Since taking over at General Motors in September 2010, CEO Dan Akerson has worked to decrease GM's costs and complexity while emphasizing technology and innovation.
Akerson, 63, is pleased with GM's gain of a full percentage point of U.S. market share this year, to 20 percent from 19 percent. While he won't predict further gains, he says GM is poised for growth because of several upcoming vehicle launches, including the redesigned Chevrolet Malibu due early next year.
But Akerson also worries about the European debt crisis contaminating the U.S. economy and the economies of other regions, which would sap auto sales. And he says GM must work for many more years to keep buyers of defunct GM brands such as Saturn and Pontiac from defecting to other makes.
Akerson spoke to Automotive News Publisher Peter Brown, Editor Jason Stein, Industry Editor James B. Treece and Staff Reporter Mike Colias Oct. 13 in Detroit.
Q: The new contract with the UAW wipes away a lot of legacy costs. Are there no more excuses now?
A: You never have any excuses, quite candidly. I don't think you should blame one segment of the employee population [nor] can you say, "Gee, I had a bad run on product quality or product cadence" or anything. At the end of the day, management is paid to navigate through those things.
This contract did not infringe, in my opinion, on the labor practices or the financial prospects of the company. I think we can thank [UAW President] Bob King and [UAW Vice President] Joe Ashton for that. Both sides came together really well.
People said the first post-bankruptcy negotiation would be telling. I think the second one will be just as telling. What is it going to be like in 2015? We've got to remember what happened in 2009.
How do you see the economy in North America and Europe in 2012?
It's pretty uneven. The sovereign debt issues of Europe are serious. Many of the European banks are seriously overleveraged. You can't sit back -- because the world is so interconnected -- and think that American banks are insulated because ultimately they would be impacted.
So how do you plan for Europe and North America?
In the United States, I think it will be kind of flattish to maybe up from where it is today.
If you figure a fair amount of scrappage is coming off and being retired, we're replacing about 12 million to 13 million vehicles per year [industrywide]. I think if there's ever -- and there will be, I just don't know if it's going to be in 2012 or '13 -- a pickup given where our breakeven point is, the U.S. will be a very, very lucrative market.
We're reasonably well positioned. Our product cadence improves. We came out with [Chevrolet] Cruze last November, we came out with [Chevrolet] Sonic [in August], and Volt really started to kick in. We've had some good launches. You've got Malibu and Chevy Malibu with eAssist [in the first quarter of 2012]. Going into '12 it really does start to get healthier and pick up.
Are you worried about capacity for the Chevy Cruze?
We're running Lordstown all out, and we're looking at contingency plans.
What kind of volumes do you need before it makes sense to go to a spillover?
I would say north of 30 [thousand]. If you let it get to 50 [thousand], I think it's a mistake. We can batch them somewhere if we need to. Let's say that all of a sudden we're selling 300,000 [Cruze] units in the U.S. instead of 200,000. We'd better be working hard to fix that.
The full-sized truck program got sidetracked during bankruptcy. Are you accelerating that program?
As you know, we're taking all three North American plants offline for multiple weeks in 2012, so we're kind of locked and loaded. We have changed some priorities, but that one, we're not going to muck around with.
Is that timeline different from when you arrived?
No. We know we're running inventories a little high in trucks right now although it's been reducing. You saw our last month sales were up significantly. It cut it back more than we thought, quite candidly. We're not going to step it up between now and the end of the year. We're just going to keep it where we were. We know we're going to end up at the end of the year with a higher count than we forecast.
One reason the Colorado mid-sized pickup can come to the United States is because it has the volume overseas. Could we see more Chevrolet vehicles in the U.S. lineup because they have overseas markets?
Yes. Sixty percent of Chevrolets are sold outside the United States, and if you think only of the U.S., you're making a serious mistake. We are an American company that has a global presence and a global business and we've got to compete everywhere. When we gain scale -- and that scale can manifest itself in product development, engineering and all the like --by producing more overseas or trial overseas in the case of Colorado, that isn't all bad.
Talk about Cadillac. How are you going to compete on a global scale?
Cadillac is one of our two dual-global brand strategies. Cadillac is, candidly, largely a North American brand today. We expect by 2020 that roughly 40 percent of the premium brands in the world will be sold in China. By this time next year, we will be producing Cadillacs in China, and that's a huge statement about what we think about it as a global brand. Ultimately we hope to introduce Cadillac into Europe. We really buttressed the global presence of Cadillac by virtue of coming out with the upper brand XTS and a smaller Cadillac, the ATS.
The U.S. dealer channel is supposed to be Buick/GMC, Chevrolet and Cadillac. Is that pretty much where you want it to be now?
Yes, I'd say it's about where we want it to be. You know we have about one-fifth fewer dealerships than we had. One of the things that really worried me ... is that whenever you eliminate a brand or a product, you always run the risk that a customer will go somewhere else. Where's the Saturn guy going to go? Where's the Pontiac guy going to go?
We have traversed that minefield well to date. We can't let our guard down, I don't think, for another four or five years. We need to remember that because someone who bought a Saturn in 2007 may not buy another car until 2014. We'd better be there.
The National Automobile Dealers Association has been raising quite a stink about factories forcing dealers to make large investments in their stores. How would you characterize your efforts?
I would say we're concerned about how some of our dealers look like they were right out of the '50s and '60s. We do have specific programs for certain areas of the country to help spiff those up and bring them into the 21st century. We're trying to be a partner, not a critic, but kind of recognizing the reality.
Would you rather go into a competitor store that looks bright and open and [has] easy access? Or something that looks kind of like a Dunkin' Donuts from the 1980s? I think if I were a businessman, I would be hard-pressed not to accept the assistance we're willing to provide.