GENERAL Motors Corp Chief Executive Officer Rick Wagoner says he's not yet seeing signs of a recovery in the United States economy or in vehicle sales following the recent decline in oil prices.
"It still feels to me like we're in it," the CEO of the world's largest auto maker said, referring to the sluggish economy that helped push GM to US$15.5 billion in losses in the second quarter. He was speaking at the Athens Coney Island restaurant in Royal Oak, Michigan, after leading a morning parade of classic GM cars from the past 100 years.
Wagoner is trying to increase cash by at least US$15 billion before the end of next year to pay the bills while he works to recover sales lost to Toyota Motor Corp and Honda Motor Co.
GM's US market share is the lowest since 1925 and the Detroit auto maker has lost US$69.8 billion since 2004, its last profitable year.
The auto maker may seek to modify the structure of financing necessary to create a fund in 2010 to rid itself of future union retiree healthcare costs, Wagoner told Bloomberg News.
GM already reached an agreement to delay some cash payments and other cash payments might be modified, without delaying the implementation of the fund, he said.
GM Chief Financial Officer Ray Young also said that GM may need to restructure the financing of the fund that will save GM US$3 billion a year by 2010.
"I wouldn't rule it out if it made sense for everyone to look at that," Wagoner said.
Union members at GM agreed last October to let the car maker pay US$31.9 billion into a Voluntary Employee Beneficiary Association to cover a US$47-billion healthcare liability.
A US judge in Detroit on July 31 granted final approval of the plan, barring any appeals.
Young said this week that GM is trying to speed up US$10 billion in cuts this year after economic conditions worsened.
Gasoline prices that topped US$4 a gallon in the US this year have soured US buyers on GM trucks, which make up a majority of domestic sales.
Wagoner dismissed talk that GM is buckling under the losses of the past several years.
The majority of the costs are composed of US$11 billion to bail out its bankrupt former unit Delphi Corp, more than US$30 billion for a tax-accounting charge and US$15 billion-US$20 billion to close plants and buy out union workers, he said.
"We're structured to be very competitive in the future," Wagoner said, surrounded by classic GM cars from the 1960s and other halcyon days of the company's past. "Anybody who is writing off General Motors isn't looking at the facts and is probably hoping, because they'd better watch out."
GM has had three of its highest volume sales years during its 100-year history in the past three years, Wagoner said. The auto maker was growing faster than competitors in markets such as Russia and holds a dominant position in most of the fastest- growing regions, he said.