GM Boss Rues Fuel Rules; Delphi Deal Near
General Motors Corp. (GM) Chief Executive Rick Wagoner said Tuesday the company is looking for ways to continue cutting costs while boosting revenue.
Wagoner, speaking to reporters following the annual shareholders meeting, also said that a resolution of a labor deal with Delphi Corp. (DPHIQ), GM's former parts supplying unit, could happen "relatively soon."
The GM executive said the company will hit its $9 billion cost cut target this year, but will continue to seek additional cuts in the future as it looks to reduce the ratio of structural costs as a percentage of global revenue to 25% in 2010, from about 30% currently.
While GM will seek to be "creative" in squeezing more cost cuts, Wagoner emphasized the auto maker's push to boost revenue in most markets it competes in. A revenue bump and stabilization of costs in most markets would help the company meet its mid-term goals, he said.
One of the key issues GM needs to resolve involves talks with Delphi and the United Auto Workers union.
Wagoner said the list of issues GM is sorting through with Delphi is narrowing, but he declined to give a definitive timeframe on a settlement. He said he could envision a scenario in which the Delphi situation was resolved "relatively soon."
CAFE `Hasn't Worked'; Proton Deal A Long Shot
Meantime, Wagoner criticized a 30-year effort by the U.S. government to regulate fuel-economy by so-called CAFE legislation.
Wagoner said that the government has taken too narrow an approach on CAFE, which is currently being debated in Congress as legislators look to raise standards that force auto makers to increase fuel economy.
While he said "it's very likely there will be increases in CAFE", he insisted the effort "hasn't worked in the past." CAFE stands for corporate average fuel economy.
Wagoner said there needs to be more of a focus on developing ethanol-fueling infrastructure and more research on battery technology, in addition to other measures that would move past CAFE legislation.
On other issues, Wagoner said it's unclear where talks stand with Malaysian auto maker Proton Holdings Bhd. (5304.KU) on a strategic alliance, but he said a GM deal with Proton appears to be a long shot at this point.
He said he didn't know the status of Proton's talks with Volkswagen AG (VLKAY). Volkswagen is thought to have been a strong contender for Proton, but recent reports suggest Volkswagen has dropped out of negotiations
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