GM chief: Outlook to improve later in '08

The top executive at General Motors Corp said that the woes of the US economy were a concern to the automaker, but predicted that the second half of 2008 would be better than the first half.

"There is a range of uncertainty. I think it's fair to say there has been a reasonable amount of turmoil in financial markets driven off this housing thing," said Rick Wagoner, speaking to reporters at the North American International Auto Show.

Higher gasoline prices combined with a weak housing market have raised concerns that the US economy could tip into recession in 2008 and cause consumers to delay big-ticket purchases such as new vehicles.

Wagoner said a worsening economy could slow down GM's North American turnaround, which has included slashing more than 34,000 jobs and closing 12 plants. The automaker, which lost more than $10 billion in 2005 and 2006, has also cut structural costs by $9 billion.

"The probability of it getting worse looks quite low," Wagoner said. "But sure it would slow down the turnaround. We need to work on cost and revenue. And obviously it would slow down revenue, which would slow down the financial results."

Full-year 2007 sales dropped almost 3 percent to 16.14 million vehicles, the lowest since 1998. Wagoner said he expects the market in 2008 to be about as tough as the year just ended, estimating total US industry sales to come in at 16.3 million to 16.5 million units.

On a light vehicle basis, that would be 16 million to 16.2 million vehicles.

Agencies

(China Daily 01/15/2008 page16)