000 and mid-2003. As noted in the opinion, the "crux" of the limitations defense "was that most of the acts forming the basis of the SEC's case occured between 2001 and mid-2003."

The precise issue before the court was "whether the doctrine of fraudulent concealment, relied on by the SEC, operate[d] to toll the running of the five-year limitations period under the facts of the case." The SEC argued that it was entitled to judgment as a matter of law on the limitations defense "because the 'discovery rule' and certain equitable tolling principles including 'fraudulent concealment' and the 'continuing violations doctrine' applied and salvaged claims that would otherwise be barred by the five-year statute of limitations." The court had previously rejected the SEC's "discovery rule" and "continuing violations doctrine" claims, and focused on the SEC's "fraudulent concealment" theory for tolling the statute of limitations.

The court noted that in order for the SEC to prevail on its "fraudulent concealment" claim, it had to show that it "acted diligently once [the SEC] had inquiry notice, i.e., once [the SEC] knew of or should have known of the facts giving rise to [its] claim." The court held that there was "no genuine issue of material fact as to whether the SEC acted diligently nor as to whether the SEC discovered the alleged wrongdoing within the limitations period."

As noted in the opinion, "when asked about the SEC's diligence" counsel for the SEC explained as follows: "we, often for resource reasons, wait until the company does its own investigation before we complete ours." [In July 2006, Microtune announced it was commencing an internal review as to the alleged practices].

Judge Boyle was not persuaded and stated as follows. "While perhaps an understandable method of allocating Commission resources, such justification does not excuse the SEC's apparent inactivity from mid-2004 to mid-2006, when further investigation would have uncovered the full extent of Microtune's backdating and would have allowed the SEC to bring a complaint against Microtune much earlier than 2008."

Accordingly, the judge dismissed all claims against the defendants falling outside of the five year limitations period - except those saved as a result of tolling agreements reached in 2007 and 2008.

See here for an article about the ruling from Shannon Green at Corporate Counsel.

Ask any FCPA practitioner and, in a candid moment, they will tell you that SEC FCPA inquiries often unnecessarily drag on for many years, including long stretches of complete inactivity, unreturned phone calls, and other delays due to SEC resource issues - including turnover of SEC attorneys assigned to the case.

Again, because cooperation tends to be the name of the game in FCPA inquiries and because tolling agreements are frequently agreed to, the SEC's lack of diligence in an FCPA matter is generally not a relevant issue.

However, every once in a while it is interesting to think of what would happen if FCPA enforcement largely took place in the context of an adversarial system.

The recent Microtune decision would seem to provide a glimpse.

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State of the Union February 25, 2011

Feb 25, 2011 online at www.uawlocal2250.com

There will be a bake sale on Monday, Feb. 28 at the Suggestion Office from 8 am until they are sold out. During the day there will also be free suggestion items given out. Proceeds will go to this year’s Make-A-Wish dream.

Pundits everywhere are weighing in on GM’s financial results that were announced yesterday. Here are some of their comments:
"Their recovery has been fueled by significant cost-cutting, arrival of new products that consumers were seeking along with better management of incentives and supply," said Jesse Toprak, vice president of industry trends and insight at TrueCar.com, which tracks industry pricing and sales. "The sky is the limit for G.M. after becoming profitable at this low of a sales pace."

Morningstar analyst David Whiston said even a sizeable shift to small cars won't halt future profits. "As long as GM is structured to make money at a 10.5 million [U.S. industry annual sales rate], they will be printing money," he said.

Daniel Howes, Detroit News: "Here's an automaker that generated $2.4 billion in automotive cash flow, cut its debt to $4.6 billion from $15.8 billion, reported net income of $500 million for the final three months of last year and a $4.7 billion profit for the full year — its first since 2004 — and still investors pounded GM shares down to their initial public offering price of roughly $33. That says as much about a nagging feeling that the more GM changes, the more it is bedeviled by some of the same problems, as does the volatile economy, The Street and its infantile attention span.


Tom Walsh, Detroit Free Press: "Making solid profit in a soft market is quite a comeback. But as the last few weeks have shown, the world remains a volatile place. The auto industry will remain hyper-competitive."

Kelly Blue Book revealed their top 10 choices for best family vehicles. The Chevy Suburban was rated first and the Chevy Traverse was third. There were no Toyota vehicles in the rankings.

Why Americans Support Union Rights: 5 theories

New York – A clear majority of Americans back the kind of collective bargaining rights that Gov. Scott Walker is trying to strip from Wisconsin labor unions, says a Gallup poll. Why? It's still unclear who will prevail in Wisconsin's stand-off over labor union rights — but the American people seem to have chosen which side they're on. According to a USA Today/Gallup poll, 61 percent of Americans would oppose a law in their state taking away the collective bargaining power of public employee unions. Just 33 percent said they would support such a law. The public was more evenly split on labor unions themselves — 46 percent said they were "harmful" to states, while 45 percent said they were "helpful." The poll appears to show, says USA Today, that "Americans are reluctant to take away something that unions have already." Why?

1. Americans support fundamental rights for workers
Even a "sizable chunk" of Republicans are opposed to rolling back bargaining rights, says Greg Sargent at The Washington Post. Four in ten (41 percent) say they wouldn't support such a law. That's a sign that this argument has become about "fundamental workers' rights," not labor union greed. And there's still "bipartisan consensus" backing workers' rights.

2. Republicans are perceived as the aggressors
The union support may in part be down to "what chess players call zugswang," says Nate Silver at The New York Times. That's when the "first mover or perceived aggressor" — in this case, Gov. Scott Walker (R-Wis.) — is at a disadvantage. Any move to tackle the deficit is likely to be "fairly unpopular." Because Walker moved first, he may bear the brunt of the criticism.

3. Americans like school teachers
While some on the right are content to see the Wisconsin protesters as union thugs, says Michael Tomasky at The Guardian, it's clear that most Americans view them simply as working folks, just like themselves. "Most people just don't hate school teachers, and aren't going to be worked up into a frenzy against them, and don't think them greedy either."

4. Citizens suspect political motives
Americans see through Scott Walker's plan, says Joe Gandelman at The Moderate Voice, and are "turned off by what is now appearing to be a clearly political move." To many voters, what's going on in Wisconsin — and around the country — does not pass "the smell test." It reeks of a political power play.

5. The poll is confusing
The Gallup poll asked voters if they supported collective bargaining rights, says Adam Geller at The Huffington Post, rather than just collective bargaining. That might cause respondents to confuse the issue with workers rights — a very different thing — making the survey "less balanced than is the norm for a Gallup poll."

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Big, Bold, and Bizarre

Many words could be used to describe Foreign Corrupt Practices Act enforcement in 2010.

The words I selected in this Year in Review piece recently published by BNA's White Collar Crime Report are big, bold, and bizarre.

The article provides an overview of the year that was and describes the big, bold, and bizarre year in FCPA enforcement; the increased scrutiny of the FCPA and FCPA enforcement; and events related to the FCPA as well as other anti-corruption laws and initiatives.

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State of the Union February 24, 2011

Feb 24, 2011 online at www.uawlocal2250.com


From Chairman Mike Bullock: We received an email from UAW VP Joe Ashton today informing us that the full share payout of profit sharing will be $4300. per qualified employee. It will be paid on your check on March 25. More good news - we will be adding one permanent, full time UAW Benefit Representative. Lisa Williams will be appointed to the position. Lisa had been serving as the alternate benefit rep. Congratulations Lisa! Management is pulling ahead with the recall of the 24 employees. 7 were called back Tuesday, 11 more will be called back next Tuesday March 1st, seniority date 10/15/07, ssn # 6000, and the remaining 5 on March 7, seniority date 6/2/08, tiebreaker OGM 6/24/85. As a note to all the employees who are "return to former group" transfers, your Par. 63b's stay on file for any other transfers you may have submitted for, they are not cancelled due to this transfer. You can go to personnel to withdraw those at any time if you so chose.

From Automotive News: Toyota Motor Corp. said today it will recall 2.17 million Toyota and Lexus vehicles in the United States to inspect and repair accelerator pedals that may get trapped in floor mats or carpeting. The automaker said more than half of the recalled vehicles -- 1.54 million units -- are being added to a giant 2009 recall to inspect and repair accelerator pedals that may get trapped in floor mats. The affected 1.5 million vehicles include about 603,000 Toyota 4Runner SUVs sold from the 2003 through 2009 model years; about 17,000 Lexus LX 570 SUVS sold from the 2008 through 2011 models years; and about 761,000 Toyota RAV4 vehicles sold from the 2006 through 2010 models years. The Japanese automaker has now recalled 19.2 million Toyota and Lexus vehicles worldwide and more than 13.7 million in the United States to address safety problems since the fall of 2009.

