* Girsky: new products to boost GM profit in South America
* GM alliance with Peugeot to be driven by new-product
* Girsky: alliance with Peugeot could be expanded
By Bernie Woodall
April 4 General Motors Co will reverse
2011 losses in South America and turn a profit in the region
this year, GM Vice Chairman Steve Girsky told an industry
conference on Wednesday.
Girsky said GM will make money in South America partly
because of a refreshed product portfolio that was allowed to
become stodgy in recent years.
Three new products for South American markets have been
introduced and six more are on the way this year.
"We're happy with the reception" of the new products, Girsky
said. "We've got revenue opportunities and cost opportunities in
Latin America and I would argue we're taking advantage of both
of them. Latin America should be in the black this year."
Girsky made the comments at a Bank of America auto industry
conference for investors in New York on Wednesday.
In the fourth quarter, GM lost $225 million in South America
and for full-year 2011 lost $100 million after making a $800
million profit in 2010.
GM has not yet announced six of the new or refreshed
products that will be launched later this year. The three that
are already on sale are the Chevrolet Cobalt and Cruze sedans
and the S-10 mid-sized pickup truck.
In Brazil, the largest auto market in South America, the
Cobalt sedan, with sales of 15,627 in the first quarter, was
first with 23 percent of the market for sedans of similar size.
This version of the Cobalt was designed in Brazil for emerging
markets and bares little resemblance to the U.S. vehicle of the
The Cruze is second in Brazil among sedans its size and the
S-10 is first among its peers such as the Toyota Motor Corp
Hilux. In most of the world, GM sells the S-10 as the
Chevrolet Colorado, which was launched last year.
NO DETAILS ON OPEL
Girsky also said that he believes the weak European auto
market has bottomed out, but he declined to say when that
region's economy will strengthen to the point that GM's European
operations will make money.
GM has lost $12 billion in Europe in the last dozen years,
and Girsky reiterated GM's stance that its European unit Opel
was on its way to breaking even last year before the region's
economy took a downturn in the second half of 2011.
Girsky did not offer timing for GM's European operations,
which are dominated by Opel. Chevrolet has a small but growing
presence in Europe, and Girsky said the company is considering
merging some office functions of Opel and Chevrolet to cut
Analysts at the industry conference failed to get the former
Wall Street analyst to detail plant closure plans for Opel,
which is in an alliance with France's PSA Peugeot Citroen
Girsky said that there will be "no big bang" that will
transform GM plans in Europe and with Peugeot, but rather
incremental moves in the alliance.
Girsky said GM looks at the alliance mainly "in the context
of Europe," while Peugeot considers the alliance and its global
options. And there are global projects to share, he said.
"In fact, it's not clear whether the first product of this
thing is actually going to be a Europe product or more of a
global product. There's a timing issue there," said Girsky.
As he has said in the past, Girsky said that the alliance
with Peugeot gives GM "another tool in the toolkit" to help it
as it attempts to increase its market share in Europe.
"We are a 6-and-a-half percent-share company and we're
competing with a 20 percent share-company, namely Volkswagen
," said Girsky.
"We view Peugeot as a fundamentally good car company with a
bad footprint," he said.
Recently, Peugeot said its alliance with GM may expand to
cover more vehicle categories and technologies, including a
small car for the South American market.
Girsky said that GM will work with Peugeot as new products
are launched and decide after a few of them whether to deepen or
cut off ties.
Peugeot recently said it is considering broader cooperation
with GM to cover more vehicle programs.
"I think there's opportunities to expand this," he said.
"Our plan was to start small and have the flexibility to add
more things to it. If those work, you can add even more to it.
There are plenty of cost opportunities to go deeper into this
relationship, but we need to walk before we can run."
Girsky told the audience of auto industry analysts that he
is often reminded of his days as an analyst when he wrote
headlines for reports critical of GM. He was asked what kind of
headline he would write about today's GM and how it stands.
"Good, and plenty to do," he said.