‘Turmoil’ may slow GM’s plans for growth this year

August 10, 2011 at 12:00a.m.

Photo by: Paul Sancya

General Motors Chairman and CEO Dan Akerson speaks at a news conference at the start of national contract negotions at the General Motors Hamtramck Assembly plant in Hamtramck, Mich., Wednesday, July 27, 2011. (AP Photo/Paul Sancya)

Dow Drops:

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8/10: ‘Turmoil’ may slow GM’s plans for growth this year
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Associated Press

DETROIT

The top executive at General Motors Co. is having doubts about whether U.S. auto sales will recover this year as expected, even as the stock market rebounded a bit Tuesday from its huge losses.

Speaking to industry analysts about GM’s long-term financial plans Tuesday, GM Chairman and CEO Dan Akerson said the company is sticking with its U.S. sales forecast of around 13 million cars and trucks for the year, but he’s not certain sales will make it that high.

“There’s a lot of turmoil in the business, and turmoil means uncertainty,” Akerson said. GM’s finances, he said, are strong enough to “power through these dips” in sales.

The statements came amid optimistic predictions for the future of the company, which has made billions just two years out of Chapter 11 bankruptcy protection. Analysts were told that GM is looking to become more efficient so it can make stronger profits, and that it plans to raise factory capacity by 45 percent in Brazil, Russia, India and China by 2014 to take advantage of expected sales growth.

Company executives made the statements at GM’s second-annual global business conference. The U.S. stock market slide and international government debt problems barely were mentioned during the presentation, which lasted more than four hours.

GM’s shares have lost more than 20 percent of their value since its November initial public stock offering, although they recovered a bit with the rest of the market on Tuesday. GM closed up 97 cents or nearly 4 percent, at $25.54.

During the presentation, GM executives outlined cost-saving measures that included halving the number of frames it bases its vehicles on across the globe. In 2010, GM had 30 frames, known in the industry as platforms. By 2018 it plans to cut that number to 14. It also will sell more of the cars and trucks built on those platforms across the globe, saving on manufacturing, engineering and design costs. The company also plans to cut the number of engines it develops, as well as reducing the number of parts it uses across the globe.

“There’s a lot of complexity. We need to simplify it,” Akerson said. “More of our components will be common and more of our vehicles will be on global architectures.”