GM pleased with introduction of crucial big pickups: CEO

WARREN, Michigan Wed Jun 26, 2013 11:35am EDT

Dan Akerson, CEO of General Motors, speaks at the Boston College Chief Executives' Club of Boston luncheon in Boston, Massachusetts June 13, 2013. REUTERS/Brian Snyder

Dan Akerson, CEO of General Motors, speaks at the Boston College Chief Executives' Club of Boston luncheon in Boston, Massachusetts June 13, 2013.

Credit: Reuters/Brian Snyder

WARREN, Michigan (Reuters) - General Motors Co's (GM.N) introduction of its redesigned full-size pickup trucks, which are critical to boosting profits, has probably been the U.S. automaker's smoothest product launch ever, Chief Executive Officer Dan Akerson said on Wednesday.

The introduction of the 2014 Chevrolet Silverado and GMC Sierra is crucial, as the big trucks generate more than $12,000 per vehicle in profits. It is the most important vehicle introduction for the Detroit automaker since its bankruptcy and $50 billion U.S. taxpayer-funded bailout in 2009.

The trucks, which were last redesigned in 2006, are also a linchpin in GM's ongoing battle with No. 2 U.S. carmaker Ford Motor Co (F.N), whose F-150 truck is the auto industry's top-selling vehicle. GM's rollout will continue through this year and into next as it introduces different models of the big trucks and companion full-size SUVs.

GM's current big trucks and related SUVs account for about 60 percent of the company's global profit, according to analysts. Citi has estimated the new models could bring the automaker more than $1 billion in additional operating earnings in 2013 and 2014.

"We've produced tens of thousands of these new trucks," Akerson told reporters at the company's technical center in suburban Detroit. "Initial cut is it's probably our best launch ever."

Akerson was at the technical center in Warren, Michigan, to celebrate GM's performance in last week's J.D. Power and Associates initial quality study. The No. 1 U.S. automaker led the industry, with eight vehicles garnering top honors in their segments. He called it the most memorable day in his GM tenure, topping the November 2010 initial public stock offering.

David Sargent, vice president of global automotive at J.D. Power, said things would only get tougher for GM. Many of this year's award winners were older models, while the company is launching numerous redesigned vehicles, including the new pickups, in 2013 and 2014.

Sargent was in attendance to present the awards in front of more than 1,000 GM employees and dealer officials.

New models typically have more quality and customer satisfaction issues, causing scores on J.D. Power's survey to be lower. However, Akerson cited the Buick Encore SUV, a newly launched vehicle that still managed to win the J.D. Power quality award for its segment.

Sargent also told employees they had only done half the work. While the company has raised the quality of its vehicles, the perception with the public still lags.

"The perception of your quality is nowhere near where the reality is," he said. "You have the best initial quality in the industry, and if you go out on the street, nobody would say that."

He said 44 percent of GM customers cited expected reliability as a major factor that drove them to buy one of the company's vehicles. That number is 67 percent for Toyota Motor Corp (7203.T) and 72 percent for Honda Motor Co (7267.T).

Akerson acknowledged as much. "This honor will mean very little if we do not build on it," he told employees. "I don't want to backslide."

Akerson also announced that Alicia Boler-Davis would shift her responsibilities for quality and customer experience to a global scale from just the U.S. market. She will report directly to Akerson.

GM has made customer satisfaction a focus, saying every percentage point gained in the company's customer retention rate equals $700 million in annual revenue.

Shares of GM were up 0.8 percent at $32.08 in morning trading.

(Reporting by Ben Klayman in Warren, Michigan; Editing by Gerald E. McCormick and Lisa Von Ahn)

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Comments (1)
Brother_Bluto wrote:
GM needs it head checked. Can’t believe they decided to wait on launching the the new body style on the 2500/3500 trucks. Now it is looking like after Jan 2014 as a split model year… or could be labeled a 2015. Last 3 trucks have been GM, but time to check out Ford.

Jun 26, 2013 1:35pm EDT  --  Report as abuse
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