GM says cost-cutting nearly done, sales chief out
DETROIT (Reuters) - General Motors Co is on track to complete a wrenching cost-cutting but faces risks from an uncertain U.S. economy and rising unemployment as it tries to win back consumers, the automaker said on Wednesday.
In an update on GM's progress in the three months since it emerged from bankruptcy, Chief Executive Fritz Henderson also said Mark LaNeve, the company's top U.S. sales executive, would be leaving the company.
LaNeve, 50, becomes the latest senior GM executive to leave at a time when Henderson is pushing to change the culture of the 101-year-old automaker under the scrutiny of a new board demanding quick results.
Susan Docherty, 46, a veteran GM executive whose career has included stints managing the now-scrapped Hummer and Pontiac brands, was named to replace LaNeve.
Henderson declined to discuss what he called rumors that Chief Financial Officer Ray Young would also depart.
GM's new 13-member board, led by Chairman Ed Whitacre, met this week in Detroit for the third time since the new company was launched out of bankruptcy with $50 billion in U.S. government funding.
At the board's prior meeting, directors discussed the possible departure of Young and made it clear the U.S. sales team would have to deliver a quick turnaround to avoid a shake-up, people familiar with the discussions have said.
GM ended the third quarter with its global and U.S. market share above initial targets, despite a high-profile bankruptcy that hurt its credibility among consumers.
GM said its global market share was 11.9 percent in the third quarter. Its U.S. market share -- including brands being scrapped, such as Pontiac and Saturn -- was 19.5 percent, down from 22.1 percent at the end of 2008.
Henderson also said GM expects to close deals to sell its Saab and Hummer brands by the end of 2009 and is preparing for an initial public offering in 2010 that would reduce the U.S. government's majority ownership stake.
Discussions with senior representatives of Sichuan Tenzhong Heavy Industrial Machinery Co, a Chinese company seeking regulatory approval to buy Hummer, continued this week in Detroit, Henderson said.
"The buyer is very interested in getting the deal closed," Henderson said.
BOARD "PUSHING US TO MOVE FASTER"
Henderson, who took the top job when his predecessor Rick Wagoner stepped down at the request of the Obama administration, said GM expects to finish its remaining restructuring this quarter. That would end a troubled four-year period in which senior management has been focused almost exclusively on managing costs as U.S. auto sales slumped.
"The new board wants us to complete the restructuring actions as much as possible by the end of (2009)," Henderson said on a conference call with reporters and analysts. "They are pushing us to move faster on all the fronts."
GM's U.S. market share has slid from near 29 percent in 2002.
As GM aims to reverse that decline, Henderson vowed to speed up decisions on new products and to work to "rebuild" the image of the brands it is keeping, Chevy, Cadillac, GMC and Buick.
"I view this as both a sprint and a marathon," he said.
GM will provide more financial details when reporting third-quarter financial results in mid-November.
The U.S. government now owns about 60 percent of GM, which was unseated last year as the world's largest automaker by Toyota Motor Corp.
Since the end of 2008, GM said it has closed four U.S. plants, cut 12,800 hourly workers and dropped 5,400 salaried workers from its payroll.
The automaker needs to cut another 9,200 jobs represented by the United Auto Workers union to bring its U.S. factory work force down to 40,000, the target in its May restructuring plan. At the end of 2008, it had employed 62,000 in U.S. factories.
The update on what GM has achieved in its first 90 days out of Chapter 11 represented a greater disclosure than the details provided to date by GM's smaller rival Chrysler Group LLC.
Chrysler, now under the control of Italy's Fiat SpA, has reshuffled management twice since emerging from bankruptcy but has not yet answered questions on its strategy.
Chrysler, which took $10 billion in U.S. funding, has said it will disclose a new five-year plan on November 4.
The departure of LaNeve was announced in a statement e-mailed to the company's 5,800 remaining dealers on Wednesday. Henderson said LaNeve would leave to take a job outside the auto industry but declined to name his new employer.
LaNeve, who spearheaded the revival of the automaker's luxury Cadillac brand earlier this decade, oversaw a crushing decline in U.S. sales since 2005.
Henderson had not initially named a successor for LaNeve and indicated that the automaker could look outside its ranks to fill the post as Ford Motor Co did when it hired sales and marketing chief Jim Farley away from Toyota in 2007.
But Wednesday evening GM announced Docherty would take the post and join the nine-member executive committee charged with steering the company.
Docherty led the Hummer brand in 2004, just before high gas prices and a backlash against big SUVs nearly killed the brand. She also was regional manager for the Western United States, a market where GM badly trails import brands led by Toyota.
(Reporting by Kevin Krolicki and David Bailey; additional reporting by Soyoung Kim; editing by Gerald E. McCormick, John Wallace and Carol Bishopric)
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