General Motors has come a long way in three years. But GM has far to go to solidify its long-term future. That was the message from CEO Dan Akerson at the automaker's annual meeting today in Detroit.
Having already roared back from bankruptcy three years ago, returned to profitability, and launched a number of winning new products, GM has been trying to consolidate and build on those gains worldwide. It's easier said than done, of course. GM was the world's largest-volume automaker in 2011, but even that crown looks more iffy this year with Toyota recovering nicely.
Akerson stated today that GM is in the process of boosting quality and replacing or refurbishing 70 percent of its North American model lineup over the next two years.
"We are now in the early days of one of the biggest global product offensives in our history," he told shareholders and analysts in his speech. He said the impact of new vehicles "will be especially profound in the United States," citing the new Buick Verano small sedan as an example. GM today announced a turbocharged version of the car.
And in fact, the CEO and his fellow directors also got a chance to see first-hand where Verano and one of the other promising new North American products, the Chevrolet Sonic subcompact, are built. They toured a suburban Detroit factory where many of the Sonic's assemblers are on the lower wage tier of a new, post-bailout, "two-tier" compensation system, which is why it can be built — apparently profitably — in the United States at all.
Akerson made no bones about the many challenges ahead for GM. He focused on Europe, where the market has sunk with the eurozone's woes. "We see a corner" there, Akerson said, "but a lot of work to be done." GM has been trying to consolidate its money-losing Opel operations and figure out where its global Chevrolet brand fits in Europe as well.
And he admitted that he's disappointed by GM's profitability: The company ranks 20th in profits among the Fortune 500 though fifth in revenue. One big obstacle he noted was discussed thoroughly in a page one story in the Wall Street Journal this morning: a mushy middle of GM bureauracy and middle management worldwide who still are stepping on one another's toes and posing obstacles even though there are many fewer of them than just three years go. Akerson said before the meeting that he's still working on that problem.
The GM CEO has been talking about succession lately as well. One more worry before he goes: whether the U.S. economy and so-far-dependable automotive recovery might stall or slow as a result of America's increasingly erratic economic performance. At least that's a concern Akerson shares with his competitors.