General Motors says its North American capacity is the strongest it has been for a generation, although it cautions against overcapacity in China.
The US automaker’s optimism is the latest in a string of optimistic noises emanating from Detroit, following the success of its recent IPO that saw common stock offered at the higher end of US$33 and potentially allowing it to repay up to US$23.1bn of its US taxpayer bailout.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
“In North America, we are definitely not concerned about overcapacity – the capacity has been the best it has ever been in a generation,” GM CFO Chris Liddell said at the Detroit show.
“One of the really good things about North America is the industry situation is pretty good. We are at full capacity and most of our major competitors are [too]. We have taken out 40% – and Ford and Chrysler similar numbers.”
Liddell conceded there was a potential the Chinese market could see overcapacity depending on market growth although, as the country continues to power on economically, this is not a current issue. “What capacity there is, is being soaked by growth,” he said.
GM’s IPO – reputed to the the second largest in history – has been an undoubted success story for the automaker – although Liddell preferred to categorise it as a “we had modest premium,” but insisted “no-one is getting carried away.”
He was referring in particular to Europe, whose travails continue to lose money for the manufacturer. “We still have to fix Europe,” he said.
“On the cost side, it is about the labour concessions and global cost reductions. The framework for that, to a large extent, is agreed. The sales side is harder – to get Europe back. You have just got to have better product and in particular, the quality of the product you have is probably better then the brand image.”
And although Liddell declined to be drawn on whether the US public approved of the $50bn taxpayer bailout for GM, he nonetheless admitted the overall feeling is better concerning the state aid.
Speaking at the Detroit show, he said: “The fact the IPO was successful – and some of the other bailouts were profitable for the government – the mood has improved.”