From the Detroit News: Federal safety regulators and Ford Motor Co. are still in talks over whether the automaker's limited recall of 135,000 F-150s over air bag issues will satisfy the government's concerns about safety. The Dearborn automaker on Wednesday agreed to recall the F-150 pickups from the 2005 and 2006 model years because of concerns about airbags deploying without warning.
GM Announces First Full-Year Results as New Company

GM achieves four consecutive quarters of profitability
Calendar year net income of $4.7 billion, earnings per share of $2.89 on a diluted basis Calendar year earnings before interest and tax (EBIT) adjusted of $7.0 billion
Material Weakness in Financial Reporting Eliminated

DETROIT – General Motors Company (NYSE: GM) today announced its calendar year 2010 results marked by $4.7 billion of net income attributable to common stockholders for its first full year of operations.

Revenue for the calendar year was $135.6 billion. Automotive cash flow from operating activities was $6.6 billion and automotive free cash flow was $2.4 billion, both reflecting the impact of a $4.0 billion voluntary cash contribution to the company’s U.S. pension plans.

“Last year was one of foundation building,” said Dan Akerson, chairman and chief executive officer. “Particularly pleasing was that we demonstrated GM’s ability to achieve sustainable profitability near the bottom of the U.S. industry cycle, with four consecutive profitable quarters.”

GM generated the following results:
Fourth Quarter ‘10 Calendar Year ‘10
Revenue (bils.) $36.9 $135.6
Net income attributable to common stockholders (bils.) $0.5 $4.7
- Adjustments and loss on preferred, included above (bils.) $(0.4) $(0.2)
Earnings per share on a fully diluted basis ($/share) $0.31 $2.89
- Adjustments and loss on preferred, included above ($/share) $(0.21) $(0.14)
Earnings before interest and tax (EBIT) adj. (bils.) $1.0 $7.0
Automotive net cash flow from operating activities (bils.) $(1.7) $6.6
Automotive free cash flow (bils.) $(2.8) $2.4
- Contribution to U.S. pension plans, included above (bils.) $(4.0) $(4.0)

GM North America (GMNA) had EBIT in the fourth quarter 2010 of $0.8 billion, up from a loss of $3.4 billion in the fourth quarter 2009. GM Europe (GME) had a loss before interest and taxes of $0.6 billion, an improvement from a loss of $0.8 billion in the same quarter a year ago. GM International Operations (GMIO) had EBIT of $0.3 billion, down from $0.4 billion in fourth quarter 2009. GM South America (GMSA) had EBIT of $0.2 billion for the fourth quarter, compared with $0.3 billion in the same quarter a year ago. GM began reporting GMSA results as an operating segment in the fourth quarter, and has revised the segment reporting for prior periods. Automotive net cash flow from operating activities for the fourth quarter was $(1.7) billion, which reflects a $4.0 billion voluntary cash contribution to the U.S. pension plans. After deducting $1.1 billion of capital expenditures, automotive free cash flow was $(2.8) billion.

As a result of GM’s 2010 financial performance, the company will pay profit sharing to approximately 45,000 eligible GM U.S. hourly employees, and approximately 3,000 eligible GM Components Holdings (GMCH) employees. The average payout per employee will be approximately $4,300 for GM employees and $3,200 for GMCH employees.

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The FCPA in 2015 - What Will It Look Like?

The Dow Jones Global Compliance Symposium (see here for details) is set for March 31st and April 1st in Washington DC at the Park Hyatt Washington.

I am pleased to be participating in a panel discussion on March 31st titled "The FCPA in 2015 - What Will It Look Like?"

Moderated by Dionne Searcey (Legal Correspondent - Wall Street Journal), other panelists will include: Mark Mendelsohn (Paul Weiss); Peter Jaffe (Chief Ethics & Compliance Officer, AES); and Frederic Miller (PricewaterhouseCoopers).

Other panels or interviews at the Symposium will focus on the FCPA and related issues as well.

Joe Palazzolo (Dow Jones and Wall Street Journal Corruption Currents) will speak with Stephen Reynolds (SVP & General Counsel, Alcatel-Lucent) in a keynote interview titled "Moving Forward: Alcatel-Lucent's Anti-Corruption Program." See here for prior posts on the December 2010 Alcatel-Lucent FCPA enforcement action.

Georg Kell (Executive Director, UN Global Compact) will be interviewed on "Stamping Out Corruption: The Role That Corporations Can Play."

Dionne Searcey will speak with Commissioner Dabney Friedrich (U.S. Sentencing Commission) in a featured interview expected to cover how new and evolving corporate and anticorruption regulations are being enforced.

David Wessel (Economics Editor, Wall Street Journal) will speak to former U.S. Senator Arlen Specter in a keynote interview titled "FCPA Enforcement: How to Comply. If No Compliance, Then Jail Time, Not Just Fines." As highlighted in this previous post, Senator Specter chaired the November 30, 2010 Senate Judiciary Subcommittee hearing on "Examining Enforcement of the Foreign Corrupt Practices Act."

Jean Eaglesham (Senior Reporter, The Wall Street Journal) will speak with Lorin Reisner (Deputy Director, Enforcement Division, Securities & Exchange Commission) in a keynote interview expected to cover the SEC's enforcement of the Foreign Corrupt Practices Act.

Cassell Bryan-Low (Reporter - Wall Street Journal) will speak with Vivian Robinson (General Counsel - U.K. Serious Fraud Office) in a featured interview titled "The U.K. Bribery Act: Dispelling the Myths."

In addition, other events or interviews at the Symposium are sure to touch upon FCPA issues as well.

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State of the Union February 23, 2011

Feb 23, 2011 online at www.uawlocal2250.com

Here are some excerpts from a first drive review of the Nissan NV from trucktrend.com We briefly drove a pre-production 2500 HD high-roof with the V-8. This combination is expected to be the volume seller (estimated price $33,000). There will be side and rear glass packages and a 12-passenger version coming in about a year, but our pre-production tester had no glass behind the A-pillar. It's longer than the comparable Sprinter, but the standard roof height is similar to that of the E-Series. There's a lot of room up front, thanks to the pickup-like nose. That pushes the engine forward, out of the passenger area. The downside? Not everyone is going to like the styling. There are some cool features in the cabin, such as the passenger seat that can fold flat and serve as a work area. There are also a lot of storage cubbies throughout, including several above the sun visors, like you would see in an RV.

Wards Auto also sampled the NV. Here are some comments: A person used to softer-riding passenger cars will find a commercial vehicle like the NV uninspiring, perhaps even uncivilized. Its suspension is characteristically stiff and acceleration poky. The NV’s tip-in (acceleration from a stop) is not feeble by any means, but a short test drive of a V-6Chevy Express exhibits quicker feedback. Cargo volume is ample, with 234.1 cu.-ft. (6.6 cu.-m) for standard-roof models (Chevy Express is 267.3 cu.ft. in regular wheelbase) and 323.1 cu.-ft. (9 cu.-m) with the high roof. But the Sprinter’s specs show it has more space. Optional creature comforts, part of a technology package, include Bluetooth hands-free dialing, XM satellite radio and navigation with a rear view monitor. It’s a nice add-on but looks quaint when compared with Ford’s optional Work Solutions package, which, albeit pricey, includes a $1,400 in-dash computer and wireless mouse and printer, with the ability to access files stored in a remote personal computer. The NV also offers nothing that approximates the Chevy Express’ Access package, with side panels that open up, eliminating the need to climb inside. Still, winning business from fleet companies familiar with the established players will not be easy. Perhaps that’s why Nissan expects 60% of sales to come from small-business/personal-use buyers.

America’s freedoms need strong unions to survive
By Bob King

Doing justice does not mean trying to reduce the wages, benefits and standard of living of all workers in America. Doing justice to me means that everyone has an equal opportunity, and if they make the individual decision to work hard and live by the rules, then they will be able to live a middle-class standard of living and retire with dignity and maintain their middle-class standard of living. There are strong forces in America that preach the vision of scarcity, the vision of division and the vision of fear. They try to convince us that we are not a country gifted with great abundance; they try to convince us that there is not enough abundance to go around, so we had better be jealous of anyone who has more than we do. We had better try to take away from someone who has more than us and bring them down to our level of scarcity rather than trying to bring ourselves (and everyone else) up to their level.

Doing justice means guaranteeing all workers the right to collectively sit down with their employer and bargain fair wages and benefits that allow them to have and maintain a decent middle-class standard of living. It means giving workers a real voice in decision making in building the best product or providing the best service. The First Amendment gives all Americans the right to freedom of speech and association. For workers, these First Amendment rights are the right to organize and bargain collectively with their employer. The exercise of these rights dramatically reduced poverty and the exploitation of workers in the United States and created a far greater sharing of the wealth of this country. The exercise of these rights built the great American middle class. The forces preaching scarcity, division and fear have been working successfully to destroy the American middle class. They want workers to have less and less so the wealthiest can have more and more.

We all have a choice to make. Do we want an America of scarcity, division and fear, or do we want an America of abundance, common good and deep caring about one another? The believers in scarcity, division and fear have been singling out groups of workers. First, it was textile workers, then electronic workers, steel workers, auto workers and manufacturing workers in general. Their newest target is public sector workers: police, fire, teachers and government workers. We all should support public workers in having a decent middle-class standard of living. To dismantle this standard of living is not doing justice and is harming everyone in society.

