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Tuesday, 23 June 2020 18:38

GM Aiming to Be Back to Full Production by Month’s End, Says CEO Barra

Written by Paul A. Eisenstein, The Detroit Bureau
GM CEO Mary Barra told the Detroit Automotive Press Association that 2020 has been a “tragic year” so far. GM CEO Mary Barra told the Detroit Automotive Press Association that 2020 has been a “tragic year” so far.

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It has been a “tragic year," between the coronavirus pandemic, the collapse of the U.S. economy and the “brutal” murders of black Americans at the hands of police, said General Motors CEO Mary Barra.

During an online meeting with members of the Detroit Automotive Press Association, Barra addressed a variety of challenges facing GM and the U.S. more broadly, ranging from efforts to enhance diversity to the push to get auto manufacturing back up to speed after a two-month, pandemic-related shutdown.

 

She also clarified comments made last week that seemed to suggest GM might be pulling back on its aggressive push into electrification.

 

“We’re at a critical point for our company, the industry and for our country and frankly for our globe. I think 2020 will go down in history as a tragic year because of the human and economy devastation of the global COVID-19 pandemic,” Barra said during the webinar, adding her concerns about racial injustice brought to the fore by the murder of George Floyd in Minneapolis last month.

 

In terms of manufacturing, GM finally has its North American operations back in gear and has so far been able to manage using aggressive containment methods to prevent the spread of COVID-19, the disease caused by the coronavirus, within those plants. That said, there have been some workers diagnosed with the disease but that has caused relatively minimal disruption.

 

“We feel, with a few exceptions, we will be running the plants at the rate before COVID by the end of the month,” Barra said.

 

That will be critical considering that, while U.S. sales fell sharply during March and April and will continue to lag pre-pandemic forecasts for some time, demand remained stronger than the disastrous collapse many anticipated.

 

As a result, inventories have been drawn down. According to LMC Automotive, there are now just 2.6 million vehicles in dealer stocks, about 1.3 million lower than a year ago. That’s particularly true of the big pickups largely unaffected by pandemic lockdowns. As the most profitable products in the GM portfolio, it is critical to replenish inventories quickly.

 

The pandemic has led automakers to take on massive amounts of debt in very short order, according to a separate study by AlixPartners, the consultancy warning that the industry is entering a “profit desert.”

 

For her part, Barra acknowledged the industry is facing broad challenges though, she insisted, for GM, “I think we have a very strong future and I don’t see that desert.”

 

Barra countered concerns in several areas, insisting that GM has great opportunities in China, despite the fact it has been bleeding sales and market share over the last few years.

 

She also was upbeat about the automaker’s aggressive electrification program which will see it bring to market more than 20 pure battery-electric models by 2023, starting with the GMC Hummer pickup and SUV offerings due next year.


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