GM Vice Chairman: 4 Things Driving Automaker's Turnaround
General Motors is on the road to recovery after its successful IPO in November. GM Vice Chairman Stephen Girsky told CNBC on Tuesday there are several factors contributing to the automaker’s turnaround.
“We’ve got a business model that allows us to make money at the low point in the cycle, we’ve got a very conservative balance sheet with virtually no debt and we have significant exposure to emerging markets,” Girsky explained.
Equally as important, he added, is that the company now has a product line that is much broader than it had been.
“No longer is GM just a large truck and SUV company. We make money on crossovers, we have a lot of small cars hitting the market that are very credible and very competitive and we think it’s important to be able to make money in all segments of the this market, and we’re in process of doing that.”
One of the company’s biggest triumphs is the hybrid Chevy Volt, which was named the 2011 North American Car of the Year at the North American International Auto Show in Detroit.
“The Volt is fantastic technology,” said Girsky.
“My wife has been driving one for the last two months, and she gets 90 miles to the gallon. This is fuel economy that’s been unheard of in this market. It’s cutting-edge technology. GM is in the forefront of this, and we plan on aggressively pursuing this technology and broadening out.”
Mike Jackson, CEO of AutoNation and the guest host of CNBC's “Squawk Box” on Tuesday, questioned the $40,000 price tag of the Volt, saying it is “not sustainable.” (See Mike Jackson's CNBC appearance here.) Girsky replied by saying the company is working to “aggressively take the cost out of the Volt.”
“This is new technology, it’s just getting started,” Girsky added.
“As this technology develops and volumes improve, we would expect costs of the Volt and Volt-like technology to decline substantially, making the car more affordable to consumers.”
Girsky declined to comment on reports that GM is interested in potentially buying back a stake in Ally Financial, which was formerly GMAC.