GM Won't Predict When It Will Return To Profitability - CEO
01 Juni 2009 - 8:32PM
Dow Jones News
The head of General Motors Corp. (GM) declined Monday to predict
when it would return to profitability, and played down concern
about potential operational interference from the U.S.
government.
Fritz Henderson, president and chief executive, also said GM's
leadership team faced changes over the next 60 days as it works
toward exiting bankruptcy protection.
Much of GM's management team has been in place for years or
decades as the company has racked up losses and seen its U.S.
market share erode.
"As a leadership team, we will be focused on products and
customers," Henderson said at a press conference in New York.
GM's restructuring plan does not contain profit targets, and
Henderson did not elaborate at the conference beyond its stated aim
of breaking even at an annualized U.S. sales rate of 10 million
vehicles.
The company has not made a profit since 2004, and only its Latin
American business made money in the first quarter.
Henderson deflected questions about potential U.S. government
influence in GM operations, saying he didn't envisage a scenario
where the administration would seek to dictate new product
development.
His remarks echoed earlier comments from President Barack Obama,
who said the U.S. isn't interested in running GM. The U.S. will
take an initial 60% stake in the company.
Henderson appealed to U.S. taxpayers and consumers to give the
bankrupt company a new shot at survival in what's shaping up as
GM's new key message.
Losing legions more customers has been the auto maker's worst
fear in a bankruptcy. The company's revenue plunged nearly 50% in
the first quarter as bankruptcy fears chilled consumers already
slammed by a global economic slump. Already this year, GM sales
have plunged 40%.
To help calm car buyers, the U.S. government will back
warranties on GM vehicles, a point underscored Monday by the
president.
Henderson said GM's U.S. filing won't affect operations in other
regions. The company is selling its European Opel operations.
Henderson said GM will continue to have a minority stake there.
The company also is reconsidering a joint venture it has with
Toyota Motor Corp. (TM) building vehicles at a factory in
California.
Henderson said bankruptcy will give GM an opportunity to
stabilize its balance sheet, though he said it was not the
company's preference.
"While our preference was to create a new GM on a different
path, what is most important is to get GM to its destination,"
Henderson said.
-By Sharon Terlep, Dow Jones Newswires;
Sharon.Terlep@dowjones.com