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GM will be a leaner company post-coronavirus, Barra says

Jamie L. LaReau, Detroit Free Press on

Published in Automotive News

General Motors CEO Mary Barra said the next several weeks are critical for the automaker to rebuild pickup inventory, keep workers healthy and apply a "laser-like focus on our cost structure."

Barra made those comments during a Virtual Fireside Chat with Credit Suisse Tuesday. Joining her on the chat was GM's CFO Dhivya Suryadevara.

GM restarted most of its U.S. plants on May 18 and this week added second and third shifts to most of them. Barra said suppliers are coming up to speed and GM will continue to add shifts across all its plants.

GM's underlying business fundamentals remain strong, too, Barra said, despite the coronavirus pandemic forcing the Detroit Three automakers to idle all of their North American assembly plants in late March. GM ended the first quarter with $33.4 billion in automotive liquidity.

But when it comes to having cars on dealers' lots, GM struggles to catch up.

"Inventory is definitely on the tighter side especially as it relates to trucks," CFO Suryadevara said. "The way to mitigate it... is with the ramp-up of the facilities. The emphasis will be on the pickups and SUV plants. Then, getting them to the dealers as quickly as possible."


GM is working to prioritize building the faster-selling trim levels first to help refill the inventory pipeline. Pickups are a "priority order," Barra said.

Last month, GM's ramp-up of pickups was derailed because it could not get the flow of parts it needed from suppliers in Mexico to support bringing back second-shift workers at GM's Flint Assembly and Fort Wayne Assembly plants. GM builds its heavy-duty pickups at Flint and its light-duty at Fort Wayne, Indiana.

The vehicles already face lower-than-usual supply because of the 40-day UAW strike against GM last fall. The pickups, which carry fat profit margins, are crucial to GM's bottom line.

"If there is a supply issue, we'll prioritize trucks," Barra said. GM is ready to make productions changes if necessary, she said.


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