Analysis: With heavy lifting done, GM's focus turns to cars, fixing Europe

Wed Dec 11, 2013 3:21pm EST
 
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By Ben Klayman

DETROIT (Reuters) - With General Motors Co (GM.N: Quote) in recent days setting in motion big changes around the globe, the focus for new Chief Executive Mary Barra and her team will be making cars and trucks that prove popular enough to help end losses in Europe, analysts said.

Over the past week, GM has announced it would pull the Chevrolet brand out of Europe by the end of 2015 to concentrate on Opel and stop making cars in Australia by 2017, to end losses in those regions. It also celebrated the long-awaited exit of the U.S. Treasury as a shareholder.

The moves, welcomed by Wall Street, clear the decks for Barra and her reshuffled management team that takes over next month.

GM on Tuesday named 51-year-old Barra as its next CEO, making her the first woman to lead a global automaker.

Barra will also be the first engineer to lead GM since Robert Stempel in the early 1990s. Analysts who follow the No. 1 U.S. automaker said that was a good sign as developing and building hot-selling vehicles is crucial to ending financial losses in Europe while also defending profit in the key U.S. and China markets.

"It would appear that her ascension shows the emphasis will be on product as opposed to strategies like squeezing suppliers and that's the right path," Gabelli & Co analyst Brian Sponheimer said.

"Quality and consistency of product will always be GM's No. 1 challenge," he added. "Mary Barra needs to continue to change the perception of GM in the eyes of potential customers. That starts with the quality of the car."

Outgoing CEO Dan Akerson is certainly not leaving the product cupboard bare, as vehicles like the Chevy Impala and Cadillac CTS sedans and redesigned Chevy Silverado and GMC Sierra pickup trucks are garnering awards and pulling in profits.   Continued...

 
Workers are pictured next to an Opel Adam car during the start of the car production in Eisenach January 10, 2013. REUTERS/Lisi Niesner