GM's 2013 priorities: Launch pickups, fix Europe
Akerson: GM has “levers we can pull.”
DETROIT -- For General Motors, there are two keys to maximizing 2013 profits: successfully launch its redesigned full-sized pickups in North America and curb losses in Europe.
Last week, GM executives emphasized the importance of each task after reporting the company's third straight profitable year since its 2009 bankruptcy.
GM's net profit for the year fell 36 percent, to $4.86 billion, from a record $7.59 billion in 2011. The drop mainly stemmed from one-time special items. Its pretax profit, excluding those one-time items, was $7.86 billion, down 5 percent.
The results showed strength in every region except Europe, where losses widened amid the continent's deepening recession and debt crisis. GM's European losses for the year nearly tripled, to $1.80 billion.
GM CFO Dan Ammann said he expects industrywide conditions in Europe to worsen this year. Still, he stood by an earlier forecast that GM's European results would improve slightly this year. And he still expects GM to break even on the troubled continent by the middle of the decade.
GM and other automakers are working to reduce surplus manufacturing capacity to cut costs as demand falls. In 2012, GM cut European production 22 percent to 927,000 units.
GM CEO Dan Akerson said he expects to finalize a labor deal with German unions by the end of March, a key part of GM's restructuring plan.
"One thing we can't control is the market, but we have certain levers we can pull," Akerson told analysts and reporters during a conference call. "At the same time, we can't just play defense. We're trying to play offense" by entering new segments, including the recent launches of the Opel Mokka small crossover and Adam minicar.
In North America, GM had $6.95 billion in pretax earnings in 2012, down 3 percent partly because of higher costs associated with a busier vehicle-launch schedule.
Typically, GM earns up to 60 percent of its North American profit in the first half of the year, Morgan Stanley analyst Adam Jonas says. But in 2013, as much as two-thirds of GM's profits could come in the second half of the year because of the launch of the next-generation Chevrolet Silverado and GMC Sierra, among the most profitable vehicles that GM sells. Those trucks are expected in showrooms by early summer.
Of the transition to the redesigned pickups, Akerson said: "We have a transition plan to optimize our capacity, sales and market-share opportunity in a growing U.S. economy."
He called the recent unveiling of the redesigned pickups "our most important product news" and said GM will have more news in March on the trucks' fuel economy, towing and other ratings.
He added: "We've planted the seeds of growth in every region around the world."
You can reach Mike Colias at firstname.lastname@example.org.