‘Laser-focused’ on profits, GM letting go of the past
CEO puts emphasis on which vehicles will sell the best
The general in General Motors is fading fast.
Ninety-three years after legendary GM CEO Alfred Sloan famously declared the automaker would sell “a car for every purse and purpose,” the nation’s largest automaker is focusing more on building models that people are actually buying.
The strategy was outlined again Tuesday as GM reported an almost $1.7 billion profit in the second quarter, down about 42% from a year earlier.
CEO Mary Barra is fervently pursuing an emphasis on vehi- cles that stand the best chance of becoming the hottest sellers — crossovers, SUVs and pickups — and all the while looking ahead to the next era, when self-driving vehicles are expected to hit the roads.
That strategy means GM could scrap some notable models. The six cars Reuters says could be eliminated include famous names
such as the Buick LaCrosse, Chevrolet Volt and Impala along with the Cadillac CT6 and XTS and Chevrolet Sonic.
“What it demonstrates is GM is laser-focused on profit, which is something that historically we have not seen,” Autotrader.com analyst Michelle Krebs said.
So far, the strategy to focus on hotter sellers hasn’t done much to help the company’s stock, which has hovered in the mid-$30s for most of Barra’s threeyear tenure as investors continue to show little interest in oldschool automotive companies. GM shares closed at $35.57 a share, up 25 cents, or 0.7%.
After GM released its secondquarter earnings Tuesday, Barra hinted the company would consider increasing its cost-cutting targets, pledging “bold and decisive actions” to bolster profitability and prepare for a seismic shift toward self-driving cars.
GM has already shown it’s serious about investing in family-haulers such as crossovers and SUVs, including the recently redesigned Chevrolet Equinox, Chevy Traverse, GMC Terrain and Buick Enclave. Those vehicles are connecting with shoppers, who are abandoning passenger cars in droves.
GM’s second-quarter market share in crossovers sold to individual customers rose 1.7 percentage points compared with the same period last year.
“This is a strong starting point,” Barra said. “We’re going to be well-positioned to capitalize on that growth.”
Though its stock price may not reflect it, there has been plenty of good news at GM.
Eight years after its government bailout and bankruptcy, GM is consistently profitable and more willing to navigate sharp corners when the road curves unexpectedly.
This year, GM has already sold its languishing European division, reversing a decision Barra’s predecessor had made several years earlier. It also ended sales in the disappointing India market and shed South Africa operations.