New GM Viability Projects Slide In Market Share
27 Avril 2009 - 8:26PM
Dow Jones News
DETROIT (Dow Jones) -- General Motors Corp. (GM) for months has
maintained it could hang on to U.S. market share despite moves to
ax brands and nameplates.
But the auto maker on Monday conceded its likely to lose ground
in its key market as it undertakes a new round of deeper cuts. New
projections call for an 18.4% market share by 2012, down from the
20% GM projected in February.
Under the new plan, GM lowered its break-even point in the U.S.
to 10 million car and truck sales. The company's previous plan
would have required the U.S. market to reach 11.5 million before GM
would stop losing money. The annual sales rate in March was 9.9
million vehicle sales.
GM has faced criticism on Wall Street for overly rosy
projections for the U.S. market and the company's ability to
perform. Just six months ago, GM was planning for a U.S. market of
12 million car and truck sales.
The projections were a key point of debate between the auto
maker and U.S. Treasury, with GM arguing the depressed market has
been tracking where the company anticipated.
The auto maker on Monday rolled out a more aggressive
restructuring plan that calls for further job cuts, an additional
plant closing and the elimination of Pontiac, along with the
previously announced elimination of the Saab, Hummer and Saturn
brands.
GM Chief Executive Officer Fritz Henderson said market losses
will be driven largely by the auto maker's move to shed half of its
eight brands.
The downsizing should allow GM to maximize capacity at its
remaining factories. To be profitable, an auto plant typically
needs to use at least 80% of its capacity. GM's factories will run
around 50% capacity this year, then reach 120% utilization by 2012,
under the new plan.
GM also sees its hourly labor costs shrinking to $4.1 billion by
2014, from $7.6B In 2008.
-By Sharon Terlep; 248-204-5532; sharon.terlep@dowjones.com.