General Motors should emerge with permanently lower costs, says CEO

General Motors

General Motors should emerge from the coronavirus pandemic with a permanently decreased cost base after it scrambled to decrease its cash burn to withstand a two-month shutdown in North American production as part of attempts to stop the spread of COVID-19, its top executive stated on Tuesday.

“We were quickly able to take out major costs and we are being very conservative about what costs we turn back on,” CEO Mary Barra said during an investor event with Credit Suisse. “I believe we will come out of this with a lower cost structure that is permanent.”

Barra said those permanent cost decreases could include few different vehicle platforms offered by the automaker and decreasing the complexity of those platforms to be more focused on producing the versions customers want most.

She stated that the coronavirus pandemic had given the automaker the opportunity to go through all of its line item expenses and remove redundant processes.

“We’ve found things that we don’t need to do and things we can do more efficiently,” Barra stated.

The U.S. automotive industry has been seeing positive results after the coronavirus shutdown, and major automakers have been keeping a close watch on suppliers in Mexico to see the pandemic disrupts the flow of parts.

Barra stated on Tuesday if there are issues in the automaker’s supply chain, the automaker will focus on diverting parts for its popular and profitable pickup trucks.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.