GOLDING’S TAKE: Dan The Man and Dan Ammann explain the plan
Ammann replaced Liddell as GM CFO on 1 April
So what you have got here is Dan The Man Akerson who has been chairman and chief executive of GM for the last 10 months, and the brand new chief financial officer Dan Ammann.
Ammann started on April 1 after his friend and fellow New Zealander, Chris Liddell, had resigned the CFO post after a brief tenure.
Given Ammann’s youthfulness – he’s a mere 39 - and given the short time he has had in which to learn how to brief the analysts (for ‘brief’ read ‘outwit’) he was remarkably assured. He did have an unusually high percentage of responses along the lines of ‘we choose not to disclose those numbers’ though. But fair enough. The lad needs time.
Liddell came to GM from Microsoft in January of last year and had a steamy time on the hot plate of government bail-outs and the like. So off he goes and his young chum takes over.
What it means is that there is something of a maverick on the numbers and a wise old hand on the helm. It could be a good crew but there is some choppy stuff ahead. Here is some of it:
Europe broke even for GM (Opel and Vauxhall) in Q1 after years of red numbers. “We now have to try and keep it that way.”
Sales have been strong but the mix is poor. All over the world, GM buyers are running to jump aboard small and fuel efficient cars. The cost to GM is that sales of high margin trucks and SUVs are tumbling. High stocks of trucks and SUVs have to be reduced somehow.
GM is still not using its scale: Mulally at Ford has built a Focus that will appeal to Brits and Brazilians and the fine folk of Baltimore but GM is still all over the place and its lead on electric vehicles is ahead of consumer demand.
Pension fund anxiety is cooling. There are still top-ups to do but they are reducing and liberating cash for other things. Asset values have been rising thanks to positive stock market movements.
Rising material costs stem from turmoil and tsunamis. There is some protection from existing supply contracts but there is no long term protection from the chill wind of reality.
Pricing in Europe is “as bad as ever”. The Euro-motorist never had it so good.
But how will GM master the twin essential tasks of rebuilding cash and spending on the new product that is so essential to remain abreast of a cleaned-up Ford?
Obviously enough, says The Man, "we have to get it from structural cost"… which means manufacturing and product development. “We have to simplify processes.” That fruit is not low-hanging the Dans concede; but equally it is not a long reach.
And what of the UAW? Is that now a benign organisation? “There is a steely-eyed objectivity on both sides of the table. We meet frequently and there is a common understanding. The guiding principal of both parties is that we have to stay competitive with our rivals.” That sounds rather like: if Ford overpays, GM can overpay.” There are competitors other than other domestics. Toyota is hardly a spent force and VW group is just appearing over the ridge with its catalogues bulging with cute new cars and SUVs.
Is there a final word from the Dans for the battered and impoverished shareholder? Oh yeah there is; but it’s an after-thought: “We also want to return cash to shareholders. That is a medium to longer term objective.”
Look elsewhere, you yield fund managers.