Akerson: ‘We have to be profitable in everything we do’

January 9, 2013
Akerson: ‘We have to be profitable in everything we do’
Detroit — Powered by new products and what are likely to be at least 12 straight quarters of profitability, General Motors Co. is hoping to regain its investment-grade status this year, CEO Dan Akerson said Wednesday.
The upgrade, after eight long years of “junk” status, would be yet another positive step in the Detroit automaker’s government-assisted redemption, would vindicate the investment-grade rating by GM’s banks on its $11 billion credit line and could help to drive GM shares higher than their 52-week high.
“Our goal is by the 2015 to ’16 time frame to be single-A investment grade,” Akerson said in a roundtable interview in advance of next week’s North American International Auto Show in Detroit. “Ultimately we have to be profitable in everything we do.”
GM’s North American operations are expected to drive the automaker’s profitability this year and into next. GM expects to regain “modest” market share in its home market on the strength of the “product, product, product” now reaching showrooms and expected to be shown next week at the Detroit auto show.
GM expects American consumers to buy as many as 15.5 million cars and trucks this year, up from 14.5 million in 2012. And he predicted that GM’s sales growth this year would outpace growth in the broader market, a reversal from last year when the market expanded 13 percent industry-wide compared to just 3.7 percent for GM.
“We have the oldest portfolio in the industry in this country,” Akerson said, a by-product of the bankruptcy-induced interruption in the company’s spending on product development. That’s in the past, now that GM expects to spend $8 billion annually to fund product development.
“This is going to be a strong year for product introductions, not only in North America, but around the globe. In 2013 and ’14 the sun will be at our backs. These will be good years not only domestically but in our international operations.”
But he added a caveat:
“It would be foolish not to footnote that there seems to be a lot of macro-economic uncertainty out there,” a reference to the New Year’s Day tax fight in Washington and the looming budget and debt-ceiling wrangling coming within the next 60 days or so.
Akerson expressed cautious optimism on the automaker’s turnaround of its chronic money-losing operations in Europe, saying he sees “green shoots” of progress extending beyond already announced plant closings and 2,500 job cuts last year. Labor contracts are being reworked; assets are being closed or sold; and, in a distinct echo of Ford Motor Co., production will be matched to demand, not hope.
The 64-year-old CEO also affirmed GM’s alliance with PSA Peugeot Citroën of France; confirmed that GM is determined to place long-term bets on developing markets to build what he called a “rest-of-world manufacturing” presence; said GM is in discussions with the United Auto Workers union about lump-sum pension buyouts, He wouldn’t comment further.
He also called the all-new Corvette to be unveiled Sunday to the media “the most beautiful car this company has ever made.” And Akerson said he expects to “be here next year” as GM’s chairman and CEO. “But I don’t know how long it will run. So, no change. There’s nothing going on.”

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