GM Expects Big Jump in Foreign Sales
General Motors Corp.’s international sales will increase 50% in the next 10 years, Chairman John Smith told shareholders Friday.
Describing the American market as “mature,” Smith said the company will concentrate on expansion outside of the United States, Canada and Mexico to 4.5 million vehicles by 2006. That includes expected increases of 30% in Europe, 25% in Latin America and 40% in the Asia-Pacific region.
“We are focusing on the world, since that is where GM’s growth will be in the years ahead,” said Smith, GM’s chairman and chief executive.
GM sold just over 2 million vehicles worldwide in the first quarter of 1996, 16% of the global market. Of those 2 million vehicles, 1.15 million were sold in the United States, the company said.
The annual shareholders meeting followed a punishing first quarter for the world’s largest auto maker.
GM lost $1 billion from January through March--$900 million of that because of a strike over the company’s hiring of outside contractors. Company managers used the meeting to offer conciliatory words to workers and promise to do more to boost shareholder value.
Shareholders also criticized the company for spending $355 million in outside legal fees and $144 million in recalls in 1995. Much of the blame goes to the company’s “hawkish” labor policies, said shareholder John Chevedden of Redondo Beach.
“We’re just at the point of losing $900 million due to a small labor contract, and we’re facing much bigger contracts,” Chevedden said.
Smith said the company must compete with companies that build cars in 20 hours, compared with 30 for GM. GM also pays $500 more per car for employee health care and retirement than Japanese companies working in the United States, he said.
“Our objective is not to have a company with fewer and fewer employees,” he said. “Our objective is to be competitive and to provide jobs that naturally result from a competitive enterprise.”
The company hopes to reach agreements with the United Auto Workers and other unions this fall. Asked how the company is doing in managing its labor relations, Vice Chairman Harry Pearce said: “Obviously, we could be doing better.”
Smith vowed to try to create more jobs by building global sales.
To do that, he said, the company plans to make an inexpensive family car in Poland in two years, begin making Chevrolet Blazers in Russia, finish a plant in Argentina for Chevy Corsicas by 1997 and eventually build a new Southeast Asian operation and a plant to make Buick sedans in China.
The company ranks No. 1 among major manufacturers in customer satisfaction, and Saturn gets the highest satisfaction ratings of all major sellers.
GM shares lost 87.5 cents at $55.25 on the New York Stock Exchange.
