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Tuesday, January 25, 2011

General Motors riding on Toyota heels to gain No. 1 world's automaker title back

Logo of General Motors Corporation. Source: 20...        Image via Wikipedia
Less than two years from various groups penned the destruction of General Motors (GM) was just a stair-step away, the automakers' resurgent activities has given it a decent shot at being No. 1 again.
On January 24th, reported Monday that worldwide sales last year came within 30,000 of beating Japanese rival Toyota, which took a big hit because of safety recalls in 2010.
Hiring quality dedicated employees, producing more products and basking in a better reputation for quality, the automaker his betting on regaining its title as the world's largest automaker --an honor it held for 76 years before losing it in 2008.
Regaining the global lead means a lot workers on the assembly line in Flint, Michigan, the birthplace of General Motors and its' legendary Buick product. The town devastated by years of auto industry job losses and the local economy as suffer great losses. Two years ago, city residents did not know if any GM factory in the city of Flint or even the company would survive.
Dana Rouse, a UAW official at Flint Truck Assembly, called possibly retaking the largest auto manufacturer back from Toyota, the Heisman Trophy of the auto business.
"We're going to take Toyota on, and the people in Flint are going to be a part of that," he said. "This is the birthplace of General Motors. We kind of take it a little more seriously than maybe some other towns."
On Monday, GM recalled over 650 laid-off workers for a third shift at the Flint assembly plant because of strong demand for the heavy-duty pickup trucks. Other production increases could be coming, but GM at this time will not reopening closed pickup factories, GM's North American President Mark Reuss suggested.
In contrast, the company executives say they are focused on keeping customers happy, not on the title. Remembering the company's all to recent history, when it sold cars at a loss just to hold on to market share.
"Satisfying and retaining our customers and delivering world-class products is pretty much the fundamental business that we're in," Reuss said. "The rest of it may come, may not."
Now GM is outselling Toyota in fast-growing China, and its U.S. business is bouncing back. To overtake Toyota, it needs a sales increase of half a percentage point, about the number of Chevy Silverado pickup trucks it sells per month in the U.S.
Toyota is still wounded from recalls of more than 10 million vehicles, mainly to fix gas pedals and floor mats that could make cars speed out of control. It was the only major automaker with lower U.S. sales in December, and it's uncertain when sales will recover.
Toyota said it was not concerned with beating GM.
"Our objective is to become No. 1 with the customers," Toyota's spokesman Paul Nolasco said.
Toyota sold 8.42 million vehicles worldwide in 2010, barely ahead of GM's 8.39 million. GM made an impressive turnaround from 2009, when it was forced to take nearly $50 billion in government help and go through bankruptcy.
The manufacturer global sales grew by 12 percent in 2010 and it turned a $4.2 billion profit in the first nine months of the year. Financial results for the final three months of 2010 are not in but, other profits are expected.
Along the way, GM pulled off an initial public stock offering last years and added 9,000 U.S. workers, including some in Michigan. GM's sales in China were so strong that they outpaced the U.S. for the first time in the company's 102-year history.
The federal government still owns about a third of the company and is gradually selling its GM stock on the open market.
"At the end of the day you can accomplish that goal of beating Toyota without having to focus on market share," said David Whiston, an auto analyst with investment firm Morningstar. "If you focus on great product, the market share takes care of itself.
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