A Model for Sustaining Profitability

Sustaining Performance

The GM organization is committed to designing, building and selling the world's best vehicles.


Since the launch of the new General Motors Company in 2009, our business model continues to work for us — even in the face of global economic challenges and a constantly changing marketplace. Though work remains, we are making steady progress to position the business for sustained profitable growth around the world. Among our accomplishments through mid-2012:

  • We have recorded 10 consecutive quarters of profitability.
  • Our net income was $7.6 billion in 2011.
  • Our balance sheet is strong, with 2011 year-end debt of $5.3 billion.
  • We are managing our U.S. pension liabilities and ended 2011 with qualified U.S. pension funds 88 percent funded.
  • Major credit rating agencies have upgraded us to near investment-grade status.
Close up of car

Chevrolet is focused on a global brand strategy centered on great value and style.


This financial progress reflects the ultimate litmus test in our business — consumers are buying GM cars. In 2011, we increased our global market share by 0.4 percentage points from 2010 to 11.9 percent in 2011. We also are the number-one automotive company in the U.S. and China, the world's largest markets. Our challenge is to keep building this momentum by focusing on four principles that will drive margin improvement and sustain long-term performance.

1. Design, Build and Sell the World's Best Vehicles

Our success starts and ends with great products that satisfy our customers with compelling design and outstanding reliability, quality and durability. We are working toward this goal from a strong foundation. We had our best performance ever in the 2012 J.D. Power & Associates' new car quality survey, with three of four brands ranked above industry average. We lead in fuel economy in multiple product segments. Our vehicles have a strong safety reputation and competitive advantage through our ownership of OnStar. Our continued investment in advanced technologies and leadership in clean-energy patents, which are outlined in the Design section of this report, is another important part of this strategy and one that directly supports our intent to help displace petroleum, improve fuel economy and reduce emissions.

2. Strengthen Our Brand Value

Great products lead to great brands. Our brands must have a clear, powerful and distinctive position in the marketplace. Key to this is a focus on fewer brands, which enables us to increase product development and manufacturing flexibility, maintain a steady flow of new product launches and allocate higher marketing expenditures per brand. Our global brand strategy is centered on Chevrolet as a brand that offers value, reliability, performance and expressive design; and Cadillac, offering luxury vehicles that are provocative and powerful. We are carefully cultivating Holden, Buick, GMC, Baojun, Opel, Vauxhall and Wuling to satisfy customers in selected regions.

3. Grow Profitably Around the World

Our margin enhancement initiatives are focused on both top-line sales growth and bottom-line operational leverage.

We're working to leverage our leading position in key emerging markets, including in the fast-growing Brazil, Russia, India and China (BRIC) markets. In China alone, we, together with our joint venture partners, plan to introduce over 60 new models and/or major upgrades in the next five years. In BRIC countries, we are particularly focused on solutions that can satisfy fast-growing demand for personal vehicles, while addressing the inevitable demands on energy supply and transportation infrastructure that accompany growth. In Europe, our challenges are greater as we tackle industry over-capacity, high fixed costs and weak economies.

Profitable growth also requires aligning global capacity with global demand. We must achieve a global manufacturing footprint that helps us minimize costs, optimize flexibility and improve capacity utilization. Reducing complexity through more common components and vehicle architectures is key to this goal. We intend to reduce the number of vehicle architectures and the number of engine platforms by about 50 percent over the next decade. By 2015, we expect that over 50 percent of our vehicles will be built in a flexible network of plants that leverage vehicle commonalities. This will enable us to put higher-quality products in the marketplace at a faster pace with more efficient capital investment. This also allows us to more quickly reduce the cost of the advanced technologies we are introducing. In addition, simplified processes and continuous improvement in operating efficiencies will serve to further the resource conservation initiatives that are discussed in the Build section of our report.

Vehicle in plant

By 2015, we expect that over 50 percent of our vehicles will be built in a flexible network of plants that leverage vehicle commonalities.


4. Maintain a Fortress Balance Sheet

Given the cyclical nature of the global automotive marketplace, it is critical that we maintain a low-risk profile through an income statement with an appropriately low break-even point. Common global platforms and reduced business complexity are at the heart of a disciplined cost structure, as well as a straight-line investment strategy. This means sustaining technology and product development investments through business cycles in order to minimize "start and stop" efforts that result in wasted capital and wasted resources. Our balance sheet objectives will continue to emphasize minimal debt and prudent liquidity reserves. This also will help us to work further toward fully funding our U.S. pension plans and to pursuing an investment-grade credit rating.