For America to be great, we need to rebuild the great American middle class. To rebuild the middle class, we need to strongly support workers' First Amendment rights and support all workers in the right to sit down and bargain fairly and responsibly with their employers. There cannot be a strong democracy without a strong middle class. There cannot be a strong middle class without strong unions.

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State of the Union February 22, 2011

Feb 22, 2011 online at www.uawlocal2250.com

Reminder: If you, or any employee you know, have changed addresses recently you need to go to mysocrates (mygmportal.gm.com), go to "myServices" and click on the “personal” tab to update your information. This is the contact information the company will use for all correspondence, including recall of laid off or transferred members.

From FleetOwner: General Motors is planning to push hard alternative-fuel options and maintenance services for commercial fleets in 2011. The auto giant said it is building off growing sales to what had been a moribund market during the recent global economic downturn. In a conference call with reporters, Brian Small, gm of GM Fleet and Commercial Operations, said the company’s sales to commercial customers rose 11% in 2010 with continued growth expect in 2011, although sales to government fleets are expected to lag due to budgetary constraints. “We’re seeing fleets starting to reinvest in their vehicles in an expanding effort to replacing aging equipment,” Small said, pointing out that GM’s commercial sales jumped 41% in the fourth quarter last year after dipping 2% in the third quarter. In particular, GM reported that sales of cargo vans doubled in Jan. 2011 compared to figures posed in Jan. 2010. To capture more sales in the now-expanding commercial market, GM is rolling out new factory-installed alternative fuel options this year for its cutaway van chassis, along with a new maintenance service called FleetTrac, aimed at helping commercial customers schedule vehicle repairs at outside repair shops without using a fleet management firm. Available to fleets of all sizes, FleetTrac consolidates vehicle maintenance invoices, documents vehicle repair history and minimizes the process for repair authorization. Invoice details are delivered through a secure website and can be customized to fit any business structure.

GM is expected to report fourth quarter and full-year earnings this Thursday. Along with that could (should?) be the amount of profit sharing to be paid out. The Detroit Free Press is reporting that the average estimate of 18 analysts is $5.3 billion for the year. As Jonothan Oosting of Mlive.com wrote, “it's further proof that Sen. Mike Johanns (R-Nebraska) was wrong when he called GM "the worst investment you could possibly make."

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State of the Union February 21, 2011

Feb 21, 2011 online at www.uawlocal2250.com

From Chairman Mike Bullock: Seven of the 24 members to be recalled for the partial crew on second shift in body shop will be coming back tomorrow. That will make the seniority date to hold the plant 6-19-2000. Also, the expansion of prime time vacation will result in the recall of all of our laid off traditional members as well as over 40 entry level members sooner than they otherwise would have been.

The sale of raffle tickets for the use of a VAP vehicle raised $2137 for this year’s Make-A-Wish dream!! Another great example of the generosity of this workforce! The winners, in order, are: Bobby Cox (chassis); Virgil Dohack (trim); Les Shelby (skilled trades); Rich Funken (skilled trades); Renee Watson (body); Susan Spillane (quality); and Juan Saldana (quality). There will be a bake sale Monday, Feb. 28 at the Suggestions office to raise money for this year’s dream.

From Automotive News: General Motors’ fleet business grew 21 percent in 2010 and will rise again this year, the head of GM's fleet sales said. Brian Small, general manager of GM Fleet and Commercial Operations, would not predict fleet sales growth for GM this year, but said he expects industrywide fleet sales to grow 8 to 10 percent in 2011. Fleet sales include sales to rental companies, commercial customers and government agencies. Last year fleet customers bought 28 percent of the 2.2 million vehicles GM sold, up from 25 percent of GM's 2.1 million sales in 2009, according to data compiled by the Automotive News Data Center.

From the Detroit News: Federal safety regulators have opened an investigation into nearly 44,000 Toyota Highlander hybrid vehicles over concerns their engines can stall and fail to restart. The National Highway Traffic Safety Administration said in a notice posted on its website Saturday that it had opened a preliminary investigation into 43,941 2006 Toyota Highland hybrid SUVs after receiving 32 complaints. NHTSA said 21 of the incidents occurred at speeds of 40 miles per hour or more; 26 reported that the vehicle could not be restarted or that it was towed to the dealership. Toyota has had other problems with engines stalling. In August, Toyota recalled 1.33 million 2005-2008 Corolla and Matrix vehicles in North America for stalled engines.

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"Foreign Official" First

For the first time in FCPA history, a federal court judge, with the benefit of a detailed and complete overview of the FCPA’s extensive legislative history on the “foreign official” element, is being asked to rule on the DOJ’s interpretation that employees of alleged state-owned or state-controlled enterprises are “foreign officials” under the FCPA.

See here for the motion to dismiss in U.S. v. Stuart Carson, et al.

See here for my declaration.

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President's Day

Today is President's Day.

This post highlights the role of Gerald Ford, Jimmy Carter, Ronald Reagan, and William Clinton in enactment and subsequent development of the FCPA.

Ford

After watching Congress investigate and hold hearings on the foreign payments problem for approximately nine months, in March 1976 President Ford issued a “Memorandum Establishing the Task Force on Questionable Corporate Payments Abroad” (see here).

The great debate at this time was whether the foreign payments problem should be addressed through a disclosure regime or through a criminalization regime. The Ford Administration favored the former and in June 1976, Ford released “Remarks Announcing New Initiatives for the Task Force on Questionable Corporate Payments Abroad.” (see here). As noted in the remarks, Ford directed the task force "to prepare legislation that would require corporate disclosure of all payments made with the intention of influencing foreign government officials."

Certain bills were introduced in Congress consistent with Ford's vision and in August 1976 Ford issued “Foreign Payments Disclosure – Message From the President of the United States Urging Enactment of Proposed Legislation to Require the Disclosure of Payments to Foreign Officials.” (see here).

Neither Ford's proposal, or any other, was enacted by Congress prior to the 1976 elections in which Ford was defeated by Jimmy Carter.

Carter

Unlike the Ford Administration, the Carter administration favored the criminalization regime that was under consideration in the prior Congress and a movement that soon picked up speed when Congress reconvened in January 1977.

Certain members of the Carter administration testified at Congressional hearings throughout 1977 in favor of the criminalization regime and in December 1977, S. 305 (the Foreign Corrupt Practices Act of 1977 and the Domestic and Foreign Investment Improved Disclosure Act of 1977) was presented to President Carter.

On December 20, 1977, President Carter signed S. 305 into law - see here for his signing statement.

Reagan

As noted in this previous post, President Reagan's administration very soon sought decriminalization of foreign payments subject to the FCPA. During the Reagan administration (1981-1989), numerous efforts were made in Congress to amend the FCPA. Soon after the FCPA was enacted, it was widely recognized that the FCPA had addressed a serious problem, but that the statute created much uncertainty and was, in the minds of many, unworkable.

Among other things, the FCPA antibribery provisions enacted in 1977 contained a broad knowledge standard (“reason to know”) applicable to indirect payments to “foreign officials”; (ii) did not contain any affirmative defenses; and (iii) did not contain an express facilitating payments exception. Beginning in 1980, various bills were introduced - either as stand alone bills or specific titles to omnibus trade and export bills - that sought to amend the FCPA. This legislative process took eight years.

In August 1988, President Reagan signed H.R. 4848 the Omnibus Trade and Competitiveness Act of 1988. Title V, Subtitle A, Part I of the Act was titled “Foreign Corrupt Practices Act Amendments.” President Reagan's signing statement does not refer to the FCPA amendments buried in the omnibus trade bill. Among the amendments were a revised knowledge standard applicable to indirect payments and the creation of affirmative defenses and an express facilitating payment exception.

Clinton

In November 1998, President Clinton signed S. 2375, the "International Anti-Bribery and Fair Competition Act of 1998." Among other things, the Act amended the FCPA by (i) creating a new class of persons subject to the FCPA - "any person" not an issuer or domestic concern to the extent such person's bribery scheme has a U.S. nexus; and (ii) creating a new alternative nationality jurisdiction test for U.S. issuers and domestic concerns.

See here for President Clinton's signing statement.

Will President Obama play a role in FCPA history?

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Friday Roundup

Fear mongering and the dark empire, FCPA scrutiny of Hamid Karzai's brother, the DOJ's kleptocracy unit takes shape, and survey findings ... it's all here in the Friday roundup.

Fear Mongering and the Dark Empire

What does Sharie Brown (here), Chair of DLA Piper's Foreign Corrupt Practices Act, Anti-Corruption and Corporate Compliance Practice, think about the U.K. Bribery Act, the surge in FCPA Inc., and the revolving door? See here for a recent interview with Corporate Crime Reporter.

A Future Afghanistan Related FCPA Enforcement Action?

A federal grand jury in the Southern District of New York is reportedly hearing evidence against Mahmood Karzai (a dual Afghan and U.S. citizen and the brother of Afghan President Hamid Karzai) including possible evidence that Afghan Investment Co. (incorporated in Virgina until 2010) bribed Afghanistan's then mining minister to secure a lease on the country's only cement factory. See Matthew Rosenberg "Grand Jury Investigates Karzai Brother) (Wall Street Journal - Feb. 16th).

