In the future, General Motors expects to hold capital spending steady from year to year and to avoid dramatic peaks and equally dramatic valleys.
“We want to eliminate the big swings in capital spending,” GM Vice Chairman and Chief Financial Officer Chris Liddell said.
Over the years, capital spending has been reduced dramatically and many projects cancelled during recessions, he said. “But that’s enormously expensive,” he added. “A lot of money was wasted,” he said.
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It’s better in the long run for GM to hold capital spending steady during both good times and bad, he said. “You have to have control of spending,” stressed Liddell, who joined GM after serving as Microsoft’s CFO.
Stronger finances, he asserted, will enable GM to hold capital spending level during a downturn. And, as General Motors enters 2011, its finances are steadily improving –though the company still faces challenges, GM’s top financial officer said Tuesday.