WorldCity Business Magazine

GM's money maker

by Joachim Bamrud

South Florida-based Maureen Kempston Darkes, recently rated the seventh most influential woman in international business by Fortune magazine, oversees 20,000 employees in Latin America, the Middle East and Africa – and just recorded her first profitable.

While 2004 resulted in declining profits for General Motors, the world’s largest automaker, the division headed up by Maureen Kempston Darkes was a bright spot, with growing profits and increased marketshare.

“2004 was an outstanding year for GM in the … region both in terms of market share and sales results as well as profitability,” she says.

Last year was the third consecutive year that GM Latin America, Africa and the Middle East has grown its market share and the first time her division has been profitable since 2001, Kempston Darkes points out.

“The improved results for 2004 were due in large part to leveraging GM’s vast product portfolio, especially the new Chevrolet products that meet the needs of younger consumers, like our Aveo and Epica,” she says.

Last year, the division’s market share rose to 17.4 percent, up from 16.3 percent in 2003.

“In virtually every country we’ve grown at least one, two or even three points of share,” Kempston Darkes says.

The Toronto-born executive has been the president of GM Latin America, Africa and the Middle East the past three years. In that capacity she also is a member of GM’s Automotive Strategy Board along with her counterparts in Europe, Asia and North America. The board is headed up by GM CEO Rick Wagoner and also includes auto industry legend Bob Lutz.

Her career with GM spans 30 years, starting with a job at GM Canada’s legal staff and ending at the top job in Canada prior to her latest appointment. In the interim she was also appointed to the blue ribbon panel on the U.S.-Canadian Free Trade Agreement.

But it’s as president of the developing markets for GM she has had the greatest impact not only on GM, but also the regions she oversees for her employer. She has played a key role in the creation of thousands of jobs and millions of dollars of investment into local economies that are still developing.

And while many South Florida executives face the challenges of Latin America’s diversity, Kempston Darkes has to deal with the daily realities of Africa and the Middle East as well.

Her division spans three continents in seven different time zones. That means dealing with 15 different currencies in 86 countries and 22 markets. These regions are diverse economically with GDP per capita ranging from $850 to $20,500 and culturally with four world religions (including Catholicism in Latin America to Islam in the Arabic world and Judaism in Israel).

Two years ago, Fortune named her the seventh-most powerful woman in international business.

“It was another tough year for the auto industry,” the magazine wrote. “Kempston Darkes, GM’s and probably the car industry’s highest-ranking woman, remained undeterred, focusing on increasing market share in Latin America and introducing a record number of new models in the Middle East.”

But she has also been able to experience first hand the unique flavor of the different regions she oversees.

Among the highlights: Taking 4-wheel drive trucks over 40-foot dunes in the Middle East to watch the sun set in the desert outside Dubai and riding camels to dinner in the middle of the desert.

Among the downsides: The culture of discrimination against women.

“When I travel to the Middle East, I represent the largest automotive manufacturer in the world, but it’s illegal for me to drive in Saudi Arabia because I am a woman,” she said.

Kempston Darkes herself is not the only prominent GM executive in her regions who is a woman. The CFO of GM in Ecuador, the head of human resources at GM in Egypt and the regional medical director for are all women.

GM sold 737,000 vehicles in Latin America, Africa and the Middle East last year, an increase of 26.2 percent compared with 2003. Revenues grew by 65 percent to $8.5 billion. More importantly, the group posted a net income of $85 million after losing $330 million the year before.

“It has also been a great year for us on the financial side due to increased revenue and revenue diversification,” Kempston Darkes says.

To restore profitability, her region focused on increased revenue and revenue diversification as well as reducing costs in Brazil and levering GM’s global product line.

“Focusing on these three areas has allowed us to take full advantage of the improving economic conditions across the region,” she says.

GM expanded its Africa revenues by completing the acquisition of Delta Motors in South Africa and expanding its product lineup in the country. Volume grew by 36 percent in South Africa, her region’s second-largest market after Brazil.

GM also continued to reduce Brazil’s structural cost, while maintaining a very lean cost structure.

“GM do Brasil’s increased volume helped offset unfavorable exchange and under Ray Young’s leadership, they are expected to beat their financial targets,” Kempston Darkes says.

Last year, GM do Brasil became the top auto company in the South American country for the first time in its 80-year history. Growth was even stronger in the Middle East 60 percent and Kempston Darkes hopes to see that doubled by 2009.

“We’re benefiting from growth in the Middle East, and we are driving a richer product mix in both regions, reducing the dependency on Latin American performance,” she says.

Finally, her region is leveraging GM’s global product portfolio, both by using existing products and developing product derivatives to increase regional contribution margins and grow market share.

However, the region Kempston Darkes oversees also offers its share of challenges. Key among them the political and economic volatility.

“When you’re working with volatile countries you need to be prepared to stay for the long term,” Kempston Darkes said. “Your leaders must be resourceful, able to persist through ups and downs and ever-shifting cycles, and have the ability to organize your business so you have staying power.”

Then there’s terrorism, an AIDS epidemic in Africa and rapidly changing demographics that boost job demand in Latin America and pressure wealth creation.

As for the future, Kempston Darkes is bullish.

“There is still more opportunity for us to grow revenue and profit this year,” she says. “With the biggest growth regions in automotive Asia Pacific and my region, LAAM, we know General Motors Corporation is counting on us to improve our performance even over what we did last year to help offset the North America performance this year, which is being severely impacted by high healthcare costs.”