GM Chief Outlines the Company's Strategy

Will: You have and are supporting two and a half pensioners for every employee. You're the largest health care provider in the world. General Motors, I read, writes a prescription every 1.5 seconds for drugs for their retirees and others -- 1.5 seconds, 24 hours a day, seven days a week, 365 days a year -- cost approaching $6 billion a year.

Can you function indefinitely with this kind of healthcare burden?

Wagoner: No, I don't think we can. And that's really why we made the move we did last year. I think, by any reasonable measure, [it was a] historic agreement with the UAW -- in which we agreed that about $15 billion of a roughly $60 billion healthcare burden with our hourly employees would be, in essence, funded directly or indirectly by active and retired employees.

So I think this issue of needing to share some of that cost is accepted, and that contract change was ratified.

Will: Let's look ahead. Part of General Motors' plan to revive its North American operations is more improved SUVs. Some people say this looks a lot like Henry Ford sticking with the Model T for too long. Are you worried that this is a product that's past its apogee in the market?

Wagoner: I think that's an extremely simplistic analysis. Our strategy to deal with the revenue side of our turnaround is very much driven by product. And if you look at our new product introductions over the span of about three years, in fact, a lot of our new introductions -- the majority are crossover vehicles and cars. So I think it's highly simplistic to say we're betting only on SUVs.

Will: Bob Lutz, who's in your product development, head of your product development, said we, meaning the automobile business -- we are in the arts and entertainment business. Is that still true?

Wagoner: I think it's more true than ever. The company that comes up with the, what we call, gotta-have products-- To Bob's point, the real breakthrough movie, in his -- is the one that's really going to get the competitive advantage.

So this focus on design, I think, is actually picking up in our industry now, certainly at G.M.

Will: Mr. Wagoner, thank you very much.

Wagoner: Thanks very much. Great to be with you.

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