General Motors Co is on track to hit its cost-cutting targets but faces risks as it tries to win back consumers in an uncertain U.S. economy, the automaker said on Wednesday.
In a sign of the tougher scrutiny management faces under a new board of directors picked by the U.S. Treasury after a government-financed bankruptcy, GM said U.S. sales chief Mark LaNeve would be leaving the company.
GM Chief Executive Fritz Henderson declined to discuss what he called rumors that Chief Financial Officer Ray Young would also depart.
GM's new 13-member board, led by Chairman Ed Whitacre, met this week in Detroit for the third time since the new company was launched out of bankruptcy, Henderson said.
At the board's September meeting, directors discussed the departure of Young and made it clear the U.S. sales team would have to deliver a quick turnaround to avoid a shake-up, people familiar with the discussions have said.
GM ended the third quarter with its global and U.S. market share above initial targets, despite a high-profile bankruptcy that hurt its credibility among American consumers.
GM said its global market share was 11.9 percent in the third quarter. Its U.S. market share -- including brands being scrapped, such as Pontiac and Saturn -- was 19.5 percent, down from 22.1 percent at the end of 2008.
Henderson also said GM expects to close deals to sell its Saab and Hummer brands by the end of 2009 and was preparing for an initial public offering that would make it a listed company again sometime next year.
Discussions with senior representatives of Sichuan Tenzhong Heavy Industrial Machinery Co, a Chinese company seeking regulatory approval to buy Hummer, continued this week in Detroit, Henderson said.
We're working hard to make sure we're doing our part, and the buyer is very interested in getting the deal closed, Henderson said.
COSTS, BALANCE SHEET IN LINE ... NOW THE HARD PART
GM said it would provide more financial details when reporting third-quarter financial results in mid-November.
The automaker said it had closed four U.S. plants, cut 12,800 hourly workers and dropped 5,400 salaried workers from its payroll since the end of last year.
GM has to cut another 9,200 jobs represented by the United Auto Workers union to bring its U.S. factory work force down to 40,000, a target set in its May restructuring plan.
The update on what GM has achieved in its first 90 days out of Chapter 11 bankruptcy represented a much greater disclosure than the details provided to date by GM's smaller rival Chrysler.
GM was pushed through a fast-track bankruptcy by the Obama administration with $50 billion in federal funding. The government provided $10 billion to fund the earlier court-supervised bankruptcy of Chrysler.
Chrysler, now under the management control of Italy's Fiat SpA , has reshuffled management twice since emerging from bankruptcy but has not yet taken questions from reporters or analysts on its strategy.
Chrysler has said it will disclose a new five-year plan on November 4.
Henderson said GM was close to the end of a four-year period in which senior management was focused on managing costs and leverage as U.S. auto sales slumped.
The most important thing we have to focus on now is how do we win in the marketplace, Henderson said on a conference call with reporters and analysts.
The departure of LaNeve, a GM veteran who had spearheaded the revival of the automaker's luxury Cadillac brand, was announced in a statement e-mailed to the company's 5,800 dealers on Wednesday.
Henderson said LaNeve was leaving to take a job outside the auto industry but declined to name his new employer. His departure takes effect October 15.
No successor to LaNeve was immediately named.
Henderson said GM was working with U.S. officials to determine what it could pay outside hires under regulations that will restrict pay for companies that received emergency federal funding.
Despite the progress made since GM emerged from bankruptcy in July, it still faces risks, the automaker said.
Those include uncertainty surrounding the strength of the U.S. economy and the level of unemployment.
GM, which launched a major advertising initiative last month featuring Whitacre, said it would have to continue to win back American car shoppers to succeed.
(Reporting by Kevin Krolicki and David Bailey; additional reporting by Soyoung Kim; editing by Lisa Von Ahn and John Wallace)