General Motors touting its global reach to potential investors

Article by Christian A., on August 27, 2010

To attract investors, General Motors Co. is directing attention to its global reach. In a filing it submitted last week for an initial public offering of stock, GM said that currently, about 17% of its vehicles are built off common global platforms but that by 2014, they will comprise more than 50%.

GM is expected to have huge savings on engineering and production with the use of common designs and standard vehicle parts.

The IPO filing indicated that GM's budget this year for engineering and capital expenditures amounts to $13 billion.

The company also pointed out that it is building more factories in emerging nations. Currently, about 43% of GM's vehicles are made in low-cost countries, including China and Mexico, where GM pays workers less than $15 an hour for both wages and benefits.

About 17% of GM vehicles are made in medium-cost countries, including South Korea and Brazil, where GM pays its workers between $15 and $30 an hour for wages and benefits combined.

Meanwhile, GM has a total of about 52,000 UAW workers in the US, with each earning about $55 an hour with wages and benefits combined.

With this set-up, GM is expected to hasten progression to common vehicle platforms. GM's IPO indicated that between 2010 and 2012, the carmaker will launch 19 vehicles in North America and in 2013 and 2014, it will release 27 vehicles.

Being able to move quickly to common vehicle platforms will help GM optimize its manufacturing flexibility to make vehicles anywhere in the world without needing to add a major capital investment. [via autonews - sub. required]

Topics: gm, investment

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