WASHINGTON — A two-week strike at American Axle and Manufacturing isn't having a significant effect on the bottom line of General Motors, given the broader downturn in car sales, Chairman and Chief Executive Richard Wagoner said Tuesday.
During an hour-long breakfast discussion with economic reporters sponsored by the Christian Science Monitor, the GM chief spoke his mind on a number of topics. Here are some of his views shortened and presented in a question-and-answer format. Wagoner's answers are direct quotes.
Q: Is the strike at American Axle hurting GM business?
A: We are losing some production for sure, but at this point the impact on retail sales has been negligible because of the inventories and the rather weak market.
Q: Are problems in credit markets hurting GM customers who are trying to get a car loan?
A: I would say so far that the state we observe is that credit standards are tightening by providers of credit, but the ability to offer credit has remained. We hope that continues because that is critical and that will be part of how quickly the auto industry's sales come back.
Q: Some analysts predict sales bouncing back this quarter. Will it be by midyear?
A: I guess the answer is it could be anything. ... I think that's a reasonable bet, but it's not a certain bet.
Q: What are some determining factors?
A: I think the key factor to watch — will we work through this credit issue in the economy. If you check that box "OK," then how will these various stimulus initiatives (the federal tax rebates being sent to consumers) affect consumers? And history would suggest it will have an effect.
Q: GM Vice Chairman Bob Lutz recently called global warming a crock of (expletive). Do you agree?
A: The comments weren't coming out of our company. ... The data is pretty clear that the temperature on the earth is rising. There are all sorts of debates as to why, but we've clearly come down on the side that it makes sense for us to put our business in a position where we can participate proactively in reducing the amount of CO2 (carbon dioxide) emissions.
Q: The United Auto Workers suggests that the federal government could give tax incentives to encourage U.S. production of the components used in popular hybrid vehicles assembled here from parts made abroad. Are you supportive?
A: The fact is in things like batteries, the U.S. is way behind. Way behind. The technology at this moment as we speak is focused in Japan; a lot of the manufacturing is in China. And it does strike me ... that having let the free markets work, it has put the country at somewhat a competitive disadvantage in these emerging technologies, which at least so far the free market has not funded to the extent that we've seen in places where you've seen government engagement in funding, like Japan.
Q: What could the federal government do?
A: I do think there is a role here. We have been relatively outspoken on the importance for support of battery research. I think basic hydrogen fuel cell research would be in order.
Q: Is there a price point for oil and gasoline that moves consumers into new automotive technologies?
A: The fact is our job to bring in these new technologies ... is going to get harder if gas goes back down.
Q: So higher gas prices can be good in that they change consumer behavior?
A: I'm very sensitive about being a guy who advocates higher gas prices because then all our pickup drivers write me letters saying they're going to buy Fords, which is obviously a huge sacrifice for them to make (laughter).