ZURICH, Switzerland - The world's largest automotive company does not believe its leadership position is threatened by the proposed DaimlerChrysler AG merger.
'We don't feel pressure on this,' says Lou Hughes, president of General Motors' International Operations. 'We feel that the competition in the industry is intense, and that's all the more reason for us to do our very best.'
Hughes says that although profitability is GM's major focus, the automaker also is working to remain No. 1:
1. GM is spending about $2.5 billion annually outside of North America. The automaker wants to raise international sales to about the same level as its North American sales over the next five to six years. Hughes admits that is a lofty goal, but it could add up to 2 million additional units outside of North America.
2. Additional shifts likely will be added in Europe to get more product out of capacity-constrained European plants.
3. The company continues to cut costs.
4. An equity stake in Korean automaker Dae-woo Motor Co. Ltd. would give the company a greater presence in Asia.
'If we're weak anywhere, it's in Asia,' Hughes says. 'Isuzu (owned in part by GM) does pretty well, but we don't have enough of a presence and that's why we're investing.'
Hughes says the proposed DaimlerChrysler merger has not pressured GM to seek other partners. He said Daewoo currently is the only automaker with which GM is discussing a larger relationship.
He says he would not be surprised if other makers are looking for partners.
'Some companies, particularly smaller companies, could feel threatened and feel a desire to develop alliances with other companies,' he says.
GM has lots of merger experience. Hughes says DaimlerChr-ysler's biggest challenge will be to blend the cultures.
'You spend a lot of human energy on getting to know one another as opposed to be focusing on your competition,' he says. 'It's almost like joining two armies. They're doing a lot of maneuvers to learn about how each other operates while they're under attack.
'We discovered a lot of that with EDS and Hughes, etc.'
And that is why he says GM is taking its time with the Daewoo talks. Kim Woo-Choong, group chairman of Daewoo, told Automotive News Europe this month that he expects talks to wrap up in June. Hughes did not have a timetable.
'Daewoo has a complex corporate organizational structure,' he says. 'It has a lot of overseas subsidiaries now, and so we have all these pieces and trying to find out which ones can we cooperate on. That's going to take a lot of time.' Hughes says a Daewoo deal could range from assembly contracts to a significant equity interest.
GROWTH IN ASIA
Hughes estimates the world automotive market will increase by 12 million to 14 million units by 2010, with half of the growth in Asia.
'We don't feel threatened,' he says. 'I don't think we would be the largest automotive company in the world if there was a fundamental weakness in the institution.
'We're a much financially stronger company, and we are using those financial resources as a foundation to innovate. You'll see that in our new products.'