GM’s Barra Says Automaker Upping U.S. Product Cadence

KANSAS CITY, KS – General Motors CEO Mary Barra says a newly announced, $5.4 billion U.S. facilities investment plan will support a slightly elevated product cadence as the automaker looks to solidify its restructuring.

“We’ve upped it slightly into this year,” Barra says of GM’s latest product push, which will see 19 new and eight refreshed models launched in 2015 and 2016.

The increased activity comes on the heels of GM’s decision last year to increase overall capital spending 20%, an outlay hike in new-product spending that puts it on par with other leading global OEMs at 5%-5.5% of annual revenue. For GM, that translates into $9 billion of capital spending this year.

“It’s a movement up from the restructuring phase,” Barra tells WardsAuto after a celebration here marking the 500 millionth GM vehicle produced and a $174 million investment in its Fairfax, KS, assembly plant for the ’16 Chevrolet Malibu.

“We feel strongly we are investing in the right products,” she adds. “If you look at what is happening in the next few years, we have significant investments in new technologies, multi-materials (strategies), new powertrains. It is across the board. But if you look at how the industry is changing, we think it is at the right level.”

The product push underpins GM’s hopes to claw back some U.S. share in the coming months. The automaker closed April with 18.2% of the market, according to WardsAuto data. In 2007, before the recession and new-vehicle sales collapse forced GM’s 2009 bankruptcy, the automaker controlled 23.6%.

However, Barra says the market-share grab will not come at the expense of company profits.

“It’s about profitable market share,” she says. “You’ll see us continue to be disciplined in incentive spending.”

Barra expects a big contribution from the ’16 Malibu, due later this year and redesigned for greater roominess, better driving dynamics and more appealing styling. A hybrid model will get up to 48 mpg (4.9 L/100 km). But midsize rivals such as the Toyota Camry and Honda Accord account for twice the sales every month as the current Malibu.

“With the (new) Malibu, we’ve really focused on the midsized customer and what they value most, and I think they are going to see a great value proposition in the car,” she says.

Barra says the success of the redesigned Cadillac Escalade shows buyers will flock to a well-executed vehicle. GM sold 3,237 Escalades last month, a 144% increase over last year with the previous-generation model. The large luxury SUV helped give Cadillac its first monthly year-over-year sales increase since June.

“It’s great how well the Cadillac Escalade is doing. It’s a great vehicle,” she says. “But we’re on a journey with Cadillac. We are working hard for the right product portfolio, we’ll build it over time. We have a strong brand foundation now. It’s not a month-by-month journey, but we’re 100% committed.”

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