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Automaker introduces new products, lowers its U.S. sales outlook
By Tom Krisher
Associated Press
Published on Wednesday, May 14, 2008
DETROIT: The U.S. auto industry is in a recession, but General Motors Corp. has prepared for it by cutting costs and rolling out new products, the president and chief operating officer said Tuesday.
Fritz Henderson, the automaker's No. 2 executive, said GM is selling below trends for the third straight year.
He blamed the sales drop on
the troubled housing market, tight credit and higher gasoline prices that are sending consumers from trucks to cars at a rate much faster than the company has ever seen.
But Henderson told a conference of banking and insurance-industry officials in Michigan that GM also is seeing sales growth in emerging markets.
He said the first quarter was about in line with GM's expectations, but April's sales drop surprised the company. He said GM sees more downside risk than upside opportunity for the remainder of 2008.
The automaker cut its industrywide U.S. sales outlook for 2008 to between 15.3 million and 15.5 million vehicles from 16 million at the beginning of the year, largely because of plummeting sales of trucks and sport-utility vehicles. That's still higher than Ford Motor Co., which is forecasting 15 million.
Some industry analysts have gone below 15 million, a 14-year low.
Henderson said the 11-week strike at parts-supplier American Axle and Manufacturing Holdings Inc. has had only a minimal effect on the company's retail sales, largely because it had built up a large inventory of pickup trucks and sport-utility vehicles when the market shifted to smaller vehicles.
American Axle makes axles, drive shafts and stabilizer bars mainly for GM's larger vehicles.
Henderson said the strike cost GM $800 million in earnings before taxes in the first quarter, and he said the company agreed to American Axle's request to kick in $200 million to help end the work stoppage by the United Auto Workers.
GM in the past has focused its advertising too heavily on trucks, but is in the process of shifting that ''to a new plan that's really going to focus on miles per gallon,'' said Mike DiGiovanni, executive director of global market and industry analysis.
He also said GM will roll out 14 new cars and crossover vehicles in the next 18 months, but only one new truck.
DETROIT: The U.S. auto industry is in a recession, but General Motors Corp. has prepared for it by cutting costs and rolling out new products, the president and chief operating officer said Tuesday.
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