GM’s Akerson Says Europe Fix No.1 Priority; Supply Chain Humming

DETROIT – General Motors Chairman and CEO Dan Akerson says the economic crisis in Europe, where the auto maker continues to restructure its business, remains the No.1 concern going forward.

“When I look at Europe, progress has been made,” Akerson says, citing recent labor deals reached with U.K. and Polish unions.

Akerson says he hopes to reach a similar accord with organized labor in Germany, where the auto maker arguably faces its toughest negotiations and the likely closing of an assembly plant.

Akerson demurs when asked if he thinks former CEO Fritz Henderson was correct three years ago in pushing GM to dump its money-losing Opel unit. As an independent board member at the time, Akerson vetoed the idea.

“We don’t have the luxury of looking back, only looking forward,” he tells journalists during a chat ahead of GM’s annual meeting today.

The former private-equity executive tapped to succeed Henderson two years ago and lead GM’s historic restructuring also says the North American supply chain, devastated by the recession, does not present the auto maker with any production restraints.

Ford Chairman and CEO Alan Mullaly said May 31 the auto maker will continue increasing production this year, but will be constrained in the short term by a supply chain that is not yet fully recovered from the recession.

“So far, so good,” Akerson tells WardsAuto, noting GM recently increased its outlook for U.S. sales by 500,000 units to between 14.0 million and 14.5 million. “Our supply base has been very responsive and (there are) no problems there.”

Looking ahead to talks with the Canadian Auto Workers union later this summer, Akerson says a “materially different” exchange rate existed when GM first built its plants in Canada, and the country now is the world’s most-expensive place to build vehicles.

“That being said, the plants in Canada are very high quality, very high productivity and the workers are very dedicated employees. And they know they have a cost differential” with the U.S. and Mexico, he says.

“I think reasonable people should come to common ground to the benefit of both,” Akerson adds. “We don’t have the luxury of political dialogue. We have to run a business here, and I think the union understands that.”

GM’s run-up to talks with the CAW hit a speed bump last week when the auto maker decided to go forward with a 7-year-old plan to shutter an assembly line at its Oshawa, ON, facility. GM had been delaying the closure due to the continued popularity of the products built on the line, but those vehicles will be built elsewhere next year.

Akerson suggests GM will follow the negotiating blueprint it set with the United Auto Workers union in the U.S. two years ago, when the auto maker won historic cuts in labor costs in return for investment pledges.

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