General Motors Company (NYSE:GM) CFO, Chuck Stevens, announced that GM will generate $350 million is profits over next three years from its 4G LTE mobile broadband for its cars and trucks.
Stevens, speaking at a Bank of America Merill Lynch conference stated that the OnStar 4G LTE connection of GM was an untapped opportunity, which could be used to generate revenue for the company.
The 4G LTE connection is aimed at younger, tech-savvy buyers. The tech allows faster data speed to cars and also better in car technology. Stevens stated that 4G LTE will generate $350 million in profits between now and 2018 and called it “just the beginning.”
Over 30 models of GM have had 4G LTE installed in them in 2015, and the company expects all its car models to have the capability by 2016.
Stevens said the company is targeting improved operating profits and margins in auto regions He stated that the company aims 10% operating margins and profit in Europe in 2016. Stevens also stated that the company expects its financial arm, GM Financial’s operating earnings will double by 2018.
Answering a question, Stevens also mentioned that GM would reduce its U.S. hourly pension obligation. The company, in 2012, sold its obligations to a third company.
In the last round of labour talks in 2011, GM and United Auto Workers (UAW) union had reached an agreement to discuss ways of reducing pension shortfalls. The agreement lacked specifics; however according to experts steps may include allowing UAW-represented retirees to take voluntary retirement for a lump-sum payment.
In related news, General Motors Company (NYSE:GM) has been facing problems ranging from disgruntled investors and a safety crisis. It is, therefore, eager to jump back to cars and trucks business and improve its stagnant share in the auto market. It will do so in this week’s New York auto show by showcasing its offerings. Last year GM had to recall record number of vehicles on safety issues, the show allows GM to showcase its newer and safer products.