Green Shoots: Barra Foresees GM Back At ‘Full’ Production This Month

Automaker’s approach includes full-tilt output of pickup trucks and no additional cost reductions in key corporate response for emerging from pandemic.

Mary Barra, CEO of GMGeneral Motors Chairman and CEO Mary Barra said that the automaker expects to be back to the 2020 equivalent of full production in the United States by around the end of this month, signaling that the company is increasingly bullish on the strength and pace of auto sales and, by extension, the strength of the national recovery from the Covid-19 lockdowns.

“I’m cautiously optimistic” about demand, Barra said Monday on a conference call with the Automotive Press Association members on the eve of GM’s annual meeting today. “Things did return more strongly than we initially anticipated.”

Barra leads what is still the most important American company in what remains the most economically-determinative industry, so her views and actions are crucial to the direction of the fledgling U.S. recovery from the pandemic. Her relevant tactics have included resuming and maintaining output at all of the company’s factories through scattered cases of workers with Covid-19 at the plants, foregoing any new wave of cost cuts for now after the company’s initial pare-back in March that included 20-percent salary reductions for white-collar workers, and cranking up output of pickup trucks and full-size SUVs to three shifts at some GM factories.

GM put together an aggressive playbook of health and safety protocols so that it could bring its U.S. plants back online last month following the pandemic shutdowns, and Barra noted that “we have had no known cases where the virus was spread within a [GM] facility” even though some employees have brought Covid-19 to the job with them – and then been sent home to quarantine.

“It’s been pretty positive,” she said. “People are following the safety protocol and have confidence in it.”

She said that GM “took the right cost-cutting actions” as the pandemic “started to unfold across the globe” with a “zero-based approach.” Thus, Barra said, “We don’t see any further need for [cost] reductions.”

GM is tailoring its U.S. sales expectations for 2020 to internal and external forecasts for only 12 million to 14 million units, which would be a far cry from the roughly 17 million units a year that the industry sold for the last five years. But within those prospects, Barra is describing a GM factory network that will be going full-tilt soon.

“By definition [the market] will be smaller,” she said. “In many [factories] we will be at the same volume capacity because we are rebuilding inventories; it will depend, by segment. In some cases, we are ramping up more slowly because we want to make sure we don’t outpace our supply base. But for the most part, we will be running plants with few exceptions at rates similar to pre-Covid, by the end of the month.”

Barra hinted that GM and its dealers are seeing an interesting phenomenon in consumer psychology that can only be called a post-Covid-19 wrinkle: a desire to buy their own vehicles as a matter of health and safety and a refuge from the virus-transmission threats of mass transportation.

“It’s too soon to tell” if this is a significant factor or will be long-lasting, she said, “but people are wanting to have their own transportation. We need to watch and take note of that. People’s work habits also will evolve: There will be more work from home, but there’s also a desire to have people in the office to make sure [companies are] driving innovation and cooperation. It’s too early to tell what the exact trend will be. We haven’t seen anything that we feel is a permanent shift yet.”


MORE LIKE THIS

  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events

    Roundtable

    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)

     

    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.