In a recent interview, General Motors Chief Financial Officer Dan Ammann reflected on the firm’s global opportunities, as well as its main priorities. The 41-year-old New Zealander joined GM in 2011 after the mysterious departure of ex-Microsoft CFO Chris Liddell.
When it comes to global opportunities for The General, Mr. Ammann reflected on the automaker’s truly massive scale as an organization. GM makes roughly $150 billion a year in revenues, but hasn’t leveraged that massive amount historically. There’s also the opportunity to be more efficient in pretty much all areas of GM’s business:
“One of the biggest opportunities we have as a company is to take advantage of the scale that we have. We have $150 billion of business in one business all around the world, and that’s something that General Motors has not historically taken advantage of, so we have opportunities as it relates to how we work with our supply base, how we construct our global portfolio, our architecture strategy — all the way through to the back office and running the company more efficiently on that basis. So, big opportunity to be much more efficient, much more successful in the marketplace, successful with the customer, taking advantage of the scale we have with have around the world.”
Speaking of being more efficient, improving in this area in particular will likely allow GM increase its profitability, something that it’s lacking compared to its main rivals such as VW and Toyota.
When it comes to GM’s main priorities, it’s all about vehicles. Better vehicles, that is.
Mr. Ammann is adamant about GM producing “winning vehicles” with “great design and performance” — something that GM has shown it can do. After that, it’s about offering said winning vehicles at “a compelling value proposition to the customer”, and then ensuring top-notch quality:
“Number one is producing winning vehicles: great design and performance. And we’ve demonstrated time and again that we know how to do that, everything from the Cadillac entries that were brought and we’re bringing to market this year, around the world to the Opel Mokka and Adam in Europe, all around the world, the new portfolio in South America, we know how to do winning cars, great design, great performance.
Secondly is offering those vehicles on a compelling value proposition to the customer. So great value, the right price, the right cost structure to enables us to win with the customer in the market.
And then finally, from a quality point of view, we continue to make great progress on quality, we have a much more integrated perspective on quality and customer experience across the company, we’ve made tremendous strides on that. So we’ve come a long way but we still have a lot of opportunity ahead of us.”
The GM Authority Take
As we’ve said before, General Motors is currently in the midst of an interesting and unique period of transition: it’s addressing whatever issues need fixing from purely a business standpoint (Europe) while quickly updating its brands, technology, and vehicle architectures to not only create the winning products mentioned by Mr. Ammann, but to do so in a cost-effective and profitable manner.
Even so, GM’s vehicles are already leading in the quality department — something that’s not only my own subjective opinion (that stems from having worked in the automotive industry for years), but one that can has recently been confirmed with quantitative data, as well.
However, we’re somewhat surprised that Mr. Ammann didn’t mention the European market as an area of opportunity. The region’s temporary economic depression aside, the low sales volume of the Chevrolet and Cadillac brands in the region should be looked upon as huge opportunities in the long term.