It’s no secret that General Motors is on the up-and-up all over the world: the progress the automaker has made can be seen in its products as well as its financials. But The General’s management is not happy with its current position, which is as follows: this year, GM is ranked fifth in revenue among Fortune 500 companies, but was the 20th in profits.
“To be great, GM must close this gap by steadily improving our margins,” said GM CEO Dan Akerson. “It’s fundamental to earning a blue-chip multiple for GM stock, and ensure the company will be successful for generations, not just a few quarters or a few years.”
Akerson then went on to outline a plan to correct the smaller profit margins and improve The General’s profitability. The highlights of the plan include:
- The launch of one of the biggest global product offensives in GM’s history. He named the 2013 Buick Verano Turbo announced earlier in the day as a great example of new products designed to compete and win.
- Changes in the product development process that will reduce architectures by 50 percent by 2018.
- Addressing issues facing GM’s business in Europe, including delivering the promised synergies with Peugeot, working with unions to become more competitive, removing capacity when and where possible, and driving revenue with new product.
- Protecting the core vehicle business from economic shocks through GM’s “fortress” balance sheet and pension de-risking strategies.
Akerson concluded by saying that “These actions are a clear sign that GM is on the move once again. I know we can get the job done – and do it well – because the old internally focused, consensus-driven, and overly complicated GM is being reinvented brick by brick. We now have clarity of purpose backed by true accountability, and that’s part of a broad cultural change underway at GM.”
The GM Authority Take
Music to our ears. This seems like the beginnings of an automaker that will rock, as the company is doing everything to eliminate imperfections and inefficiencies. Perhaps we won’t see the fruits of their efforts today or tomorrow, but expect to shortly in the future.