Alicia Boler-Davis, GM's senior vice president of global quality and customer experience, talks with GM CEO Mary Barra at the Detroit auto show this week. (David Coates / The Detroit News)
General Motors Co. began a new era of leadership with a new CEO and president on Wednesday, and stressed plans to leverage sales in its top two regions to bolster other global markets.
The company said it will launch 15 new or upgraded models this year in the U.S. after launching 18 vehicles last year; and in China, the company and its joint venture partners will launch 17 new or upgraded models this year.
“We continue to perform well in the two most important markets in the world: the U.S. and China,” GM CEO Mary Barra said in a statement. “We’re taking advantage of our strength in these countries to restructure and make the investments necessary to grow profitably in other parts of the world.”
China is GM’s largest sales market and newly named GM Chief Financial Officer Chuck Stevens said during a Deutsche Bank 2014 Global Auto Industry Conference Wednesday that he expects margin growth in China in 2015 and 2016 when GM is selling more SUVs and Cadillacs in the region.
In North America, Stevens said GM expects to boost its retail share this year and said 2014 is another “important step on our path to 10 percent” margins before interest and taxes in North America by mid-decade. Stevens said he expects continued improvement in margins and core operations this year in North America.
GM’s performance in Europe should improve in 2015, Stevens said. GM, which has lost billions in Europe since 1999 and has lost $499 million in Europe through the first nine months of 2013, Wednesday reaffirmed its expectation to break even in the region by mid decade. He said the company must solve challenges in Russia.
GM’s International Operations also are expected to see lower earnings and margin due to restructuring in 2014 compared to 2013.
“There’s a number of repair jobs that we need to start working on in the rest of Consolidated Operations,” Stevens said.
The automaker said it plans to spend about $7.5 billion on capital expenditures in 2014. It also expects to spend about $700 million to acquire Ally Financial’s operations in China by the end of the year, about $3.9 billion to redeem certain shares of stock and $1.8 billion on a new quarterly dividend announced Tuesday.
Dan Ammann, GM’s new president, said Wednesday that the company will continue its product onslaught and effort to build and restore value in its brands, improve transaction prices and boost residual values.
In his new role, Ammann will oversee GM’s regional operations, Global Chevrolet and Cadillac organizations, plus will oversee GM Financial, global planning, GM’s Global Connected Consumer business and OnStar. He reports to Barra.
Ammann joined GM in April 2010 and took over as chief financial officer a year later. He told Automotive News World Congress that while GM has had some recent product wins such as sweeping North American Car and Truck of the Year awards this week, competition is fierce.
“We’re going to have to keep doing more of what we’ve been doing just to stay ahead of the pack,” he said.
Some of GM’s redesigned products such as the 2014 Chevrolet Impala are translating into higher prices being paid by consumers as the company offers desirable, quality vehicles that offer customers value, Ammann said. GM’s average transaction price on the 2014 Impala is $7,400 more than the old model and its residual value has increased by 11 points. The 2014 Chevrolet Silverado is delivering $6,000 higher average transaction prices than the old model, Ammman said.
“We’re building on the strategy from before, bringing excellent vehicles, getting paid for them, getting recognized for them in the marketplace,” Ammann said.
Also Wednesday, GM appointed two longtime leaders into new executive roles, including naming Steve Hill as vice president of U.S. sales and service.
Hill, 53, had served as GM North America vice president of customer care and aftersales since 2010, replacing Alan Batey who last month was named GM North America president. As head of U.S. sales and service, Hill also will oversee sales and service for the Chevrolet, Buick and GMC brands, plus fleet and commercial sales.
Tim Turvey, 51, has been tapped by GM to replace Hill effective immediately. Turvey has served as executive director of customer care and aftersales and marketing since 2011.