New GM chief vows to stay on course and ‘accelerate’ – Reuters
DETROIT (Reuters) – General Motors Co’s (GM.N) new chief executive, Mary Barra, said on Thursday she has no plans to deviate from predecessor Dan Akerson’s strategy as the No. 1 U.S. automaker pushes for profitability everywhere it operates.
“There are no right or left turns,” said Barra, who took the wheel from Akerson last week as chief of the biggest U.S. automaker. “We have momentum. We have a strategy.
“If I had to say it in one word, it’s ‘accelerate,'” Barra said, when asked at her first meeting with reporters as GM CEO what changes could be made. “It’s more about accelerating business results by quickly sharing the best ideas.”
Akerson, during his tenure of just over three years, led GM through an initial public offering, drove the company to record profits, and to leading positions in China and the United States, the world’s top auto markets. On Akerson’s last full day running the company, GM announced it would pay the first quarterly dividend on its common stock in six years.
Analysts said Barra’s comments were not surprising.
“It’s probably the right view because GM is still going through a period of discovery of how strong its brands are,” said Morgan Stanley analyst Adam Jonas, who likes Barra’s background as the former global product development chief.
“GM product has improved, can and will still improve, but will perceptions improve fast enough?” added Jonas, who has an “overweight” rating on the stock.
He said Barra needs to focus on reducing complexity and improving the company’s products.
Barra, who over the past two days has met in Detroit with GM’s top 300 global executives, vowed to maintain a “fortress balance sheet,” which has been a mantra among executives at GM since 2010, the year after the company emerged from bankruptcy. She said strong finances are a must in the cyclical auto industry and would allow GM to reinvest in its operations and to return cash to shareholders.
The appointment of Dan Ammann as president will allow a greater focus in each of the world’s regions and on the company’s brands, and will speed up GM’s plan to boost profit globally, Barra said. Amman’s focus would lead to better and faster sharing of money-saving or profit-generating ideas across the company.
Ammann, who was previously chief financial officer, was named president the same day Barra was named CEO.
Barra emphasized that GM’s senior leadership is aligned about the company’s strategy and there would be no deviation from the plans laid out under Akerson because all the same leaders had input into those decisions.
GM said last week its expected modest growth in the United States and China this year would help fund about $1.1 billion in restructuring costs in its weaker regions, including Europe. It also expects a slight uptick in operating profit this year, an outlook that analysts called conservative.
Barra said all of GM’s targets remain in place, including hitting 10 percent profit margins in North America and break-even results in Europe, both by mid-decade. She also cited opportunity for the company’s luxury Cadillac brand, as well as in the Chinese market.
In Europe, Barra said the vehicles offered under the Opel brand are strong and that focus is now needed on rebuilding Opel’s image.
“We’re not talking anymore about Opel and its existence,” she said. “We’re talking about the product.”
GM was the second largest global automaker by sales in 2013, behind Toyota Motor Corp (7203.T) and just ahead of Volkswagen AG (VOWG_p.DE). GM was the global sales leader in 2011.
(Additional reporting by Bernie Woodall in Detroit; Editing by Jeffrey Benkoe, Leslie Adler and Andre Grenon)