GM’s Barra Seeks to Accelerate Strategy Set Under AkersonTim Higgins
General Motors Co. Chief Executive Officer Mary Barra, who took the reins of the automaker last week, said she aims to build on the momentum of the strategies already in place.
“There is no right or left turns that we’re going to be making,” Barra told reporters today at GM’s Detroit headquarters. It was her first roundtable with U.S. reporters since becoming CEO on Jan. 15, succeeding Dan Akerson.
“If I had to say it in one word, it’s ‘accelerate,’” said Barra, adding that she was part of developing the company’s strategies under Akerson’s watch. “We’re no longer just looking for viability but we’re looking for growth and leadership in the operations that we have around the globe.”
Interest in Barra, 52, the first female CEO of a global automaker, is high as GM begins a new era after the U.S. government ended its ownership that followed the company’s 2009 bankruptcy reorganization. The automaker has been winning praise for vehicles introduced while Barra was product-development chief, including the Chevrolet Impala, Corvette Stingray, Silverado pickup and Cadillac CTS.
GM shares rose 42 percent last year as the Treasury sold off its stake and the automaker regained investment-grade status by Moody’s Investors Service, rejoined the Standard & Poor’s 500 Index, and introduced 18 new or refreshed products in the U.S. GM plans 15 new vehicles in the U.S. this year and 17 in China, its largest sales market. GM announced last week it was resuming a quarterly dividend after last paying one in 2008.
The automaker last week forecast profit this year to increase “modestly” from 2013 as the company spends money to continue restructuring trouble spots in Europe and Asia. Improved operating performance, such as in North America, should offset $1.1 billion in additional restructuring costs, leaving margins for adjusted earnings before interest and taxes similar to 2013, the company said.
GM sees U.S. industrywide sales rising to 16 million to 16.5 million from 15.6 million last year.
Akerson, as CEO, had set several ambitious mid-decade goals for GM, including boosting North American operating margins, stemming losses in Europe after losing more than $18 billion since 1999 and increasing China sales to 5 million from 3.16 million last year. His strategy called for boosting GM’s Chevrolet and Cadillac brands globally with new products and a more focused marketing effort.
“We have great opportunity and momentum in China,” she said today. “When I look at the Cadillac opportunity, we’ve got this product cadence and strength from a product prospective.”
Deliveries in China, while increasing 11 percent last year, failed to keep pace with those of Volkswagen AG, which unseated GM in the country as the top-selling foreign automaker. GM had held that position for eight years.
VW’s China growth helped the German company, which seeks to become the world’s top-selling automaker by 2018, narrow GM’s sales lead globally. GM sales worldwide rose 4.5 percent last year to 9.71 million, while VW said its deliveries increased almost 5 percent to more than 9.7 million. In the U.S., GM’s sales rose 7.3 percent, to 2.6 million, almost matching the market’s 7.6 percent increase.
In Europe, Barra and her team, which includes Dan Ammann as president and Chuck Stevens as chief financial officer, inherit a game plan that includes shutting the first automotive assembly plant in Germany since World War II and pulling the Chevrolet brand from the region as GM looks to cut costs and strengthen its Opel brand.
Barra is on tap to receive at least $4.4 million in compensation this year. Her salary was set at $1.6 million and she is eligible for $2.8 million under GM’s short-term incentive plan, GM said in a filing last week. Barra also is likely to receive additional remuneration as part of new long-term incentives up for approval at the this year’s annual meeting, GM said. She said she trusts the board’s compensation decisions.
Barra, who met with her top 300 executives in suburban Detroit earlier this week, outlined how Ammann’s role will change now as president from his old job as chief financial officer.
“Dan and I are perfectly aligned,” she said.
GM’s regional operations report to Ammann in his new position and he will focus on those markets along with strengthening the company’s brands.
“There’s been this conversation about ‘Is it regions? Is it brands?’” Barra said. “Guess what: It’s both.”
Other changes that came with Akerson’s departure included the appointment of Tim Solso, the former CEO of engine maker Cummins Inc., as non-executive chairman.
Barra said she’s been having a “weekly interface” with Solso since her appointment and called him a good addition to the team.
“He’s very clear: My job is to lead the company,” she said. “But he’s also there to bounce a strategy off of -- the CEO works for the board.”