If evidence exists that Karzai did indeed violate the FCPA, one can only imagine the political / foreign policy considerations of criminally indicting the brother of the Afghan President. I like to think that the government blindly goes where the evidence leads them, but the BAE and James Giffen enforcement actions suggests that may not always be the case.

To my knowledge, there has never been an FCPA enforcement action involving conduct in Afghanistan.

DOJ Kleptocracy Unit

Joe Palazzolo (Wall Street Journal Corruption Current) recently spoke with several officials involved in the DOJ's nascent kleptocracy unit. See here for previous discussion and other links regarding the kleptocracy initiative.

Palazzolo reports (here) that the unit will be housed in the DOJ's Asset Forfeiture and Money Laundering Section and staffed by five lawyers. The FBI's Asset Forfeiture and Money Laundering Unit will also divert two agents to the new unit. According to the report, "U.S. officials expect that most cases will involve foreign politicians who have left office and are no longer in a position to obstruct investigations." Palazzolo reports that the unit's "first major case could be ready in the next month and several more are expected this year."

Survey Findings

Among the findings in Deloitte and Forbes Insights 4th annual "Look Before You Leap" survey (here) is the following:

"Almost two-thirds (63%) of total survey respondents identified Foreign Corrupt Practices Act (FCPA) and anti-corruption issues that led to an aborted deal or a renegotiation over the past three years. Lack of transparency or unusual payment structures in contracts was cited by one in five and 18% pointed to the use of agents, consultants, distributors, or third parties to obtain or facilitate business."

The survey results indicate that strategic buyers are more impacted (and perhaps more sensitive to FCPA issues) than financial buyers such as private equity firms and hedge funds.

*****

A good weekend to all.

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State of the Union February 17, 2011

Feb 17, 2011 online at www.uawlocal2250.com

From Chairman Mike Bullock: The addition of a partial crew on 2nd shift body shop has generated returns of 30 of our members. 24 of these returns will come from lay off. The first twelve will be returned on March 7, everyone up to and including seniority date 12/18/2000. The next twelve will be returned March 14, everyone up to and including seniority date 6/2/2008 with the tiebreaker being OGM date of 6/24/85. Management will be calling and sending letters to all those affected next week. These returns dates and seniority dates are all tentative and could change. The remaining 6 will come from those members who transferred to either Fairfax or Ft. Wayne under the basic relocation package (stay 6 mos.), 4 will come from Fairfax with a seniority date greater than 9/22/99 and 2 will come from Ft. Wayne with a seniority date greater than 9/16/99. The 24 returning from lay off had exhausted their sub benefits and most had exhausted their insurance benefits. They are all anxious to return. The 6 returning from out of state will all be reuniting with their families. Most have been going back and forth between their homes and plants on weekends for the previous 16 months.

From the Detroit Free Press: Honda is recalling nearly 700,000 Fit, Freed and City compact cars around the world for a defective spring part that may cause the engine to stall. No accidents have been reported related to the problem, but at least 72 complaints were filed in Japan, and 29 abroad, Honda Motor Co. spokesman Tomohiro Okada said today. Recalled are 167,000 vehicles in Japan, 156,000 in China, and 233,000 in the rest of Asia, Tokyo-based Honda said. About 122,000 cars are being recalled in North America. The spring was placed improperly in a small box inside the engine, so that, in some cases, the problem could cause the engine to stall, Okada said.

From Automotive News: General Motors is recalling over 44,000 Cadillac CTS sedans for a flaw that could cause one of the rear wheels to become unstable. The recall affects CTS vehicles from the 2009 and 2010 model years. GM said it would begin to notify owners of the vehicles covered by the recall. Dealers will inspect vehicles under recall and replace a potentially faulty rear toe link. GM said it expects to have to replace the part on about one in 20 of the vehicles covered by the recall. The automaker said it knew of no injuries or fatalities caused by a failure of the faulty part. Here are some excerpts from an article on the CNNMoney website entitled, “How the middle class became the underclass”: Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lightning speed. In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data. Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust. Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots. But there's more to the story. One major pull on the working man was the decline of unions and other labor protections, said Bill Rodgers, a former chief economist for the Labor Department, now a professor at Rutgers University. Because of deals struck through collective bargaining, union workers have traditionally earned 15% to 20% more than their non-union counterparts, Rodgers said. But union membership has declined rapidly over the past 30 years. In 1983, union workers made up about 20% of the workforce. In 2010, they represented less than 12%.
"The erosion of collective bargaining is a key factor to explain why low-wage workers and middle income workers have seen their wages not stay up with inflation," Rodgers said. Without collective bargaining pushing up wages, especially for blue-collar work -- average incomes have stagnated.

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SFO Flexing It Muscle Even Without the Bribery Act

In previous statements (see here for instance) U.K. officials have said that it would be wrong to assume that the U.K. was ignoring bribery issues prior to passage of the Bribery Act.

Case(s) in point - the recent enforcement actions announced by the Serious Fraud Office against MK Kellogg Ltd. and Mabey & Johnson directors.

MK Kellogg Ltd.

Yesterday, the SFO announced (here) that M.W. Kellogg Limited ("MKWL") has been ordered to pay "just over £7 million [approximately $11.2 million] in recognition of sums it is due to receive which were generated through the criminal activity of third parties."

This SFO enforcement action has been expected for some time, as noted in this previous post from October 2009.

MKWL was the entity that originally formed the TSKJ consortium the focus of the Bonny Island bribery scandal. See this post for current enforcement statistics as to KBR/Halliburton, Technip, and Snamprogetti / ENI.

MKWL is currently a wholly-owned subsidiary of KBR and as noted in this previous post as well as KBR's release (here) Halliburton has indemnification obligations to KBR in connection with the SFO enforcement action of "55% of such penalties, which is KBR’s beneficial ownership interest in MWKL."

According to the SFO release, "the SFO recognized that MKWL took no part in the criminal activity that generated the funds" but that the "funds due to MKWL are share dividends payable from profits and revenues generated by contracts obtained through bribery and corruption undertaken by MWKL's parent company and others." The SFO release notes that "MWKL was used by the parent company and was not a willing participant in the corruption."

As noted in the SFO release, the court order against MKWL was pursuant to the Proceeds of Crime Act 2002. What is the Proceeds of Crime Act? See this piece from John Rupp (Covington & Burling).

Richard Alderman, the Director of the SFO, stated in the release: "our goal is to prevent bribery and corruption or remove any of the benefits generated by such activities - this case demonstrates the range of tools we are prepared to use."

Mabey & Johnson Directors

In July 2009, the SFO brought an enforcement action against Mabey & Johnson Ltd. (a U.K. company that designs and manufacturers steel bridges). The conduct at issue involved allegations (that the company voluntarily disclosed) that it sought to influence decision-makers in public contracts in Jamaica and Ghana between 1993 and 2001. The prosecution also involved breaches of United Nations sanctions in connection with the Iraq Oil for Food program.

It was the first ever prosecution against a U.K. company for overseas corruption. See here and here for the prior post.

On February 10th, the SFO announced (here) that "two former directors ... of Mabey & Johnson Ltd. [Charles Forsyth and David Mabey] have been found guilty of inflating the contract price for the supply of steel bridges in order to provide kickbacks to the Iraqi government of Saddam Hussein."

According to the release, at the time of the offense, Forsyth was the Managing Director of Mabey & Johnson and Mabey was the Sales Director. The release notes that Richard Gledhill, a Sales Manager for contracts in Iraq, previously pleaded guilty. According to the release, all individuals are to be sentenced on February 23rd.

The U.S. has prosecuted numerous companies in connection with Iraqi Oil-For-Food fraud. See here for such allegations in the ABB matter, here for such allegations in the Innospec matter, here for such allegations in the General Electric matter.

However, these prosecutions have generally been corporate only prosecutions with few related enforcement actions against individuals.

In just its single Mabey & Johnson prosecution, the SFO would appear to have prosecuted more individuals than the U.S. has in its approximately 15 Iraqi Oil for Food corporate enforcement actions combined.

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State of the Union February 15, 2011

Feb 15, 2011 online at www.uawlocal2250.com

Reminder: The Election Committee election is today. Polls are open until 7 pm this evening at the Union Hall.

Union Meeting is tomorrow at 1 pm, 3 pm and 15 minutes after the longest first shift line time.

Raffle tickets are still being sold for the use of a VAP vehicle from Feb. 23 through Feb. 27. Tickets are $5 apiece or 3 for $10 and can be bought at Suggestions, Personnel or and VAP team member or PMN member. Proceeds will go to this year’s Make-A-Wish dream. Ticket sales will end this Friday, Feb. 18 and the drawing will be Monday, Feb. 21.

