GM CEO Says Early Signs on Value Pricing Positive

FRANKFURT – Early indications show buyers are responding to General Motors Corp.’s “Total Value Promise” pricing scheme that emphasizes lower sticker prices and fewer incentives, CEO Rick Wagoner says here.

“People are interested in more value pricing,” he says, speaking with reporters on the sidelines of the auto show. “We know it’s going to work.”

But he cautions that doesn’t mean incentives will disappear entirely.

Meanwhile, Wagoner declines to specify when GM will reach profitability in North America. He also declines comment on negotiations with the United Auto Workers union aimed at relieving some of the auto maker’s health-care expenses and won’t discuss the nature of talks with the Canadian Auto Workers union concerning a new labor contract.

As for negotiations concerning the welfare of Delphi Corp., he says it is up to the supplier whether to declare bankruptcy.

“I can’t tell you whether there will be a favorable outcome on (a Delphi) bankruptcy,” Wagoner says. “We need to give the union the time it takes and would not speculate on what the timeframe for the negotiation will be.” (See related story: Chapter 11 or Not, Delphi to Be Changed Company, Miller Says)

But Wagoner denies that it is in GM’s interest for Delphi to declare bankruptcy, freeing it up from parts supply contracts and allowing it to source components from other lower-cost companies.

“We want to get (supply) sourcing that works for the supply base and give them greater volume opportunities,” he says. “We’re encouraging our suppliers to be cost competitive.”

Wagoner says that doesn’t mean suppliers have to move more jobs out of the U.S.