“We need to repay the money we borrowed.”
In his first media conference since assuming the post as president of General Motors North America, Mark Reuss said that the priority for 2010 is to payback taxpayers the $50 billion the reorganized company owes.
The goal came out a meeting yesterday Reuss had with Ed Whitacre, the taxpayer-appointed Chairman of the Board, who also assumed the title of CEO last week when Fritz Henderson “resigned.”
“We need to repay the money we borrowed,” said Reuss. “I think everybody in this company wants that desperately.” Reuss went on to say we also want to make “North America proud of GM, its employees, its products and its dealer – and we want to do that fast.”
“The only way to start doing that is with our products and how we sell those products, and how build and develop those products,” Reuss added.
If a successful stock offering, or initial public offering (IPO), is to be accomplished, GM needs to build momentum with a series of clear wins starting on its balance sheet. In the first quarter since it emerged from bankruptcy, GM Company lost $1.2 billion.
GM can no longer force cars on the market just to buy share. “That’s a bad behavior.”
In order to stop the flow of red ink, Susan Docherty, the newly appointed vice president, sales, service and marketing, promised to win in the market and eliminate GM as the number one provider of expensive incentives to prop up sales.
By going from eight brands and concentrating on four brands, Docherty promised “to earn our market share, and that’s were the big difference is to holding ourselves accountable.”
While financial performance is lagging, sales appear to stabilizing. Recent product introductions are doing well, and if the company can indeed wean itself from fleet sales and maintain or increase retail market share, then a success story — so clearly needed for a stock offering — can be crafted.
One encouraging sign comes from a just released J.D. Power study that showed all of GM’s remaining core brands – Buick, Chevrolet, Cadillac and GMC – are above average in customer sales satisfaction.
Still, Docherty cautions that much work needs to be done in the ongoing transition of bad GM marketing practices. For example the aging Chevrolet Cobalt which will be replaced by the Cruze next fall, needs to continue to meet demand, but GM cannot force cars on the market just to buy share.
“That’s a bad behavior,” said Docherty. “It’s one that’s not going to lead us to success.”