Nissan is revving up their marketing efforts for the NV full-size van. Wards Auto reports that Nissan is requiring 247 of its 1,058 U.S. dealers that have opted to sell the NV to meet a slew of prerequisites such as extended service hours, at least one 12,000 pound lift, a higher-than-average part-stocking level and priority service scheduling, in order to get the driver on his way as soon as possible. To get potential NV buyers into dealerships, Nissan – recognizing that people driving commercial vans spend a lot of time inside them – will advertise heavily on radio. The auto maker also is placing print ads in trade magazines, such as Plumbing Systems & Design and Builder, as well as in consumer magazines Entrepreneur, Smart Money and Fortune. NV buyers can design and submit a graphic for their van to Original Wraps via the dedicated website that’s been set up or opt for a no-charge upfit package. The latter includes shelving or a partition, or a partition and interior or exterior utility rack. Adrian Steel, in Adrian, MI, is Nissan’s partner for the no-charge upfit, which also can be configured via the dedicated website. Sales begin in March.

From Automotive News: Nissan Motor Corp.'s operating profits in North America slid 25 percent in the latest quarter despite a double-digit surge in new-car sales. Results were undercut by the Japanese yen's steady climb against the dollar and lower sales of returned leased vehicles in the United States. Operating profit fell to ¥48.9 billion, or about $599.7 million, in the fiscal third quarter ended Dec. 31, from $798.4 million a year earlier. North American sales, by contrast, climbed 21 percent to 310,430 vehicles in the period. In the United States, Nissan sold 234,869 units, 24 percent more than the year before.

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Egypt - A Country Sweep?

As has been widely reported, various countries have frozen (or have been asked to freeze) the assets of former President Hosni Mubarak and other former top officials. See here for Samuel Rubenfeld's roundup at Wall Street Journal Corruption Currents.

Were any of the billions or millions of Mubarak's assets, or those of other former top officials, obtained because of Foreign Corrupt Practices Act violations?

That is the question posed by a reader who notes that corruption investigations generally follow regime change.

During Mubarak's regime, several FCPA enforcement actions alleged conduct involving (in whole or in part) Egypt such as Lockheed, Metcalf & Eddy, Textron, United Industrial Corporation, York, and Daimler.

It is one thing to allege conduct implicating low-ranking "foreign officials" or employees of state-owned or state-controlled entities.

It is quite another to investigate conduct involving top officials of a government generally viewed as an ally in a volatile area of the world. Such barriers would seem to be removed with Mubarak's ouster and an investigation may now even be viewed as a way to further U.S. relations with a new Egyptian government.

The reader asks, will Mubarak's removal result in FCPA floodgates being opened in Egypt?

The past few years have witnessed certain "industry sweeps." Will a "country sweep" be next?

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Acquiring a Deferred Prosecution Agreement

In November 2010, Pride International Inc. was one of several companies to resolve a coordinated FCPA enforcement action involving (at least in part) the use of Panalpina services.

As noted in this prior post, the Pride enforcement action included not only Nigeria - Panalpina related conduct, but also conduct relating to contract extensions in Venezuela, bribing an administrative law judge in India, customs duties in Mexico, as well as other improper conduct in other countries.

The enforcement action involved both a DOJ and SEC component. Total settlement amount was approximately $56.2 million ($32.6 million criminal fine via a DOJ plea agreement and deferred prosecution agreement; $23.5 million in disgorgement and prejudgment interest via a SEC settled complaint).

The three year DPA (here) imposed on Pride a host of compliance undertakings including reporting to the DOJ on an annual basis (during the term of the DPA) "on its progress and experience in maintaining and, as appropriate, enhancing its compliance policies and procedures."

On February 7th, Pride announced (here) a definitive merger agreement by which U.K. based Ensco (plc) will acquire Pride in a cash and stock transaction expected to close in the second quarter of 2011. The release states as follows. "The transaction will create the second largest offshore driller in the world with 74 rigs spanning all of the strategic, high-growth markets around the globe."

So what will happen to Pride's DPA obligations?

A common clause in DPA's is a sale or merger clause.

In the Pride DPA, it states as follows.

Sale or Merger of Pride International

"Pride International agrees that in the event it sells, merges, or transfers all or substantially all of its business operations as they exist as of the date of this Agreement, whether such sale is structured as a stock or asset sale, merger or transfer (including the sale, merger, or transfer of unincorporated branches), it shall include in any contract for sale, merger or transfer a provision binding the purchaser, or any successor in interest thereto, to the obligations described in this Agreement."

Sure enough, Section 5.15 of the "Agreement and Plan of Merger" (here) states as follows.

"Deferred Prosecution Agreement. Effective as of the Effective Time, Parent [Ensco] agrees to be bound, and the Surviving Entity shall continue to be bound, by the obligations of the Company [Pride] set forth in the Deferred Prosecution Agreement, dated November 4, 2010, between the Company and the U.S. Department of Justice, to the extent required thereby."

Pride's FCPA compliance obligations and undertakens may not be the only FCPA-related issues on Ensco's plate.

Ensco has ADR's traded on the U.S. market and "following disclosures by other offshore service companies announcing internal investigations involving the legality of amounts paid to and by customs brokers in connection with temporary importation of rigs and vessels into Nigeria, the Audit Committee of our Board of Directors and management commenced an internal investigation in July 2007."

Ensco's most recent quarterly filing (here) states as follows.

"Our internal investigation has essentially been concluded. Discussions were held with the authorities to review the results of the investigation and discuss associated matters during 2009 and the first half of 2010. On May 24, 2010, we received notification from the SEC Division of Enforcement advising that it does not intend to recommend any enforcement action. We expect to receive a determination by the United States Department of Justice in the near-term. Although we believe the United States Department of Justice will take into account our voluntary disclosure, our cooperation with the agency and the remediation and compliance enhancement activities that are underway, we are unable to predict the ultimate disposition of this matter, whether we will be charged with violation of the anti-bribery, recordkeeping or internal accounting control provisions of the FCPA or whether the scope of the investigation will be extended to other issues in Nigeria or to other countries. We also are unable to predict what potential corrective measures, fines, sanctions or other remedies, if any, the United States Department of Justice may seek against us or any of our employees."

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State of the Union February 14, 2011

Feb 14, 2011 online at www.uawlocal2250.com

From Chairman Mike Bullock: Management has asked the union for a meeting at 2:30pm today to discuss the possibility of adding a 2nd shift partial crew to the body shop. These talks were initially held 6 months ago but management elected at that time not to proceed. There are many issues to be resolved before this could be implemented. More to follow. The shop committee was in Detroit, MI at the quarterly sub-council meetings of production and skilled trades. I will give a full report at the union meeting on Wednesday. The following is some of the info that came from these meetings: VP Joe Ashton said that an announcement of profit sharing will come today. He remarked several times that the amounts that have been rumored in the media was inaccurate, that the amount will “far exceed” what we received in 1999, which was $1775. It since has been announced the amount and the email is on the back. It will be paid on your weekly payroll check on March 25. It will be flat taxed at 20%. You had to have worked 1850 hours in 2010 for a full share and at least 1 week for a partial share. For those that have PSP accounts, the declaration that you previously made is still in effect, you will have until February 28 to change. It can be changed by going online at www.gmbenefits.comor calling 1-800-489-4646.

There are currently 51,166 union members working at GM facilities: 39,919 production and 9,895 skilled. If you know anyone who received a car voucher with their retirement attrition package and they have not used it, let them know that they expire at the end of February 2011.

This is how Short Work Week sub benefits were calculated for week ending February 6. All available hours for Monday, January 31, count towards the 40, along with 10.3 for Thursday and 10.3 Friday. Short Work Week makes up the rest.

Message from Joe Ashton and Cathy Clegg

Dear UAW-GM Team –

In 2010, we saw a lot of progress made by our company. During the year, we announced investments in 13 U.S. plants totaling more than $2.5 billion and we created or retained more than 4,500 jobs. We witnessed our company’s return to the New York Stock Exchange. We also saw products built by the UAW-GM team win awards for quality and steadily gain market share: the Buick LaCrosse, Chevy Traverse, Cadillac CTS Coupe, Chevy Silverado HD, Chevrolet Volt, Chevy Cruze and Chevy Suburban to name a few.

We all remember the extraordinary effort it took to help GM survive and recover from the global economic crisis. Restructuring our company and changing our business model was extremely difficult, but we are beginning to see that the hard work and dedication of this team is helping to create a healthier GM, which benefits employees, our customers and the many others who depend on our success.

Therefore, we are pleased to announce that our business results are expected to generate a profit-sharing payout of upwards of $4,000 per-employee for the GM plan, and $3,000 per-employee for the GM Component Holdings plan, as dictated by the formula in their respective national agreements. This payout is a good example of how we are sharing in the success of the New GM. The final average payout per-employee will be communicated during the earnings release in late February.

We know that 2011 is an important year for both the UAW and GM with contract talks approaching. We look forward to getting a contract that is beneficial to both employees and the company.

Thank you again for your efforts.

Cathy
Joe

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State of the Union February 10, 2011

Feb 10, 2011 online at www.uawlocal2250.com

The Election Committee election will be held Tuesday, Feb. 15. Polls will be open from 5 am to 7 pm at the Union Hall. If a runoff is needed it will be held Tuesday, Feb. 22 from 5 am to 7 pm.

