GM pins ’13 hopes on fresh models

— Armed with new products such as a redesigned Chevrolet Silverado pickup, General Motors Co. should see “modest” U.S. share growth this year after falling to an 88-year low in 2012, Chief Executive Officer Dan Akerson said Wednesday.

GM is introducing 13 new Chevrolet models this year in the U.S. while fighting to end losses in Europe and managing operations in China, the company’s biggest market, where the economy is slowing.

“It starts and ends with product, that’s what we’ve been focused on since bankruptcy,” Akerson said at the company’s Detroit headquarters. This year and next “will be good years, not only here domestically but on an international basis.”

Under Akerson, GM’s U.S. market share last year fell to 17.9 percent, the low-est since 1924, Alfred Sloan’s first full year running the automaker. The company’s share decline came as some competitors, including Toyota Motor Corp., rebounded from production constraints after natural disasters in 2011.

“If we don’t grow faster than the market, we’re not taking market share by definition, so I do think we’ll grow faster than the market,” Akerson said in advance of next week’s North American International Auto Show. “Certainly that’s our hope, and that’s our expectation.”

GM shares rose 60 cents, or 2 percent, to close Wednesday at $29.67 in New York after reaching an intraday high of $30.28.

While Akerson is optimistic, GM’s share may holdsteady this year compared with 2012, even with the new models, according to a Bloomberg survey of five analysts.

The company is refreshing 70 percent of its U.S. lineup over a year and a half, including a redesigned Impala full-sized sedan and Corvette sports car.

Along with the new product surge, Akerson is pushing GM to improve operating margins, improve customer service and revamp the automaker’s corporate structure to align its business around Chevrolet and Cadillac brands globally and away from regional operations.

Akerson said he sees GM’s international operations, which include China, growing 5 percent this year while its South America business will be little changed.

Industry sales have fallen to the lowest in almost two decades in Europe. The automaker has struggled to stop losses in the region with its Opel brand.

“We see the market weakening,” Akerson said. “Germany looks like it could be slipping into recession.”

GM has said it expects to report a loss of $1.5 billion to $1.8 billion in Europe for 2012 after posting losses in the region since 1999 totaling $17.3 billion as of Sept. 30. The automaker said in October that it expects “slightly better” results this year and intends to end losses by 2015.

“The single biggest risk to GM’s success is the continuing losses and management distraction at Opel,” Adam Jonas, an industry analyst with Morgan Stanley, said as the lead author in a note Jan. 7 to investors.

GM wants to improve European results through an alliance with Paris-based PSA Peugeot Citroen and shuttering its plant in Bochum,Germany, in 2016, which would be the first car factory closing in that country since World War II.

While GM and PSA didn’t reach agreement on developing four products together as originally intended, Akerson said he’s optimistic about the alliance’s progress and expects logistic, purchasing and development savings by mid-decade.

Even with some down markets, Akerson said, GM’s cash allows it to continue to invest $8 billion annually in product development.

By mid-decade, Akerson said, he wants all five of GM’s units to be profitable or break even and for margins on adjusted earnings before interest and taxes to be “competitive” with the industry’s best.

“We have to be profitable in everything that we do,” he said. GM posted net income of $9.19 billion in 2011.

Business, Pages 23 on 01/10/2013

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