GM CEO Barra, "less patient." than before.

It was a “year of great disappointment, but also a year of great progress,” said General Motors CEO Mary Barra as she summed up her first, tough year on the job and outlined the challenges and goals she is facing for 2015.

The first female CEO of a major global automaker, Barra took on her new role just weeks before GM announced the recall of 2.6 million vehicles equipped with faulty ignition switches now linked to the deaths of at least 42 people. That was clearly apparent in the comments the 53-year-old Barra made, stressing her intent to turn GM into a “zero-defects company.”

On a personal level, the GM CEO said the events of the last year have made her “more impatient and more determined” to deal with a corporate bureaucracy that had, in the past, made it difficult to achieve any real change – and which led to not just the recall crisis of 2014 but the GM bankruptcy five years earlier.

“I may have accepted longer timelines to get things accomplished” before becoming CEO, said Barra. “No more.”

(Automakers ride a sales tsunami into 2015. Click Here for more.)

For automakers, in general, safety became the big issue of 2014, the industry overall recalling about 60 million vehicles for various safety defects, or nearly twice the previous record set in 2004. But GM products accounted for about 27 million of those recalled last year.

"My goal is to be a zero-defect company," says Barra.

Barra took a quick and aggressive role in dealing with the problem, testifying repeatedly before Congress, and ordering major changes within GM, including the appointment of a new corporate safety czar who ordered many of those recalls to deal with issues the maker had downplayed before.

“It was the right thing to do, even when it was hard,” Barra told reporters gathered at GM headquarters in downtown Detroit.

The safety scandal was by no means GM’s only problem last year. The maker continued to suffer losses in Europe, where its Opel subsidiary has been running up deficits since the beginning of the new Millennium. Meanwhile, though GM posted overall sales gains in the home market, its flagship Cadillac division delivered a 6.5% decline in demand in 2014.

That was not entirely unexpected. Caddy’s new global President Johan de Nysschen had signaled a willingness to accept lower sales as a result of raising prices to put products like the new CTS midsize luxury sedan more on a par with those of competitors such as Mercedes-Benz.

The turnaround of Cadillac, said Barra, “is not going to happen overnight,” adding that “We’re disciplined and committed” to the plan de Nysschen, formerly the head of luxury competitor Infiniti, has laid out.

That said, Cadillac this week announced price cuts of as much as $3,000 to help revive sales of the struggling CTS model.

(Click Here for more on Cadillac’s price cuts and long-term strategy.)

Looking out at the U.S. market overall, GM’s Barra said she expects to see sales continue climbing this year, forecasting volumes somewhere between 16.5 million and 17 million, “probably right in the middle of that range.”

"We're going in to win, not just compete."

Barra said she is hoping to take advantage of that continued growth, but stressed that the maker intends to avoid the mistakes of the past that meant it often was operating in the red even at times of record industry sales – as happened in the boom years leading up to the last Great Recession.

Among other things, she said GM will aim to match production to market demand, rather than pushing vehicles into showrooms and then hoping they will sell. The maker does offer higher incentives – an average $3,459 for the Detroit maker, $2,576 for the industry overall – but Barra also noted that it has higher average transaction prices.

In her prior role, Barra served as GM’s global product development chief, and she made it clear she was proud of the generally positive reception many of those vehicles have been receiving. But GM has to get even better, she stressed, declaring, “We’re going in to win, not just compete.”

One of the big challenges the auto industry will face in the coming year is how to cope with free-falling fuel prices. On the positive side, that has led to a surge in sale of some of GM’s most profitable products, such as the full-size Chevrolet Silverado pickup. But it has also led to a decline in the fuel economy of the average vehicle sold in the U.S. in recent months.

Barra said GM is focused on delivering the vehicles customers want – but she also stressed that it is not pulling back on the development of new high-mileage models, such as the second-generation Chevrolet Volt plug-in hybrid that will be formally introduced at the North American International Auto Show in Detroit next week.

“Over the long-term,” said Barra, the current decline in gas prices “doesn’t change our strategy at all.”

(For a sneak peek at the new 2016 Chevrolet Volt, Click Here.)

 

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