Trying Times

Taking home both the North American car and truck of the year awards (Saturn Aura and Chevrolet Silverado) from the Detroit auto show would lift any executive's spirits.

For General Motors Corp. Chairman and CEO Rick Wagoner, the awards were particularly sweet, as the auto maker faces drastic restructuring.

Winning the awards sends a message that while there were “bombs across the air last year, every way, shape and form they could have come, the vast majority of the people at GM were doing exactly what they should,” Wagoner tells reporters at the North American International Auto Show.

Wagoner says GM's delay of filing its first-quarter financials due to accounting irregularities marked last year's lowest point. “It came up completely out of the clear blue. Those were trying times, to say the least.”

GM in 2005 lost $10.6 billion but is set for profitability this year thanks to massive cost cutting over the last 12 months, Wagoner says.

Nevertheless, the CEO sees a very “long runway” for GM's turnaround and is reluctant to place a date on its completion.

Some people ask when the business will be profitable again, Wagoner says.

“Our objectives have to be much, much bigger than that. It's not an issue (of), can you make a nickel. That doesn't do anything for anybody. We need to get good profit, and very importantly we need to generate good cash flow.”

Growing revenue and the perennial struggle with escalating employee health-care costs, which still hover at about $1,200 to $1,500 per unit, will continue to dominate GM's agenda in 2007, he says.