General Motors Co.'s restructuring plan is based on the assumption that it is capable of maintaining slightly more than 19% of the U.S. market. The remarks were taken from Board member Stephen Girsky who spoke during a panel discussion at a conference at Columbia Business School.
Girsky, who joined GM's 13-member board as a representative of the UAW when the automaker emerged from bankruptcy in July, said, "The public plan is 19% and change."
This was Girsky's response when asked what GM's market share would be in three years. GM's share of U.S. sales had peaked at 51.1% in 1962.
The restructuring plan announced in May was based on maintaining an 18.5% share this year. GM held almost 29% in 2002. And in the third quarter, GM had 19.5% of the U.S. auto market.
Girsky, who was an independent consultant and former Morgan Stanley analyst, said there is too much capital tied up in the automobile industry.
He explained that automakers borrow money from their dealers, their suppliers, their employees and their retirees. Meanwhile, the costs of closing down capacity are high and the cost of entry for new competition is going down.