GM president: U.S. economy holding up, other regions slowing or soft

By Reuters

Nov 24, 2014 11:34 PM EST

General Motors Co President Dan Ammann on Monday said he expects "more of the same" next year from a U.S. auto market that has been growing slowly, while he is bracing for continued soft demand in other parts of the globe.

"It's been more downsides than upsides this year," Ammann said in an interview with Reuters reporters and editors here. "I'd say the U.S. has been a little better than we'd planned, but South America has been more challenging and Europe has been a little slower."

As for China, Ammann said competition was "intense" and that sales growth there is slowing, but he emphasized it was a strong auto market that was simply maturing.  

The same cannot be said for Europe and South America, however, he said.

While GM is not backing away from expectations of a profit in Europe for the first time in more than a decade in 2016, Ammann said the region has been "a little softer in this later part of this year than we would have said six months ago."

He also called South America is a "very difficult place to do business" and said Venezuela especially remains unpredictable with its fluctuating currency rates.

The U.S. auto market, the world's second largest after China's, has held up more strongly than the overall economy, he noted.

U.S. new-vehicle sales this year are expected to reach 16.4 million vehicles, up from 15.6 million last year, and most in the industry see another jump to 17 million or more next year. Ammann, who assumed his position in January when Chief Executive Mary Barra took charge of the automaker, sees a similar U.S. market in 2015.

"We've been on a slow, steady recovery out of a very deep trough a few years back," he said. "I don't see it growing enormously from here, but it doesn't feel overly stretched to me either."

The 42-year-old Ammann, who previously served as GM's chief financial officer, said the company's base-line expectations are for U.S. interest rates to rise slowly over time.

Asked about GM's handling of the recall crisis linked to defective ignition switches, Ammann said GM is pleased with how attorney Kenneth Feinberg is administering the program to compensate victims for deaths and accidents linked to the faulty parts.

On Monday, Feinberg added two more deaths to his list of those eligible for compensation, raising the total approved by him to 35.

Ammann declined to comment on a lawsuit filed last week by the state of Arizona accusing the company of putting the public at risk by concealing the safety issues involved and delaying associated recalls.

Separately on Monday, a federal judge in Manhattan overseeing the defective-switch litigation against GM sent a lawsuit filed by the Orange County district attorney on behalf of California customers back to California state court. GM had fought to keep it in federal court along with other civil litigation over the recalls.

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