Since launching as a new company on July 10, GM says it has made ‘demonstrable progress in positioning the company for success; putting in place a new global operating structure, a leaner and more streamlined executive leadership team, and a reconstituted Board of Directors’.
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It said the new GM comes with ‘a cleaner balance sheet, fewer employees, an improved cost structure, a stronger dealer network, and streamlined global operations’.
GM also say it has successfully launched new vehicles around the world ‘that are performing especially well in their respective markets’.
“Over the past ninety days since we created the new GM, we’ve already launched a number of new, fuel-efficient, highly successful cars and crossovers; introduced a new marketing campaign that highlights our best-in-class fuel economy, quality, warranty and safety performance; sworn in a new Board of Directors; and overhauled our management,” said GM President and CEO Fritz Henderson.
“We are taking aggressive actions and moving quickly to transform our culture into one that is truly customer focused,” Henderson said.
GM highlighted a number of positive product launches and developments.
It said that in the US newly launched vehicles, including the Chevrolet Equinox, Cadillac SRX, Buick LaCrosse, GMC Terrain and Chevrolet Camaro all exceeded sales expectations in September.
GM also said that additional marketplace recognition came from the recent naming of three GM brand cars (Buick LaCrosse, Cadillac CTS Sport Wagon and Chevrolet Camaro) and two GM brand trucks (Cadillac SRX and Chevrolet Equinox) to the short list of nominees in the North American Car/Truck of the Year competition. The winners in each category will be announced at the North American International Auto Show in January.
To help spur demand, in early September, GM launched a new advertising campaign titled “May the Best Car Win,” which reinforces the company’s confidence in design excellence and award-winning vehicle quality. Edmunds.com reports brand interest in GM vehicles is up approximately 11 percent (from 18.1 to 20 percent) since the campaign launched, GM says.
Volt on track for late 2010 SOP
GM also said that the Chevrolet Volt extended-range vehicle remains on track to begin production in late 2010. To date, more than 80 pre-production Volts have been built and are being road-tested. GM also recently announced a $43 million investment in Brownstown Township, Mich. to manufacture the required lithium-ion battery packs.
Global share up
GM said its preliminary global market share in the third quarter was 11.9 percent, up 0.3 percentage points from 11.6 percent share in the first half of the year, compared to 12.4 percent in 2008.
The company’s U.S. market share was 19.5 percent in the third quarter, consistent with the first half of the year. U.S. market share in 2008 was 22.1 percent.
As of September 30, dealer inventory was 424,000 units with 81 days supply, down from 582,000 and 99 days supply at the end of the second quarter. GM is increasing fourth quarter North America production to help rebuild the supply of vehicles in high customer demand.
Rationalising manufacturing
GM has continued consolidating manufacturing operations. In the last 90 days, Pontiac Assembly and Wilmington Assembly both have ceased operation, as part of the previously announced plan to reduce operating plants in the US. By year-end 2009, GM will have reduced the number of operating plants in the US to 41, down from 47 in 2008, excluding the component plants recently acquired from Delphi.
Dealer consolidations continue
GM says it is consolidating U.S. dealers through wind-down agreements, including Pontiac and Saturn dealerships. The company ‘continues to work toward a more competitive dealer distribution structure’, with approximately 5,800 dealers at the end of the third quarter, down from approximately 6,375 dealers at the end of 2008. Even after the dealership consolidation is completed in 2010, GM will have more dealerships serving customers than any competitor in the US.
Workforce reductions
In the U.S., GM reduced its workforce from approximately 29,700 salaried at the end of 2008 to approximately 24,300 salaried as of October 7, 2009, or 18.2 percent. GM’s hourly employment has been reduced from approximately 62,000 people to 49,200 people in the same time period, or 21 percent.
Asset sales near completion
GM also said it continues to work toward closing the sale of the Hummer and Saab brands. The company has made further progress on agreements and necessary regulatory approvals for the sale of Hummer to Sichuan Tengzhong Heavy Industrial Machinery Co. Ltd., and has reached agreement with Koenigsegg Group AB to purchase Saab.
GM also is working to close the sales transaction of a majority stake in Opel/Vauxhall. Opel/Vauxhall operations will be 55 percent owned by Magna International and Sberbank; 10 percent by employees; and the balance retained by GM.
Looking ahead
Looking ahead, GM said it will continue to ‘focus on its customers, cars and culture’.
While significant progress has been made since the new company emerged, challenges still remain, it said. These include uncertainty in the rate of recovery of the U.S. economy and the auto industry, the company’s ability to continue rebuilding consumer purchase consideration and completing the remaining structuring actions.
“We’ve made a lot of progress in 90 days, but we don’t think for a second that we can begin to ease off the accelerator,” Henderson said. “We have been granted an extraordinary second chance to reinvent this company. We are driving hard to change the way we interact with our customers, to ensure our new cars and trucks are the best in their segment, and to change the way we operate and how think about the business. We need to prove ourselves every day, and we will.”
