GM does not see U.S. sales reviving this year
General Motors does not expect U.S. sales to revive this year as the credit crunch pressures consumers, with a senior official saying the top priority was to turn around the North American business.
GM, which has lost $51 billion over the past three years, will continue to invest in emerging markets such India and China and was on track for full-year profit growth in Asia, officials said.
“The most important thing we can do is to turn around the North American business,” Chief Operating Officer Fritz Henderson told reporters after inaugurating the leading U.S. carmaker’s second plant in India. The factory in the western Maharashtra state has an annual capacity of 140,000 units.
“We do not have a huge amount of optimism for the rest of the year as the pressure on consumer continues,” Henderson said.
The troubled carmaker has been under increasing pressure to cut costs and raise capital because of the slump in U.S payday loans. auto sales that pushed its first-half sales down 16 percent.
GM last week said it was offering early retirement incentives to about 28 percent of its U.S. salaried work force as part of its effort to reduce payroll expenses and conserve cash.
GM’s U.S. operation employs 32,000 salaried staff. GM has said it would cut white-collar costs by 20 percent as part of its effort to reduce overall costs by $10 billion and shore up cash.
Henderson said he was fairly confident of raising the required capital through secured borrowings and asset sales.