Those following General Motors closely already know that the automaker currently is less profitable as some of its closest competitors, especially Toyota and Volkswagen AG. But The General is currently laying the framework to boost its profit margins — all the way up to the 10 percent mark, according to GM North America Chief Financial Officer Chuck Stevens; by comparison, General Motors averaged a 7.4 percent profit margin from 2010 to 2012.
The objective will be realized by following two comprehensive business practices, including continuing to expand globally while releasing new models that are (also) global in nature, and therefore more profitable. In fact, GM plans to save a billion dollars a year by building more cars on shared global platforms using common components. Currently, 60 percent of GM’s cars are built upon global platforms, and the goal is to increase this number to 95 percent by 2018.
To keep its vehicles more competitive in the marketplace, GM plans to release cars at twice the pace that it does so today, and expects to be able to do so in the next four years. And by 2016, 90 percent of sales are expected to come from newly-released models. And when it comes to labor costs, The General wishes to double the amount of entry-level hourly workforce in the U.S. to roughly 10,000 people over the next 2-3 years; the new entry-level hourly wage is significantly lower than that of years past thanks to a restructured agreement with the UAW.
The GM Authority Take
All that should help GM sell more cars, and make more on each unit sold… and that should boost the confidence of pretty much every stakeholder — including customers, investors, suppliers, along with anyone and everyone in between… and ultimately, that should result in tangibly better products, and an increase in GM’s stock price.
Comments
My only concern is that gm turns into another vw w respect to engineering bland cars that all look the same and w shoddy reliability. Gm needs to keep the momentum they have right now building and engineering the best cars in the world. They are on a roll right now
Since the debut of 2013 Malibu and all new 2014 CTS, I seriously doubt that GM can actually design and engineer best products among competitors and lure customers to buy cars and trucks. GM is having a hard time to understand how to make a car (or truck) small on outside and big on inside especially ample rear legroom.
You’re really stuck on this rear legroom thing huh… I sat in back of the new malibu and im 6’2″ and I was fine. I have even sat in back of the cruze and it was ok.The front seat was about halfway back. Gm is making very attractive cars and trucks right now. I dont know why you have such a problem with gm vehicles. Dont like it dont buy it, stop stating opinions and making them come across as facts! Millions of people buy gm every year so they are obviously doing something right.
GM should buy back some of their assets sold during the bankruptcy that are actually profitable. At the same time GM should make more of their parts in house like they used to
GM was the biggest and most profitable company in the world at one point. Based on what I’ve read the only companies that were bigger and more profitable were soviet state owned companies. In other words I think GM can do it again.
Car makers don’t make (much) money selling cars. They make money taking care of cars and customers. The silence regarding the aftersales strategy is deafening and not promising for the bottom line. Still not leveraging OnStar properly.
What are you talking about? After sales is a pittance relative to new car sales. Now if you are talking about dealerships you might have a point.
If GM could somehow… SOMEHOW… execute their great external styling cues without impairing driver visibility, that would improve market share and profitability.
If GM could somehow… SOMEHOW… Better target the expensive, quality/JDP issue-riddled touch screen systems and put the money into things that actually improve the, oh, I don’t know… DRIVING experience like, oh, I don’t know… SEATS… that could help improve market share and profitability.
More experienced drivers don’t like the technology and less experienced drivers spend most of the time with their smart phone in their hand anyway. Work with Apple or Samsung, develop the stinking apps and quit wasting time and money on these ridiculous proprietary interfaces. What a waste.
I think thats a problem with the whole auto industry in general not just gm.