GM's CEO Says North American Operations Can Be Profitable
Richard Wagoner, chief executive officer at General Motors, told CNBC’s “Squawk Box” that he’s confident the company’s North American operations can be profitable.
“We’re basically running at a breakeven level,” Wagoner said Thursday. “I think it reflects a couple things. The relatively weak market we’re selling into, particularly on the retail side, although retail sales were up a little in the first quarter. We cut back a lot of low-profit business – fleet and daily rentals – and those were one-time cutbacks that we needed to do.”
General Motors lost $46 million in its North American business in the first quarter, compared with a loss of $292 million for the same period a year ago.
Overall, the company reported a first quarter net profit of $62 million, or 11 cents a share, down from $602 million, or $1.06 a share, in the same quarter a year ago. Revenue fell to $43.9 billion from $52.4 billion. Wall Street analysts expected the company to earn 87 cents a share on revenue of $40.88 billion.
GMAC, the company's residential capital unit lost $910 million in the first quarter, hit hard by troubles in subprime lending. GM owns 49% of GMAC.
“We’re continuing to strengthen Chevy’s product line,” Wagoner said. “We’ve got a very important product coming for Chevy later this year, the all-new Malibu. So, I think we’re getting good momentum in the Chevy brand and frankly feel that way across (all) retail sales. We’re beginning to get some traction from both product and marketing strategy.”
General Motors has closed plans and gotten healthcare concessions from the United Auto Workers union. Wagoner said he has worked well with the union and complimented the leadership and rank-and-file for working with the company in a “historic restructuring.”
“One never knows how these things play out,” Wagoner said. “If you look back over the last couple years, we’ve taken on some tough issues with the union. It hasn’t been easy to get some of this progress, but in the end we made the progress. In the end, I believe we’re going to continue to work together to do what’s right both for the company and for our workforce.”