From the Wall Street Journal: Ford Motor Co. on Thursday said it would take a charge to its first-quarter earnings and use cash or shares to shave $3 billion in debts as the auto maker takes another step toward its goal of regaining an investment-grade credit rating. The conversion, scheduled for March 15, could lower the company's outstanding automotive debt to $16.1 billion while reducing its annual interest rate expense by $190 million, the company said. It spent $1.8 billion on interest expense last year. Ford's total automotive debt at the end of 2009, excluding Ford Motor Credit Co., was $34.3 billion. The auto maker has since taken steps including redemptions and restructuring to pare its debt, leaving it with an automotive debt of $19.1 billion at the end of 2010. By comparison, General Motors had $8.6 billion in outstanding debt as of Sept. 30.

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Birmingham

Jean Petit decided in the early 1780s to move to Birmingham and the first mention of him being in the city is in The New Directory for the Town of Birmingham 1785.  He is listed as follows:

- John Petit Toy Shop  No 7 High Street

A similar listing can be found in each directory to the year 1811 after which no entries have been found.  Perhaps as he was well into his 60s he had retired.

It is interesting to understand that a Toy Maker in the 18th century was not someone who made toys as we know today.  From my Father's notes of 1981 he wrote as follows:

"The word toy derives from the French word 'toie' possibly a variant of 'tie' or 'tye' meaning a small metal box or casket.  In the context of 1785 it would cover belt and shoe buckles, chatelaines, snuff boxes, bonbonnieres, scent bottles etc."

The first steel-toy maker to go in for making pen nibs appears to have been Mr Gillott in 1822, who decided to add them to his products and turn them into a commercial product.  Prior to this time a steel pen nib had been extremely expensive and quills were generally used. In 1828 Mr Gillott invented a self-acting pen-machine driven by steam and by 1850 it was necessary for him to enlarge his factory in Birmingham due to the success of steel pens.

With the above information in mind it is not difficult to understand, how in time, an ancestor who was a steel-toy maker/seller would have a descendant who would also make pen nibs.

However, back to 1785 when John Petit was trading as a toy-maker in Birmingham.  In 1786 John married Elizabeth Jago (who was 35 years old) at St Peter's Church Harborne  Birmingham.  They had 6 sons, two dying very young.  It was their son Francis Petit who was to become the Father of Joseph Letiere Petit, my great, great grandfather who worked with Mr Brandauer in the 19th century.

It is a strange coincidence that approximately 100 years after John Petit married in St Peter's Church  Harborne his great grandson, Canon Oliver Petit (b 1872) was for many years vicar of the same Church in the early 1900s.  I wonder if he knew?

Finally, I am proud that my ancestors have been associated with living and working in Birmingham for 226 years, long may it continue.

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Heating Up North of the Border

In its July 2010 Progress Report on the Enforcement of the OECD Convention (here), Transparency International ("TI") called Canada one of its "most disappointing" findings given "little or no enforcement" of Canada's FCPA like-statute, the Corruption of Foreign Public Officials Act ("CFPOA")

Among other things, Canada was found to have an insufficient definition of a foreign bribery offense, jurisdictional limitations as to its statute, inadequacies in its enforcement system, and lack of awareness raising in the country as to foreign corruption issues.

The TI Report quoted Bruce Futterer (a TI Canada expert) as saying - “One is left with the impression that the enforcement of anti-bribery and foreign corruption legislation is not a high enough priority with the Canadian federal government and that more could be done both in terms of strengthening the existing legislation and allocating greater human and financial resources to the education and enforcement of the CFPOA.”

Against this backdrop, TI Canada's January 31st press release (here) caught my eye. Without providing a source, the release states as follows: "The recent revelation from the RCMP Sensitive Investigations and International Anti- Corruption Unit that 23 CFPOA investigations are underway means that, 'Canadian companies can no longer hide behind the world’s perception that business is done here in a completely ethical manner.'"

From little to no enforcement to 23 active investigations, that is big news north of the border.

For more see here.

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Tyson Foods Settles FCPA Enforcement Action Involving Mexican Veterinarians And Their No-Show Wives

Yet another FCPA enforcement action raises the issue of whether the FCPA's "obtain or retain business" element means anything anymore or whether the FCPA, contrary to Congressional intent, has morphed into an all-purpose corporate ethics statute and - in a game of chicken - companies opt to settle rather than mount a legal defense.

Yesterday, Tyson Foods, one of the world's largest processors of chicken and other food items, agreed to resolve an FCPA enforcement action focused on payments to Mexican veterinarians (and their no-show wives) responsible for certifying product for export.

The enforcement action involved both a DOJ and SEC component. Total settlement amount was approximately $5.2 million ($4 million criminal fine via a DOJ deferred prosecution agreement; $1.2 million in disgorgement and prejudgment interest via a SEC settled complaint).

DOJ

The DOJ enforcement action involved a criminal information (here) against Tyson resolved through a deferred prosecution agreement (here).

Criminal Information

The information contains a background section which describes the following.

"The Government of Mexico administers an inspection program, Tipo Inspeccion Federal ("TIF"), for meat-processing facilities. Any company that exports meat products from Mexico must participate in the inspection program, which is supervised by an office in the Mexican Department of Agriculture ("SAGARPA"). The inspection program at each facility is supervised by an on-site veterinarian who is a government employee ("TIF veterinarian"), paid by the state, who ensures that all exports are in conformity with Mexican health and safety laws." "There are two categories of TIF veterinarians: 'approved' and 'official.' Although all TIF veterinarians are foreign officials under the FCPA, Mexican law permits approved veteriarians to charge the facility in which they work a fee for their services in addition to their offcial salary. Official veterinarians receive all of their salary from the Mexican government and may not be paid by the facility they supervise."

The conduct at issue focuses on Tyson de Mexico ("TdM"), a wholly-owned subsidiary of Tyson that produces protein-based and prepared food products for sale in Mexico and foreign countries other than the U.S. TdM is headquartered in Mexico and maintains three meat-processing factories in Mexico.

The information charges that from July 2004 through November 2006, Tyson, TdM, and others were engaged in a conspiracy to "assist Tyson and TdM in the export of meat products from Mexico through the payment and promise of payment of things of value to Mexican government-employed TIF veterinarians, in order to obtain or retain business for TdM by influencing the decisions of veterinarians responsible for certifying TdM products for export under the TIF Program."

The information does not give any detail as to how the payments sought to influence the veterinarians nor does it suggest that the product at issue was not qualified for export. In fact, as detailed below, Tyson's press release (a release the DOJ had to approve per the deferred prosecution agreement) states that there were no issues with the safety of the exported products.

Among other things, the information alleges that part of the conspiracy was "to place the wives of the TIF veterinarians on TdM's payroll, providing them with a salary and benefits, knowing that the wives did not actually perform any services for TdM ...". According to the information, upon "termination of the salaries to the wives of the TIF veterinarians" in November 2006 Tyson "agreed to increase the amount paid to the veterinarians based on false invoices by the same amount as the salaries previously paid to their wives."

The information alleges that the above payments were falsely recorded on company books and records as "professional fees" and salaries in order to conceal the true nature of the improper payments in the consolidated books and records of Tyson.

In addition to the above described payments, the information also alleges that from the time Tyson acquired TdM in 1994 through 2006, "Tyson made occassional additional improper payments to the TIF veterinarians on an ad-hoc basis."

Under the heading "Total Improper Payments" the information alleges as follows:

"Tyson, its executives, and its subsidiaries authorized the payment, directly or indirectly, of approximately $90,000 to Mexican government-employed veterinarians, in order to obtain or retain business for TdM by influencing the decisions of veterinarians responsible for certifying TdM products for export under the TIF program, resulting in profits of approximately $880,000."

In addition, the information alleges that from the time of Tyson's acquisition of TdM until May 2004, "an additional $260,000 in improper payments were made to the TIF veterinarians, both indirectly and directly, including through payments to wives of TIF veterinarians."

Based on the above allegations, the information charges Tyson with conspiracy to violate the FCPA and substantive FCPA anti-bribery violations.

DPA

The DOJ's charges against Tyson were resolved via a deferred prosecution agreement.

Pursuant to the DPA, Tyson admitted, accepted and acknowledged that it was responsible for the acts of its officers, employees, agents, and wholly-owned subsidiaries as set forth above.

The term of the DPA is two years and it states that the DOJ entered into the agreement "based on the following factors":

(a) Tyson voluntarily disclosed the misconduct;

(b) Tyson conducted a thorough internal investigation of the misconduct;

(c) Tyson reported all of its findings to the Department;

(d) Tyson cooperated in the Department's investigation of the matter;

(e) Tyson has undertaken certain remedial measures;

(f-g) Tyson has agreed to continue to cooperate with the Department and the SEC in any investigation of the conduct of Tyson and its directors, offcers, employees, agents, consultants, subsidiaries, contractors, and subcontractors relating to violations of the FCPA; and

(h) with respect to the corporate compliance reporting obligations, the Department considered the following facts and circumstances: (i) Tyson has already engaged in signficant remediation related to the misconduct and implemented an enhanced compliance program; (ii) approximately 85-90% of Tyson's sales are domestic; (iii) Tyson operates only six wholly-owned production facilities overseas, three in Mexico and three in Brazil, all of which have been subjected to rigorous FCPA reviews; (iv) Tyson's only direct government customers are domestic; and (v) the problematic operations in TdM comprised less than one percent of Tyson's global net sales.

