GM's Wagoner sees no problem with dealer orders

DETROIT, Aug 20, 2004; Reuters reported that General Motors Corp Chief Executive Officer Rick Wagoner on Friday denied that dealerships were cutting back on orders of the company's 2005 models due to bulging inventories of unsold 2004 models.

The Wall Street Journal reported on Friday that dealers have too many unsold vehicles and worry that big discounts will not attract buyers, as U.S. job growth slows and fuel prices stay high.

"I don't really think we had a lot of problems with '05 orders at all," Wagoner told reporters.

"I can't say we are encountering any more than the normal year change-over," he said, referring to the need to sell many 2004 model year vehicles before the traditional introduction of new vehicles in the fall.

Wagoner acknowledged dealer inventories were "a little higher." But said he hoped to see a significant reduction over the next few months.

"If the economy comes back stronger then it will be an easier assignment," he said.

"But they will all eventually be sold. That's my experience."

Wagoner spoke as GM kicked off an annual celebration of Detroit's automotive industry known as the "Dream Cruise."

Wagoner did note that GM's third quarter North American production was down year-over-year, as the world's largest automaker moved to cut inventories, and indicated that fourth quarter production will also be lower as well.

GM's third quarter production was down 5 percent from the same period a year ago.

Wagoner, however, said there would be "no radical changes" in the fourth quarter production, which is likely to be announced on Sept. 1.

Wagoner also said the company remained on track to meet its full-year earnings target of $7 a share.

"That's where we are right now," he said.

Wagoner did say that GM's August U.S. sales will be lower than the same month a year ago, but said that was only because of a very strong month in 2003.

"It's going to be a good sales month," he said on August sales results, which would be reported on Sept. 1.