GM's Wagoner Says It All

Anthony Fontanelle
June 8, 2007

At the 99th General Motors Corp.’s annual meeting of stockholders, Chairman and CEO Rick Wagoner announced the major progress of the automaker in 2006. Basically, all the things that a shareholder wanted to know is laid before them by Wagoner.

The CEO was jubilant to declare the progress of the company. “In Europe, we sold a record two million units... in our Latin America, Africa and Middle East region, we sold more than one million units for the first time... and in our Asia Pacific region, we continued to see very strong growth with another sales record.”

He added, “In North America, our four-point turnaround plan moved faster and further than most people expected. We exceeded the $7 billion structural cost reduction target that I discussed at this meeting last year... eventually ending up at $9 billion on a running-rate basis as of year end 2006. This allowed us to reduce our global automotive structural costs from 34 percent of revenue to 30 percent last year. And it represents a major first step in achieving our structural cost target of 25 percent of revenue by 2010... a benchmark among major global auto manufacturers.”

“This progress is reflected in reduced health care and pension costs, excess capacity, and staffing levels... as well as improved operating capability. In the just-released 2007 Harbour Report, which measures manufacturing productivity, GM won the best North American plant award in an unprecedented three of four categories - assembly, engine, and transmission, Wagoner noted. “We also substantially improved our liquidity position in 2006, ending the year with more than $26 billion, aided by the sale of 51 percent of our equity in GMAC, which we completed last November.”

But more than anything, the automaker’s retail sales and revenue growth mirrors positive outlook. “Over the last 18 months, we've launched a number of great new cars and trucks such as our all-new midsize crossover GMC Acadia and Buick Enclave, and the Saturn Aura and Chevy Silverado, which were voted car and truck of the year, respectively, at the 2007 North American International Auto Show,” Wagoner said.

Saturn side marker is etching indelible line on the mind of the purchasers. The rebirth concept of the brand is drawing more aficionados closer. Moreover, GM is also looking forward to produce persuasive and more powerful lineups.

Wagoner also outlined the priorities of the Detroit-based automaker. “For 2007, we're building on and accelerating our progress with the objective of positioning GM for steady revenue growth, solid earnings, consistent positive cash flow, and a strengthened balance sheet. Our major priorities for 2007 are as follows: First, we'll stay focused on our turnaround in North America. We'll stick with discipline to our sales and marketing strategy, and benefit from better sales mix, residual values, and even more launch products, he said.”

He added, “We'll continue to drive for a cost-effective, consensual agreement to resolve the Delphi restructuring, and to further reduce our still unsustainable health-care bill, which was a staggering $4.8 billion in 2006. And, of course, the 2007 U.S. labor negotiations are another important opportunity to improve our competitiveness. We've made a lot of progress working closely with UAW leadership in the last two years, and we look forward to building on that in the upcoming negotiations.”

“It's not about short-term initiatives, to react to short-term challenges... no, as we look forward to GM's centennial celebration next year, we're taking the profound actions necessary to transform the company for the long haul, for sustained profitability and growth, setting us up to be a global leader for years to come,” the CEO concluded.

Source:  Amazines.com