GM vows to Defend Title Against Toyota

Posted 05 January 2007 @ 09:17 am EET     Print     Reprint     E-Mail     Comments

DETROIT (AP) - If Toyota Motor Corp. has eyes on taking the title of world's largest automaker from General Motors Corp. next year, it won't happen without a fight. In an interview Thursday, GM Chief Executive Rick Wagoner said his company has room for growth worldwide and will forcefully defend its title.

"I like being No. 1, and I think our people take pride in it," he told a small group of reporters at GM's headquarters. "It's not something we're going to sit back and let somebody else pass us by."

Toyota last month announced a global production target of 9.42 million vehicles for 2008, increasing the odds that it will surpass GM. That would easily exceed the 9.2 million vehicles GM is estimated to have produced in 2006.

Wagoner wouldn't reveal the company's 2007 production targets, but he said GM has the capacity to build more than 9.42 million cars worldwide. The company will fight for every sale, he said, but will stay within its strategy to rely on quality products to make money and less on selling cars and trucks with incentives.

If Toyota does pass GM, Wagoner said he would not be pleased. "It won't be a happy day for me, but I've lost basketball games before in my life. You get ready and you learn and you go back the next day, and that's what we'll do," he said. "We're going to fight to keep the position, and if one day we lose it, we'll fight to get it back."

As its U.S. market share shrank when high fuel prices drove people away from trucks and sport utility vehicles, GM cut production last year. But it's rolling out multiple new products and Wagoner said the North American market should be healthier this year.

Toyota, with a better balance of cars and trucks, capitalized on the consumer shift and raised its market share by two percentage points last year. For the first time, the company passed DaimlerChrysler to become the No. 3 auto seller in the U.S.

Toyota isn't concerned about becoming No. 1 globally, said spokesman Irv Miller. The company is working to keep its quality high, focus on customers and roll out its new Tundra full-sized pickup truck, he said.

"A perceived sales challenge for global leadership is not something we're even thinking about," Miller said. Also in the interview, Wagoner said he agreed with Ford CEO Alan Mulally's statements that the United Auto Workers may have to make significant concessions in upcoming contract talks to keep GM competitive.

While he wouldn't be specific about what GM would seek in bargaining with the union, Wagoner said the company faces a cost disadvantage to competitors that needs to be addressed. But he would not say if GM would seek labor cost parity with Toyota and Honda Motor Co., both of which have significant U.S. manufacturing operations.

The UAW will begin negotiating new labor contracts with Ford, GM and DaimlerChrysler in the fall. Like Ford, GM already is talking with the UAW in advance of formal contract talks later this year, Wagoner said. He said the UAW already has helped the company with health care concessions and buyouts that will reduce its hourly work force.

But GM is "not fully competitive" in all parts of its business, he said. "We need to continue to make progress in the '07 negotiations," he said. "If we can make progress and if we can do it on an accelerated basis, I think that would be terrific for us ... But improving competitiveness is fundamental. I don't disagree with what Alan said on that at all."

Wagoner also announced that GM's global sales exceeded 9.1 million vehicles for the second year in a row and the third time in the company's history. Domestic sales were surpassed by sales outside the country, with 55 percent outside the U.S. Global sales declined by 80,000 vehicles last year, with most of that attributed to a decline in U.S. rental car sales, Wagoner said.