GM CEO sees higher U.S. auto sales in 2015
General Motors Co. CEO Mary Barra told reporters Thursday she expects steady growth of U.S. auto sales this year, reaching 16.5 million to 17 million with the help of growing employment, low gas prices and expected younger and first-time buyers. Sales grew 5.9 percent in 2014 to 16.5 million sales, the highest level since 2006.
Barra met with reporters for about 55 minutes at GM’s Renaissance Center headquarters ahead of the 2015 North American International Auto Show next week and nearly a year after becoming CEO. Her assessment is similar to other predictions for 2015 from analysts, some who see GM benefiting from low gas prices with sales of more profitable trucks and SUVs.
She said she is “cautiously optimistic” about GM and the industry in 2015. She said market share “growth is important,” but she will look for profitable growth that maintains GM vehicle resale values and builds brands.
Barra, the first female CEO for any automaker, had star status at last year’s Detroit auto show. But she and the company faced many challenges in 2014. Her first year was marred by a record 30 million vehicles recalled and the payment of a $35 million fine to the National Highway Traffic Safety Administration after GM delayed a recall of 2.6 million vehicles now linked to 42 deaths and 58 injuries for ignition switch defects. She testified four times before Congress on the company’s safety record.
“Getting by is not my idea of winning,” Barra said, saying she is pushing for more changes at the company. In 2015, she said, “We will definitely pick up the pace.”
Barra called 2014 “a year of great disappointment, but also great progress.”
She said the company has not solved all of its problems, but is committed to addressing them head-on. Barra said she has made it clear to employees that GM will be an industry leader for safety and she wants GM to become a zero safety-defect company.
Barra also emphasized she wants results and she hates excuses. GM has changed the way it creates mid-term plans and performance ratings. Leaders will be held accountable for results no matter what, she said. Executives last year began working under a new pay structure. Those who don’t meet what they committed to do will see pay reduced, with higher-ups being more at risk with the most variable pay.
“I know we have to own our results and we have to be responsible regardless of what the circumstances are,” Barra said.
She also said she has become more determined over the past year.
“Maybe I would have accepted longer time lines to accomplish something,” she said. “Well, no more.”
David Cole, chairman emeritus of the Center for Automotive Research and chairman and co-founder of the nonprofit AutoHarvest, said it was by no means an easy year for Barra. Cole said the company released strong new products and remained profitable.
He said Barra’s training in manufacturing “has prepared her because manufacturing is not easy... She really understands the business” and has “gotten tremendous internal support.”
GM’s U.S. sales last year totaled more than 2.93 million, up 5.3 percent from 2013, though GM’s market share slid to 17.8 percent from 17.9 percent a year earlier. The Buick brand’s U.S. sales jumped 11.4 percent, GMC 11.3 percent and Chevrolet 4.4 percent. Cadillac brand sales fell 6.5 percent.
Last January, Barra said she wanted to accelerate goals laid out by former CEO Dan Akerson such as breaking even in Europe by mid-decade, hitting 10 percent margins in North America by mid-decade and growing the company’s brands. Barra said Thursday there are no changes to GM’s break-even targets for Europe, despite issues in Russia.
Barra spent much of 2014 embroiled in the ignition switch recall crisis of 2.6 million older Chevrolet Cobalts, Saturn Ions and other small cars. GM set up an independent compensation fund for victims and their families and through the end of September, costs related to the ignition switch and other recalls totaled $2.7 billion.
The automaker also faces investigations from the Justice Department, Congress, state attorneys general and the Securities and Exchange Commission — as well as numerous lawsuits.
Barra said it was too early to comment on the size of bonus checks for UAW hourly workers this year. She declined to comment when asked whether she thought two-tier wages could continue, other than that GM needs to “make sure we are on par and competitive from an industry perspective.”
She shied away from answering many direct questions about upcoming negotiations this year with the UAW on a new union contract. But Barra said she agreed that a UAW strike would be a failure by both parties.
U.S. industry auto sales last hit 17 million sales for a year in 2001. GM said it also sees the return of young and first-time buyers in the U.S. auto market, which could help brands such as Chevrolet which has a new midsize pickup and has launched seven small cars and crossovers the past four years. The new small Trax SUV hit showrooms in December.
GM’s stock fell about 15 percent in 2014. Morgan Stanley analyst Adam Jonas, in a recent investment note, said he looks at GM’s stock more favorably now than the same time a year ago, and he questioned if the stock could hit $40 a share in the first quarter. The stock closed up 1 percent Thursday, closing at $36.20 Thursday.
mburden@detroitnews.com