Automotive News Europe - January 2013 - 12

AUTOMOTIVE NEWS EUROPE

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GM boss bullish on new Opel models
It’s been extraordinarily insightful to share data with our friends at PSA.
Dan Akerson

eneral Motors CEO Dan Akerson is steadily putting his stamp on the automaker. He is forging a cost-saving alliance with PSA/Peugeot-Citroen and is bullish about Opel’s entry into new segments. Akerson met recently at GM headquarters in Detroit with Automotive News Editorial Director Peter Brown, Industry Editor James B. Treece and Staff Reporter Mike Colias to talk about the company’s future. Automotive News is a sister publication of Automotive News Europe. How would you characterize the PSA/ Peugeot-Citroen partnership so far? We’ve been in constructive dialogue for a long time. It’s complicated because the uncertainty surrounding the European market specifically makes any move in this area one that has to be carefully considered. You want to advantage yourself, but at the same time you don’t want to disadvantage yourself by making a strategic error. I think people were surprised and the analyst community was surprised in the third quarter when we were cash flow positive. That is not nearly good enough, so we have a long way to go, but there are green shoots in terms of what we’re seeing. Could you elaborate? We’re in new product segments that we were not in. These are the [Opel/ Vauxhall] Adam and the Mokka, which has over 50,000 orders. These aren’t just wish list [orders]; these are good orders. The Adam has gotten rave reviews versus the Mini and the Fiat 500. We need to solidify our market position. We need to improve on our material costs. It’s been extraordinarily insightful to share data with our friends at PSA. Opel is not alone in having financial trouble in Europe. Only Volkswagen among the mass-market brands is doing OK. What’s Volkswagen’s secret? I know you follow people and appointments within the industry. We’ve hired a number of Volkswagen people, so we have some specific insights into that which may or may not be right. I admire

Volkswagen. They’ve got good position, and I think we can learn a lot from our competitors. Benchmarking is critically important in any industry and in this one in particular, but what we have found is we’re not nearly as competitive as we might have thought on material costs, and we really have to make that a priority in terms of finding our way to success. Are your overall costs uncompetitive in Europe? It’s interesting. In certain aspects of the P&L we’re more competitive than our competitors [such as] overhead costs. Where we find our deficiencies is in the material costs, and it depends on the platform. In some platforms we’re competitive and in others we’re not. You can’t just say things are OK generally. You really have to drill down into specific segments and demographics to improve your competitiveness. If Europe were not in a sales slump, would we be having this discussion? We were making money in the first half of 2011. The summer of 2011 is when the whole issue of sovereign debt became a problem, and that’s the quarter we, the United States, were downgraded and there were questions of whether we would default on our debt. You could see consumer confidence in this country dive. I’ve been in Europe, as you might imagine, a number of times lately, and the drumbeat we Americans heard incessantly during 2008 and 2009 — it’s always a mistake to focus on your ‘home market’ — is being played almost incessantly every day in Europe, and it is not positive from a consumer-confidence perspective. What is the overall problem in Europe?

Meet the boss
❚ NAME: Dan Akerson ❚ TITLE: GM CEO ❚ AGE: 64 ❚ BASED: Detroit ❚ NATIONALITY: USA ❚ MAIN CHALLENGES: End chronic

losses at Opel/Vauxhall; successfully weave together parts of GM’s and PSA’s businesses to save billions in the future.

There’s been a general malaise in Europe. They’re at 20-year lows in terms of demand. You have to get your costs in line with projected demand. As we’ve met with various executives as we do our search for a leader in Europe, we’re very open and transparent, and we show them the financial projections we had. I talked to one of these guys and he said, ‘Well, I’ll give you credit. You guys are not looking at this through rose-colored glasses. You’re very objective, steely-eyed about the prospects of Europe over the next two or three years,’ which I think we need to be.

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JANUARY 2013

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Automotive News Europe - January 2013

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