As stated in the DPA, the fine range for the above described conduct under the U.S. Sentencing Guidelines was $5.04 to $10.08 million. Pursuant to the DPA, Tyson agreed to pay a monetary penalty of $4 million (approximately 20% below the minimum amount suggested by the guidelines).

Pursuant to the DPA, Tyson agreed to self-report to the DOJ "periodically, at no less than six-month intervals" during the term of the DPA "regarding remediation and implementation of the compliance activities" described in the DPA. Given the factors the DOJ set forth in (h) above, this reporting obligation is a bit of a surprise.

As is standard in FCPA DPAs, Tyson agreed not to make any public statement "contradicting the acceptance of responsibility" as set forth in the DPA and Tyson further agreed to only issue a press release in connection with the DPA if the DOJ does not object to the release.

In the DOJ's release (here) Assistant Attorney General Lanny Breuer stated as follows: “Tyson Foods used false books and sham jobs to hide bribe payments made to publicly-employed meat processing plant inspectors in Mexico - the penalty and resolution announced today reflect the company’s disclosure of this conduct, its cooperation with the government’s investigation and its commitment to implementing enhanced controls.”

SEC

The SEC's civil complaint (here) is based on the same core conduct described above.

The complaint alleges that Tyson "authorized" TdM's illicit activities and that "in connection with these improper payments, Tyson Foods failed to keep accurate books and records and failed to have effective internal controls, as the true nature of the payments were concealed through salary payments to phantom employees and through service invoices submitted by one of the veterinarians."

According to the SEC, "Tyson Foods realized net profits of more than $880,000 from export sales from [TdM] facilities in fiscal years 2004, 2005 and 2006.

Based on the above conduct, the SEC charged Tyson with FCPA's anti-bribery violations and FCPA books and records and internal control violations.

Without admitting or denying the SEC's allegations, Tyson agreed to an injunction prohibiting future FCPA violations and agreed to pay $1.2 million in disgorgement and pre-judgement interest.

In the SEC release (here), Robert Khuzami (Director of the SEC's Division of Enforcement) stated: “Tyson and its subsidiary committed core FCPA violations by bribing government officials through no-show jobs and phony invoices, and by having a lax system of internal controls that failed to detect or prevent the misconduct."

Laurence Urgenson (here) of Kirkland & Ellis represented Tyson.

Tyson's press release (here) notes, among other things, that its voluntary disclosure occured in early 2007 and that "none of the products exported from Tyson de México during the time period involved were shipped to the U.S., nor were there any issues with the safety of the products."

David Van Bebber, the company's Executive Vice President and General Counsel stated as follows: “We’re committed to abiding by the law as well as our company’s Core Values, which call on all of our people to operate with integrity. While we’re disappointed mistakes were made, corrective action has been taken and the improper payments were discontinued. As our international operations have expanded, we continue to strengthen the compliance efforts of our international businesses including improved training and compliance programs, extensive retraining, and anti-corruption focused audits.”

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State of the Union February 10, 2011

Feb 10, 2011 online at www.uawlocal2250.com

Reminder: There is a Women’s Committee meeting and a Veteran’s Committee meeting today after first shift at the Union Hall. And remember, tomorrow is “White Shirt Day” so wear your white shirts to commemorate the first UAW contract with GM.

We have been informed by management that there will be no layoffs this Friday due to fluctuations in manpower.

Raffle tickets are still being sold for the use of a VAP vehicle from Feb. 23 through Feb. 27. Tickets are $5 apiece or 3 for $10 and can be bought at Suggestions, Personnel or and VAP team member or PMN member. Proceeds will go to this year’s Make-A-Wish dream.

You may have noticed some large numbers for the days supply of vans in the field. Overall field supplies are indeed up in total stock (+ 794) but net field stock is down. Within those numbers, the GMC cutaway has a 488 day supply, but this number is impacted by a near doubling of the number of those cutaways – from 789 to 1417 – as well as a slow month for that particular model ( 90 units). Marketing Manager Andrew Reyntjes said, “We know that some large GMC customer’s cutaways are having bodies fitted and we therefore expect a strong GMC Fleet delivery result in February as these bodies are fitted and officially recorded as deliveries for February.” Another oddity with this month’s numbers is GMC cargo vans. While net field stock is down 68 units, the days supply has gone from 75 to 111. This is once again due to a low month for that particular model. These are reasons why the days supply numbers are not the best indicator of field supplies for our van.

From Automotive News: The long-rumored high-performance Chevrolet Camaro -- wearing the ZL1 badge -- made its debut yesterday at the Chicago Auto Show. The Camaro ZL1 packs GM's supercharged 6.2-liter V-8, rated at 550 hp. It's mated to a six-speed manual transmission with dual-disc clutch system. Other goodies include a magnetic ride control system and a hood with carbon fiber vents. The ZL1 also marks the introduction of a new electric power steering system to the Camaro, Chevrolet said in a release. Development of the Camaro ZL1 will continue through 2011 with a launch intended for January 2012.

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Without Admitting or Denying

It's not an FCPA specific issue, but it's certainly an FCPA enforcement issue.

A company is the subject of a SEC FCPA enforcement inquiry.

A civil complaint is generally filed, and then, on the same day, the company "without admitting or denying" the SEC's allegations agrees to resolve the case.

See here for the recent SEC FCPA enforcement action against Maxwell Technologies.

At PLI's "SEC Speaks" event last week, SEC Commissioner Luis Aguilar shared (see here) his "wishes for 2011" including "the Enforcement Division must bring cases with obvious deterrent effect."

Commissioner Aguilar stated as follows:

"As we work to build a pro-active regulator, my second wish is that the SEC Division of Enforcement brings cases that have obvious deterrence value. I know that this is a wish that is shared by our Enforcement staff. This means that when the Commission announces the resolution of a matter we would notice a reaction that we haven’t always witnessed.

I envision a world where when the SEC announces a settlement in a high profile case, its impact is clearly noted — and leaves little doubt that it will make people that are engaged in similar activities think twice. An enforcement action by the SEC should be serious business, and it should cause an organization to seriously review how it has been operating. Moreover, our enforcement actions should have market-wide impact, and there should be sanctions that are significant enough to stop similar conduct in its tracks. The possibility of being sanctioned by the Commission should not be considered part of the cost of doing business.

I envision a world where our remedies are calibrated to be meaningful, not merely routine - and where federal judges can clearly see that the SEC understands its mission and seeks to protect investors and deter wrongdoers by obtaining appropriate sanctions and meaningful deterrence.

An additional wish for 2011 is to see defendants take accountability for their violations and issue mea culpas to the public. I hope that 2011 brings an end to the press release issued by a defendant after a settlement explaining how the conduct was really not that bad or that the regulator over-reacted. I hope that this revisionist history in press releases will be a relic of the past. If not, it may be worth revisiting the Commission’s practice of routinely accepting settlements from defendants who agree to sanctions “without admitting or denying” the misconduct." (emphasis added).

I agree. It is worth revisiting this central feature of SEC settlements.

The policy was first adopted in 1972 (see here) and states as follows.

"The Commission has adopted the policy that in any civil lawsuit brought by it or in any administrative proceeding of an accusatory nature pending before it, it is important to avoid creating, or permitting to be created, an impression that a decree is being entered or a sanction imposed, when the conduct alleged did not, in fact, occur. Accordingly, it hereby announces its policy not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings. In this regard, the Commission believes that a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations."

The resolution policy can lead to absurd results (see here).

In the FCPA context, I submit this SEC resolution policy contributes to a "facade of enforcement" and results in companies resolving an SEC FCPA enforcement action notwithstanding dubious or untested legal theories and regardless of valid and legitimate defenses.

Why?

It is simply easier and more cost efficient to settle an enforcement action "without admitting or denying" the SEC's allegations than to engage in long protracted litigation with a primary regulator.

My recent "Facade of FCPA Enforcement" piece (here) contains a discussion of the SEC v. Bank of America case. Although not an FCPA case, the party's briefs provide valuable insight into the same SEC enforcement procedures used in FCPA enforcement actions and the motivations of settling parties in a government enforcement action. Even the SEC noted in that case that "the terms of a reasonable settlement do not necessarily reflect the triumph of one party's position over the other."

Thus, I agree with Commissioner Aguilar that it is worth revisiting the Commission’s practice of routinely accepting settlements from defendants who agree to sanctions “without admitting or denying” the misconduct.

This policy contributes to a "facade of enforcement," including in the FCPA context, and the starting analysis should be - why did the Commission adopt this policy in the first place?

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State of the Union February 9, 2011

Feb 9, 2011 online at www.uawlocal2250.com

February is Women’s Heart Health month. There is a Women’s Committee meeting Thursday, Feb. 10 after first shift at the Union Hall. There is also a Veteran’s Committee meeting Thursday, Feb. 10 after first shift at the Union Hall.

