NEW YORK (Reuters) - General Motors Co’s GM.UL turnaround plan assumes it can maintain slightly more than 19 percent of the U.S. market, board member Stephen Girsky said on Thursday.
“The public plan is 19 percent and change. That is what everything is being based on,” Girsky said during a panel discussion at a conference at Columbia Business School.
Girsky, who joined GM’s 13-member board as a representative of the United Auto Workers union when the automaker emerged from bankruptcy in July, was responding to a question on what GM’s market share would be in three years.
The comments marked the first time that a GM director had addressed the question of market share for the company after it took $50 billion of emergency U.S. government support.
GM had 19.5 percent of the U.S. auto market in the third quarter and a restructuring plan it announced in May was based on the automaker maintaining an 18.5 percent share in 2009.
The automaker’s share of the U.S. market has eroded steadily for decades. GM held almost 29 percent of the U.S. market in 2002.
Girsky, an independent consultant and former Morgan Stanley analyst who was tapped as an adviser by both the company and the UAW, said that there is too much capital tied up in the automobile industry.
Automakers borrow money from their dealers, their suppliers, their employees and their retirees, he said. Meanwhile, the costs of closing down capacity are high and the cost of entry for new competition is going down.
When asked about the success of Carlos Ghosn, who was credited with reviving Nissan Motor Co (7201.T) after its deal with Renault (RENA.PA), Girsky noted that one element of his success has been that he was able to empower the so-called “car guys.”
“I do think there are car guys at GM,” Girsky said. “It’s about empowering them.”
Looking 10 or 20 years into the future as electric cars are more prevalent, Girsky said he could see an industry where the carmakers assemble the car, but the consumer focuses on branded parts inside.
The buying decision could be based on who has the best battery, or who has the best designers, he said.
Reporting by Caroline Humer, writing by Kevin Krolicki; editing by Maureen Bavdek and Steve Orlofsky