GM eyes modest 2014 growth, higher restructuring costs

General Motors Wednesday said it expects "modest" global industry growth and a better operating performance in 2014 to more than offset a large rise in restructuring costs. The biggest US automaker forecast "modestly higher" pre-tax adjusted earnings thanks to growth in the US, China and Europe. Profit margins will be "similar" to those in 2013, GM said. But GM anticipates 2014 restructuring costs of $1.1 billion, up from the $400-$500 million it has incurred in recent years, according to a presentation at the Detroit auto show. GM president Dan Ammann told analysts that the restructuring costs arise from plant closings in Germany and Australia, the exit of Chevrolet from Europe and some "incremental restructuring" in South America. "The key message is we are taking advantage of strength in North America and China ... to really take aggressive and assertive steps to fix other parts of the business," such as Europe, Ammann said. GM forecasts overall auto industry growth of about 2 percent in 2014, down from the 4-5 percent annual growth of the last few years, Ammann said. "We see our market share being flat to perhaps slightly up, depending on where you are in the world," Ammann said. On Tuesday GM announced that it intends to begin paying a quarterly dividend in March, the first time since the company's 2008 government rescue. The outlook also comes at turning-point for the carmaker. Mary Barra is taking the reins as the first female chief executive of a large automaker with Wednesday's retirement of outgoing chief Dan Akerson. RBC Capital rated GM's 2014 forecast "slightly disappointing," but said the cautious guidance gives new company management "a little more wiggle room to deal with their first year." Tuesday's "better than expected dividend announcement should add a little support," RBC added. GM shares were down 1.3 percent in mid-afternoon trade.