From the Education Committee: Let us not forget that this Friday, Feb. 11 is “White Shirt Day”. This is the day back in 1937 that GM and the UAW negotiated our first contract. Be sure to wear your white shirt or white T-shirt.

Reports of potential profit sharing payouts are sprouting up all over the media. The familiar “unnamed sources” are providing the information. The Wall Street Journal and Bloomberg reported $3000 or more. A Detroit Free Press article raised that to $3200. UAW Vice President Joe Ashton said yesterday that this year’s payment will “far exceed” any payment we have gotten before. GM spokeswoman Kim Carpentersaid the automaker has to complete its 2010 accounting before it can finalize its profit-sharing amount. Due to SEC regulations regarding “quiet periods” prior to earnings reports, no one can officially state the amount. We should get the official word next Monday, Feb. 14, and we will communicate the amount as soon as it is announced. We should also get word then about the possibility of putting any or all of the amount in your PSP.

There has been a lot of Toyota news lately. As most of you have already heard, the NHTSA was unable to find any evidence that electronics were at fault in sudden unintended acceleration events in Toyota vehicles. They continue to blame floor mats and faulty accelerator pedals. Earlier this week, Toyota reported quarterly operating profit that was down 48 % versus last year, even as other makers report improved earnings (Honda is expected to out earn Toyota for a third straight year and Nissan profits are up 78% and within spitting distance of the much larger Toyota). Once again the strong yen is a major culprit in falling earnings as Toyota imports far more vehicles into the U.S. than either Honda or Nissan. With each one yen of appreciation Toyota loses over $350 million. They are using a target of 86 yen per dollar, even though it is trading at 82 and has gotten as strong as 80. And one more thing – almost three-fourths of Toyota’s earnings are coming from the finance side…

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Is There A Difference?

In September 2010, during the sentencing of Nam Quoc Nguyen, one of the Nexus Technology defendants (see here for the post on the sentences), the DOJ called to the witness stand the former U.S. commercial attache from Vietnam who was asked to testify as to the "seriousness of the offense as it impacts Vietnam." (See here for relevant portions of the sentencing transcript).

While in Vietnam, the commercial attache oversaw a staff of about ten in delivering services to American companies to help them grow their exports and he managed an advocacy portfolio in Vietnam to assist U.S. companies in selling directly to the Vietnam government. The individual testified that his group "constantly advise[d] companies on strategies to enter the market, to bid on government contract, to win business."

The former commercial attache described Vietnam as a "corrupt country" and the DOJ presumably expected the individual to stay on message as to how corruption in Vietnam is not a victimless crime and to describe who suffers from corruption in Vietnam. He did that.

But the individual drifted it seemed in his testimony and said, "I make no bones about it. It's very difficult to do business in Vietnam. It's not very transparent but American companies are making money and there are a number of strategies that companies can follow."

The individual was asked "is it possible to do business in Vietnam without paying bribes." He answered "it is."

One of the strategies he discussed was the following.

"Often it [obtaining Vietnamese government business] may require a personal visit by the Ambassador or another high-ranking official to a government official or an official of a state-run enterprise. It could take the form of a letter from a high-ranking U.S. government official to another official in the Vietnamese government or state-owned enterprise." (See pg. 68).

The individual then specifically talked about a $180 million commercial satellite contract Lockheed Martin was awarded by Vietnam Post and Telematics Group (a "major state-owned enterprise"). See here for Lockheed's press release.

According to the individual's testimony, Lockheed (he described the company as "one of our clients") "was in a competitive position to provide $180 million commercial satellite to one of the major state-owned enterprises, Vietnam Post and Telematics Group, VNPT."

At this point, even the judge asked the DOJ attorney, "what does this have to do with what you said you were calling this witness to tell us about?"

After an exchange between the judge and the DOJ attorney, the individual finished by saying. "The bottom line is, we have been able to help companies work through. In this particular case, a European country was offering payment with regards to winning the bid but the intervention of the Ambassador with the Chairman of VNPT and the Minister of Information Communications, was a critical element to help the company win the business, and they have stated as such."

According to this October 2010 article, Lockheed is among the "biggest corporate campaign contributors in U.S. politics."

Is there a difference between (a) when a company (or its employees) gives something of value to a foreign official to obtain or retain business with a foreign government; and (b) when a company (or its employees) gives something of value to U.S. political parties or candidates, or spends millions lobbying the U.S. government, and then the U.S. government assists the company obtain or retain business with a foreign government?

What about those U.S. diplomats that act as "marketing agents" for U.S. companies such as Boeing as recently profiled by the New York Times (here).

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State of the Union February 9, 2011

Feb 8, 2011 online at www.uawlocal2250.com

There is a Veteran’s Committee meeting Thursday, Feb. 10 after first shift at the Union Hall.

The Vehicle Advocate Program (VAP) starts tomorrow. If you were drawn to drive a vehicle, you need to go to the main security gate after your shift. They will have the vehicle pass and the keys to your vehicle. You will need to write the beginning and ending mileage on the vehicle pass form and you are encouraged to fill out the survey. When you return the vehicle it should be full of gas and as clean as can be expected. Then return the keys and the vehicle pass to main security. Even though drivers will have the vehicles multiple days, they need to return the keys every day as there are drive events scheduled during the day.

Reminder: Raffle tickets for the VAP vehicles from Feb. 23 – 27 are on sale and available from any VAP team member, PMN member or at Suggestion, Benefits or Personnel. Tickets are $5 apiece or 3 for $10 and the proceeds will go to this year’s Make-A-Wish dream.

From the Detroit News: General Motors Co.'s hourly workers can expect some of the largest profit-sharing checks ever, when the automaker pays bonuses for the money earned in 2010, a top union official said Monday. United AutoWorkers' Vice President Joe Ashton, who oversees the union's labor relations with GM, said the bonuses are likely to top the average $1,775 workers got for 1999, the company's biggest payout to date. "I would think so," he said. The union's leadership should get an exact amount around Feb.14, Ashton said, when the automaker is required by the UAW contract to report a figure to its top officials. GM officials will announce the final figure to rank-and-file workers separately. GM hasn't set a date for the announcement. "We don't have an exact number yet," said Ashton, speaking at an event held for U.S. Labor Secretary Hilda Solis at GM's Detroit Hamtramck plant. But when it's announced, it "will be one of the bigger ones, I'm sure." GM could top off the bonuses with incentive pay not required by the contract, but Ashton declined to say if that's been decided. "We've had conversations with GM, and I'm sure GM is looking at any opportunity to reward their workers," he said. The size of the bonuses, Ashton noted, could "set the tone" for the contract talks that begin this summer. The contract expires in September.

Here is the January sales report from Marketing Manager Andrew Reyntjes:
It is worth noting that this was our best G-Van January since 2008. We are also showing a dramatic 83.5% volume increase vs last January and more importantly a share increase of 7.58% vs our performance in January of 2010. Our segment share is currently at just over 40% so we are gaining ground on Ford. With two main players in the segment share swings are more volatile and given the fact that this is a strong commercial fleet vehicle a large delivery to a big customer can swing share results substantially. To this end we are going to be paying a lot of attention to large profitable commercial fleet customers this year and do whatever we can to win their business. As we enter 2011 we are going to be facing a new competitive entry. Nissan is launching its NPV van. Nissan is entering the commercial space with this entry. While not as capable as our offering in many areas it is new, with a fresh design, has a high roof and will have significant resources put behind it as Nissan breaks into the commercial business. In this month’s sales reporting presentation I have included pictures of a Nissan van that was on display at one of our largest customer's annual convention. The customer, Belron/Safelite, is a large volume customer and we work very hard to keep them happy whenever we can. Unfortunately we are not yet able to offer rear backup cameras or sensors on our G-van. While it is in the GM plan until 2013 or 2014 Nissan has it now and is exploiting this competitive advantage as it tries to break its way into the market. We need to be very careful and do whatever we can to prevent the defection of key commercial customers to Nissan.
In 2011 we have identified some areas of opportunity to increase our sales and share in the commercial passenger van market. Working with our Engineering partners we are hopeful of timely implementation of a running board solution and we are looking forward to leveraging our relationship with NHTSA to overturn a stigma on 15 Passenger vans that has been adopted from a NHTSA white paper on an unsafe competitive vehicle from a decade ago. Both of these initiatives will help us capture customers in the van pool, hospital, hospitality, residential care, ground transportation, family services, school & university, elderly care and municipal transport vocations. We are currently not performing very well in these vocations.
Continuing in 2011 will be our grassroots promotions aimed at small and medium businesses, as we create photographic and video assets we will utilize them internally but also offer them as a goodwill gesture to our commercial customers and dealers who may then use them in their advertising. We are continuing to push to include the Express with Chevrolet divisional incentives, promotions and advertising. Wherever possible we will involve our GM Media team. GM Media and Communications will be a valuable partner as we try to raise brand awareness and opinion. We will utilize them as we launch CNG, make use of our assets at trade shows, promotional and community events and for any awards such as our 2010 IntelliChoice Full-Size Van Best overall value award for the Express 1500.

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