GM's Whitacre Sees Chance for 2010 Profit, Little Hope for Saab
January 06, 2010
General Motors Chairman and Interim CEO Ed Whitacre said the automaker has a shot at earning a profit in 2010, but he sees little hope to a rescue of Saab.
In a wide-ranging conversation with media in Detroit on Wednesday, Whitacre said GM's top priority to is earn a profit so that it can pay back its government loans and become a public company again. Going public wouldn't happen earlier than late this year, however.
Whitacre said GM's management has obstacles to circumnavigate in order to become profitable, but he believes it can be done this year. It would be GM's first profit after five years of losses.
And, he added, it will not be done through massive cost-cutting but through generating higher sales and revenues. He said he has a market-share goal he wants GM to achieve profitably, though he wouldn't reveal that goal, saying only it is higher than GM's current share.
GM's December share was 20.3 percent, according to Edmunds.com's calculations. Whitacre said he is pleased with GM's progress and December's sales report, posted Tuesday.
As for Saab, though the deadline for talks with Dutch sports carmaker Spyker was extended, Whitacre said the wind-down of the brand is proceeding. "I'm not confident of a breakthrough" in negotiations, he said, adding "no one has shown up with money" for the Swedish automaking unit.
Whitacre said the firm searching for a new CEO hasn't yet provided him or the board with a list of possible candidates. The search firm was employed after Fritz Henderson was ousted as CEO and Whitacre took over the job. The 68-year-old retired CEO of AT&T had been appointed by the federal government to chair GM after its bankruptcy.
Whitacre said Chris Liddell, the Microsoft CFO who was named GM's news CFO last month, is a candidate to become GM's CEO. He said he had never heard of Apple COO Tim Cook as a candidate, despite reports in a Silicon Valley trade publication that had Cook as the search firm's No. 1 choice.
Whitacre also shed some light on recent appointments to GM's Washington, D.C. office. John T. Montford, a fellow Texan who most recently was senior vice president-state legislative affairs for AT&T, was named a senior advisor to Whitacre. Robert E. Ferguson, another fellow Texan and former AT&T colleague who most recently was with the business advisory firm of Public Strategies in Austin, was named GM vice president of Government Relations.
Whitacre said their job will be largely to reshape GM's public policy and repair its relationship with Congress and the Obama Administration following the government's controversial bailout of the automaker last summer. "That left not a good taste in some people's mouths," he said, adding they will show Washington a new GM indeed exists.
On a personal note, Whitacre, who now works every day at GM, said he has moved from the hotel in GM's Renaissance Center in downtown Detroit to an apartment. He also recently bought a car for his permanent home in San Antonio, Texas. "I bought a Cadillac CTS -- a CTS-V, I might add."
Whitacre, who will attend his first auto show -- Detroit's auto show -- next week, insists he has not exceeded the 75 mph speed limit of Texas roads in the black Caddie.
Wink. Wink.
- Michelle Krebs, Senior Analyst and Editor at Large
Posted by Michelle Krebs at 3:18 PM under Featured , GM , News , Personalities | Comments (3) | digg this | Seed Newsvine
Saab appears to have been always earmarked for shut down; it never was seriously for sale.
If it was, don't you think that GM would take anything close to a reasonable offer for it? There would be no international dealer wind down, jobs at Saab and their suppliers and contractors would be largely preserved. And GM would enjoy better stature around the world.
Ultimately I think GM believes it is in the company's best interests long term to either keep their brands or completely discontinue them. The short term costs are very high; dealer animosity over wind downs, political and union dust-ups globally, and obviously the huge cost of phasing out a plant.
But I think that they envision a diminished GM if one or any of the brands they sold off would not only compete with, perhaps be more successful than the brands they kept.
Imagine Magna-owned Opel outselling Chevrolet here or Buick in China, or Spyker-Saab keeping Cadillac stunted in Europe, for instance.
Posted by: fulcrumb | January 06, 2010 at 6:49 PM
Interesting points, fulcrumb. While it does seem that even a fire sale price would be better than no sale at all, it would also allow a former nameplate to become a competitor to them. So perhaps they weren't interested in selling without getting a whole lot of money to justify the risk.
I wonder if there are any parts of Saab that could end up in the hands of other companies.
Posted by: cwc1 | January 06, 2010 at 7:36 PM
@cwc1:
The tooling and powertrain technology for the previous 9-5 and the 9-3 was sold to Bejing Auto (BAIC) of China this past December. These being the "old Saabs", will be a generation behind GM's Epsilon II-based Buicks there and here, and the probably stillborn 2010 Saab 9-5 in the rest of the world. Plus the Opel Insignia in Europe.
By the way, GM also has an arrangement with Dan Dong Shu Guang, another Chinese automaker, to build a version of the Chevrolet pickup for the home market. In China, it's called the "Da Chai Shen".
But the English translation is the coolest name for a pickup truck anywhere, ever:"BIG DIESEL GOD"
Posted by: fulcrumb | January 06, 2010 at 8:34 PM