GM CFO sees room for further U.S. cost cuts
DETROIT (Reuters) - General Motors Corp has room for additional cost cutting in its North American business, the automaker's chief financial officer said Sunday.
"We can definitely go further" with cost cutting, Fritz Henderson told reporters on the sidelines of the North American International Auto Show. He declined to give any cost-cutting targets.
From 2005 to 2007 General Motors, the No. 1 U.S. automaker, cut $9 billion in recurring costs.
GM, which has not reported its fourth-quarter and annual results, reached a cost-saving deal with the United Auto Workers union last year. GM has said it expects to realize most of the cost savings from that deal in 2009 and 2010.
Henderson said that the U.S. economic woes were a concern but does not expect to modify its current business plan because of slowing U.S. economic growth and concerns about a slowdown on consumer spending.
GM Chairman Rick Wagoner earlier Sunday predicted that the second half of 2008 would be better than the first.
GM has looked at various scenarios, including the possibility of a recession in the United States this year, Henderson said.
"That's something we usually do," he said. "That's something we have done more of given the uncertainty."
Henderson said GM is "pretty positive" about its liquidity position.
Henderson said that while the overall market for vehicles is expected to shrink in the first half, he expects the luxury segment to grow this year.
"I don't think anything will change" in the segment, he said.
He also said it was a challenge to deal with the strong Canadian dollar, which has risen to near parity with the U.S. dollar.
"A strong Canadian dollar is a challenge for us," he said. "The speed with which the Canadian dollar has strengthened has been breathtaking."
GM has extensive production operation in Canada and imports both parts and vehicles to the United States from there.
The Canadian dollar closed at 98.07 U.S. cents Friday. It traded one-for-one three months ago with the U.S. dollar for the first time in three decades.
(Reporting by Poornima Gupta and Nick Carey, editing by Mark Porter/Peter Bohan)
