DETROIT - General Motors Chairman Jack Smith says the company is unlikely to reach its goal of 33 percent of the U.S. car and truck market this year. Strikes at key GM plants have just about dashed that hope.
'I think we will do better than last year, but obviously we won't be able to do at the upper limits of what we thought we'd be able to do,' Smith said.
GM had a combined market share of 31.3 percent last year and 31.0 percent through the first four months of this year.
Smith talked with reporters during a breakfast meeting here last Thursday, May 29. He spoke on a variety of topics ranging from labor issues to doing business in China.
The seven-week strike at an assembly plant in Oklahoma City, which ended last week, hurt sales of the new Chevrolet Malibu and Oldsmobile Cutlass. As of late last week, a strike continued at a plant in Pontiac, Mich., that builds popular full-sized pickups.
Smith said despite a lack of product due to the walkouts, dealers support the company's efforts to make its plants more efficient.
'There is a strong push to get those plants competitive,' he said. 'We believe it is absolutely necessary for the long-term competitiveness of the company.'
On other issues, Smith said:
The company may have to increase its advertising budget to relaunch the Malibu.
GM wants to build vans in the Shanghai plant where it will build Buick sedans for China. The Buicks will likely go on sale in April 1999.
U.S. companies would lose a competitive advantage if the government imposes economic sanctions on China.
Brand management, started 18 months ago at GM, works better than the company expected, but it is still too early to declare the concept a total victory. Brand managers work directly with product engineers and oversee vehicle pricing, advertising and marketing.
The emergence of new dealer groups such as AutoNation USA will help GM pare its dealer ranks. He also said GM is studying a test that Ford Motor Co. plans in Indianapolis to form a joint factory/dealer business to operate fewer dealerships in that city.
It is unlikely that the automaker will be able to spin off Delphi Automotive Systems, its parts operation, this year.
Smith appeared shocked to hear from reporters that customers are still having a tough time with warranty service. 'From my view, we certainly have spent a hell of a lot of money extending the warranty periods,' Smith said.
'We have help centers, roadside assistance and dealer loaner cars. From my view, it's a heck of a lot easier all in the name of customer satisfaction.'