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GM Targets $1 Billion in North American Savings
General Motors Co. aims to boost its adjusted North American earnings before interest and taxes to 10% of revenue by mid-decade from 7.4% in 2012, according to Chuck Stevens, CFO for the company's unit in that region.
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General Motors Co. aims to boost its adjusted North American earnings before interest and taxes to 10% of revenue by mid-decade from 7.4% in 2012, according to Chuck Stevens, CFO for the company's unit in that region.
Stevens tells an auto conference in New York City that to do so, GM expects to reduce North America fixed costs to about $20 billion per year from $21 billion last year,
Those savings include trimming regional overhead expenses by 6%, aided by an ongoing plan to bring 90% of the company's information technology work in-house. GM also has targeted a 5% cut in manufacturing costs, in part by doubling the number of lower-paid new hires to 10,000 people, or 20% of the hourly workforce, as current employees retire.
The company anticipates saving another $1 billion in North American materials expense by mid-decade by hiking the proportion of new models built on global platforms from 60% now. GM's goal is to increase that percentage to 95% by 2018.
In addition, Stevens says the company aims to expand regional sales by $1 billon annually. He notes GM will debut twice as many new and revamped models through 2016 as it did in the previous four years. The company also expects to boost revenue through improved customer relations, higher vehicle resale values, a stronger Cadillac brand and greater use of the GM Financial lending unit.
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