"We've made a lot of progress in 90 days ... We need to prove ourselves every day and we will."
General Motors CEO Fritz Henderson said this morning that the new management team and the Board of directors are successfully running the business and learning at the same time on how to transform the management culture to one of accountability and risk taking.
How well they are actually doing this will not be known until GM reveals its first financial results sometime in mid November.
The company is not making money currently in my estimation.
“We are taking aggressive actions and moving quickly to transform our culture into one that is truly customer focused,” Henderson said.
Based on sales numbers that are available, GM’s performance in the Canadian and U.S. marketplaces remains below the plan outlined in bankruptcy proceedings. This lack of positive business outcomes needs to be reversed before the company can proceed with a planned initial purchase offering (IPO) of stock sometime during the second half of 2010.
Profitability and positive cash flow, as well as share performance will be the key criteria for a successful stock offering. A successful IPO is needed if GM is to begin to pay back U.S. taxpayers, and finance UAW health care benefits.
GM is continuing to implement “fresh-start” reporting, which encompasses the determination of the fair value of its assets and liabilities, by March 31, 2010.
Market share remains problematic in North America.
GM’s estimated global market share in the third quarter was 11.9%, up 0.3% points from 11.6% share in the first half of the year, compared to 12.4% in 2008. The company’s U.S. market share was 19.5% in the third quarter, consistent with the first half of the year.
However, U.S. market share in 2008 was 22.1%, and the three-point drop is a very costly one, and was one of the factors that led to GM’s insolvency earlier this year.
Recently, GM’s September share was 20.6%, one of the highest months in 2009, showing that the company’s new products are capturing consumer interest, at least initially. The four core brands accounted for more than 90% of GM’s September U.S. sales.
Henderson reiterated that GM needs an 18.5% share in the U.S. in a 10.5 million unit annual market just to break even under its new structure.