GM: Parts are ready to fix recalled small cars
MILFORD, Mich. - General Motors (GM) CEO Mary Barra says the company has enough parts available to fix all the faulty ignition switches that are blamed for at least 23 deaths nationwide.
Barra told reporters at an investor conference Wednesday that GM's parts supplier finished making the parts a few days before a goal of early October. GM recalled 2.6 million cars in February and says it has repaired about 1.1 million. That's just under half the vehicles when scrapped cars are excluded.
Barra said GM is trying to get the rest of the owners to bring their cars in for repairs.
She also said GM sees nothing to indicate that it will spend more than the $400 million to $600 million it has estimated to compensate ignition switch crash victims.
GM is counting on an increased number of new models and growth in China and emerging markets to raise sales and profit margins in the coming decade, according to its investor presentations.
The company said that next year, it expects 27 percent of its global sales to come from new or freshened models. That figure will rise to 47 percent by 2019 as it accelerates new model rollouts. Barra wouldn't say how many new models would be introduced each year.
But the new vehicles, coupled with cost savings and other measures, should get GM to a 10 percent pretax profit margin in North America by 2016 and 10 percent for the whole company by early next decade. Profit margin is the percentage of each dollar in revenue a company actually keeps.
Much of the growth is expected from the Cadillac luxury brand in China, where GM expects to introduce nine new models in the next five years. China, the company predicted, will become the world's largest luxury car market later this decade.
To handle Chinese growth, GM plans to spend $14 billion through 2018 to open five new assembly plants to support sales of just under 5 million per year.
It also expects Europe to return to profitability in 2016, and says it continues to address challenges in international operations outside of China.
Barra said that based on GM's performance and margin increases, it plans to return cash to stockholders with growing dividends. "When we do that our shareholders will receive the return on investment that they deserve," she said, without giving specifics.
She said the ignition switch recall crisis has resulted in cultural changes and a stronger leadership team. And she's now pushing harder for changes.
"For me personally, I'm a little more impatient, and I think that's a good thing," she told reporters at the company's proving ground in Milford, Michigan, north of Detroit.