In an interview with the Detroit Free Press, GM CEO Rick Wagoner revealed that 2005 will see GM sell more vehicles overseas than in the U.S. for the first time. In 2003, GM sold 20 percent more vehicles in the U.S. than abroad. The shift is due partly to GM's overseas expansion, typified by its success in China, and partly by its declining market share in the U.S. (forecast at about 25 percent for 2005, versus more than 50 percent in the the glory days of the early '60s).
Curiously, Wagoner admitted that he was surprised to learn that his company would make the majority of its sales abroad this year.

More important than the balance of sales is the financial drain on the company of its North American unit, which has lost nearly $5 billion so far this year. The contrast between its comparatively new overseas operations and the North American group certainly throws a spotlight on the burden of GM's legacy cost structure. In everything from labor agreements, to manufacturing infrastructure, to brand and product mix, to sales and distribution networks, GM North America is hobbled by past decisions and commitments.

Wagoner says that GM's ability to turn around the North American operation in the next three to five years will determine the fate of the entire company. From here, that looks like little enough time to steer the Titanic clear of the iceberg.



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