Industryweek 2308 23755sonic

The New GM

Jan. 27, 2011
'Humbled' automaker trying to rebuild relationships with suppliers, dealers and customers.

It's been a good month for General Motors.

The embattled automaker kicked off 2011 by reporting that its December 2010 vehicle sales were up 16% from the previous year, while full-year 2010 sales rose 21% to 2.2 million vehicles.

GM noted that its pared-down offering of four brands sold 118,435 more vehicles in 2010 than the company's eight brands sold in 2009.

On Jan. 10, automotive journalists gave the 2011 North American Car of the Year honor to the Chevrolet Volt, which GM launched in November. The Volt's list of accolades also includes being named Motor Trend's 2011 Car of the Year and Green Car Journal's 2011 Green Car of the Year.

The 2012 Chevrolet Sonic, shown on display at the North American International Auto Show in Detroit earlier this month, is an example of GM's "reinvigorated small-car lineup," says Steve Carlisle, GM's vice president of global product planning.
GM today announced that it is "stepping up the national rollout of the Volt to match customer interest."

"We're accelerating our launch plan to have Volts in all participating Chevrolet dealerships in every single state in the union by the end of this year," said Rick Scheidt, U.S. vice president, Chevrolet Marketing. "This is the right thing to do for our customers and our dealers who are seeing increased traffic onto their showroom floors."

Another sign that GM is regaining its sea legs: The automaker today said it is withdrawing its application for $14.4 billion in direct loans from the U.S. Energy Department. Congress in December 2007 authorized the loan program to help automakers retool their U.S. factories to produce more fuel-efficient vehicles.

"This decision is based on our confidence in GM's overall progress and strong, global business performance," said Chris Liddell, GM vice chairman and chief financial officer. "Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet."

The announcements come on the heels of a triumphant November, when GM launched a $23.1 billion stock IPO -- thought to be the largest in history -- and reported its healthiest quarterly earnings since 1999, with third-quarter net income of $2 billion.

Mending Fences

As the "The New GM" builds some momentum, GM executives have been careful to strike a tone between confidence, cautious optimism and acknowledgment of the challenges that lie ahead -- as well as the automaker's past foibles.

Speaking at the Automotive News World Congress on Jan. 11, GM Chairman and CEO Dan Akerson suggested that GM -- post-bankruptcy and post-bailout -- has found religion.

"At GM, we are humbled by our near-death experience, and deeply appreciate the support we received from so many people and organizations since then," Akerson said, noting that it was his first major industry speech since becoming chairman on Jan. 1 and CEO on Sept. 1, 2010.

Akerson: "We will keep the lines of communication open, and we will treat you as the valued partners you are."
Akerson pointed out that one of his top priorities will be to bolster relations with suppliers and dealers. He said GM needs to engage suppliers earlier in the R&D process, while suppliers need to "bring us your best ideas first." To dealers, he pledged that GM will maintain healthy R&D and product spending levels "in good times and bad."

"I know the bankruptcy proceedings were tough on a lot of valued partners, including many of our suppliers and dealers," Akerson said. "I can't wave a magic wand and erase that, but I can pledge that we will work with you. We will keep the lines of communication open, and we will treat you as the valued partners you are."

Akerson said the automaker needs to improve its relationship with its customers as well.

"Our biggest challenge right now is to get more people to put GM on their consideration list, to give us a fighting chance of getting them behind the wheel of a Chevy, Buick, GMC or Cadillac," Akerson said. "In many ways, that comes down to rebuilding trust. And we'll do that by proving every day that GM is a new and different company than it was two years ago.

"We need to demonstrate that we have learned from the past ... and are determined never to repeat it."

International Markets

Speaking at the Society of Automotive Analysts' 2011 Automotive Outlook Conference on Jan. 9, GM's vice president of global product planning, Steve Carlisle, noted that GM is "a leaner, more focused company" after going through the "painful but cleansing fires of Chapter 11" [reorganization].

"We have a much more competitive cost structure, a strong balance sheet, a low break-even point and growing brand equity," Carlisle said.

Still, Carlisle said that the bankruptcy process "certainly was not a magic bullet for reinventing our business."

"So in addition to keeping our costs down, we need to boost our revenues, and we're working at warp speed to do exactly that," he said.

GM has become increasingly reliant on international markets to do that. Carlisle noted that going forward, the automaker expects to generate approximately 70% of its total sales outside the United States.

Carlisle: GM is a "leaner, more focused company" after bankruptcy.
Sales of GM vehicles in international markets were up 25% in 2010, "propelled by records in China, India and Egypt," Carlisle said. In China, GM has been the top-selling foreign automaker for six years in a row, selling 2.3 million units there last year.

The automaker also has high hopes for Brazil, where it sold around 650,000 vehicles in 2010, and Europe, where it is launching seven new models this year, according to Carlisle.

"Wherever we do business around the world, we're combining GM's global resources and economies of scale with a targeted focus and market knowledge of local partners and operations," Carlisle said. "We think this strategy positions us for continued growth."

Social Media

Among the characteristics of the New GM, Carlisle said the automaker's "customer-first mentality" is the most intense that he's seen since joining the company in 1982.

"We're focusing on our customers like never before and on reaching them and talking to them in new ways and, importantly, on listening to them," Carlisle said.

He explained that GM is "using social media and other tools to engage [customers] in unfiltered conversation" and to strengthen relationships. For example, specialists at GM's customer assistance center comb social networking sites "to find dissatisfied customers and proactively solve their problems rather than wait for them to find us."

"It's been so successful that we've doubled the size of our outreach team," Carlisle said.

The company also is reaching out to customers directly. Last year, GM employees from design, engineering, marketing and sales traveled to dealerships in 10 cities to show GM vehicles, answer customers' questions and conduct test drives. The events drew more than 9,000 customers.

"I participated and I know we're changing some opinions, because two of the dealerships my group visited in Philadelphia more than doubled their sales for a typical weekend," Carlisle said.

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

Navigate future changes with a digital ship lifecycle management solution

Jan. 11, 2023
Learn how shipbuilding companies can keep up with today's and tomorrow's requirements while reaping the benefits of offering value throughout the ship's lifecycle.

How Organizations Connect and Engage with Frontline Workers

June 14, 2023
Nearly 80% of the 2.7 billion workers across manufacturing, construction, healthcare, transportation, agriculture, hospitality, and education are frontline. Learn best practices...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!