GM CEO Gives Progress Update

During its government protected chapter eleven bankruptcy restructuring this past summer, the new General Motors Company set financial benchmarks which it now claims are attainable. However, many feel the risk is high considering the company’s recent bankruptcy and the unstable economic atmosphere.

GM says that its biggest concern is attracting new customers. Their approach has been bold, openly pitting their vehicles against the competition with their “May the Best Car Win” ad campaign. Under “Best Car”, GM offers a sixty-day money back guarantee to unsatisfied buyers of their vehicles. GM spokespersons contend that the risk is necessary in order to get the word out: their vehicles are equal or superior to their competitors.

By the end of this year, GM says it will be closing deals to sell both Saab and Hummer, and it is preparing for an initial public offering of its stock as early as next year.

In a recent recent report given by GM CEO Fritz Henderson, the mood and the message were positive. According to Henderson, in this first 90 days since emerging from bankruptcy, GM has placed itself on track to cut costs and reduce debt enough to become competitive with major rivals.

GM also reports their U.S. market share for the first half of 2009 was 19.5 percent, which is down from 21.4 percent at the same point last year. In order to gain market share, GM is counting heavily on new 2010 models like the Chevrolet Equinox, Buick LaCrosse, Chevrolet Camaro and Cadillac SRX.

One recent disappointment for GM was the dissolution of the deal to sell the Saturn brand to Penske Automotive Group. Henderson says they understand Penske’s reasoning, and reacted in the best interest of the company following the decision.

Saab and Hummer remain on the selling block. Barring any unforeseen obstacles, Koenigsegg Group AB will buy Saab by the end of the year, and Hummer will be sold to China-based, Sichuan Tengzhong Heavy Industrial Machinery Company.

Henderson also denied rumors that Ray Young is being replaced as CFO.

If GM’s sales predictions hold true, they will sell 11.5 million units during 2010. Their projections are based on initial economic indicators that point to recovery, but Henderson says the question now is what the rate of acceleration will be. The company is expected to post third-quarter financial results in November, when more details about the effects of its cost cutting efforts will be available.

Regarding GM’s goals, Henderson said, “We’re well on our way to achieving those, if not achieving them. The most important thing we have to focus on now is how do we win in the marketplace?”

Posted in In the News

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