General Motors chief executive Mary Barra says the company will emerge out of the coronavirus pandemic with a reduced cost base that will likely be permanent.
As the pandemic hit, GM quickly reduced its cash burn to protect itself from the two-month shutdown of North American production. While speaking at a recent investor event with Credit Suisse, Barra said the pandemic forced the manufacturer to become more efficient.
“We were quickly able to take out significant costs and we are being very conservative about what costs we turn back on,” she said. “I believe we will come out of this with a lower cost structure that is permanent. We’ve found things that we don’t need to do and things we can do more efficiently.”
Barra added that cost reductions could include fewer different vehicle platforms and reducing the complexity of the platforms it uses to be more focused on producing the vehicles that consumers actually want, Reuters reports. In addition, GM has had the opportunity to go through all of its line item expenses and eliminate redundant processes.
GM joined other car manufacturers such as Ford and Fiat Chrysler Automobiles in restarting production in the U.S., Canada, and Mexico in mid-May.
However, it hasn’t been totally smooth sailing as it had to delay the resumption of second shifts at some of the truck assembly plants in Michigan, Indiana, and Mexico due to a parts shortage from Mexico. While speaking during the Credit Suisse event, Barra said that if there are problems in GM’s supply chain, the car manufacturer will focus on diverting parts for its highly-profitable pickup trucks.
