GM, Ford tell stakeholders that future is bright
Both Ford and General Motors today predicted they will expand their global presence, despite rising energy and commodity prices.
GM held its first public stockholders meeting in Detroit – and Ford held its annual Investors Meeting in New York.
GM CEO Dan Akerson told stockholders to consider the company a long-term investment, not short-term. GM stock has lost a fair bit of value since the IPO in November.
Akerson says the company’s strength in mature markets like North America, and its growing business in developing markets, especially China, make GM a force to be reckoned with.
He says the bankruptcy allowed GM to shed a crippling amount of debt, along with unsustainable union contracts and a history of poor management. Just two years out of bankrutpcy, GM has more than $32-billion in cash, and $5-billion in debt.
"We’re in the midst of a transformation. It’s in our making. You can see it when you walk the floors of our offices or any plant, and you can feel it."
General Motors can't do anything about one perceived liability - the continuing role of the government, which owns about 26-percent of GM. The U.S. Treasury is not expected to sell its remaining GM stock until August at the earliest.
But Akerson says GM intends to whittle away at another liability - the company's underfunded pension obligations.
At Ford's investors' meeting in New York, CEO Alan Mulally said he expects the company to increase its global business by fifty percent in the next five years, especially in the developing markets of Brazil, India, Russia, and China.
Ford has a much smaller presence in China than GM, but Mulally expects the rising tide will lift all boats in that country. I-H-S Automotive predicts China auto sales will account for 28% of global volume by the year 2020.
Mulally says Ford is well positioned to capture what's expected to be a rapid growth in the small car segment worldwide. He says small cars could account for 64% of global sales by the year 2020.
Mulally says Ford will work to make its luxury brand, Lincoln, more competitive globally. And the company will continue to reduce its debt load, which is much higher than rival GM's because Ford did not declare bankruptcy in 2009.