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Automotive News & Views GM News, New Models and Market Share
8516 messages, Last post on Nov 30, 2009 at 6:15 AM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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GM offers cuts in brands, salaries, debt, payroll The General Motors of 2012 will have fewer brands and nameplates, thousands fewer dealers and employees, and much less debt on its balance sheet, under a restructuring plan GM gave Congress today. GM will focus on its "core brands" of Chevrolet, Buick, GMC and Cadillac, the plan says. GM will sell Saab, shrink Pontiac to a niche brand and consider selling or closing Saturn, GM President Fritz Henderson told reporters at a briefing today. GM also plans to trim its U.S. dealerships from today's 6,450 to about 4,700, Henderson said. It will cut about one-third of the nameplates from its vehicle lineup. GM's plan asks Congress for $12 billion in loans by the end of March. It seeks another $6 billion in revolving credit if market conditions don't turn around. The total request is higher than the $10 billion to $12 billion that GM CEO Rick Wagoner requested of lawmakers during congressional hearings two weeks ago. Henderson called the GM plan "a blueprint for creating a new General Motors -- one that is leaner, profitable, self-sustaining and fully competitive." Among its key features: • Reducing the number of GM brands and nameplates, a step GM critics have demanded for years. Henderson said GM will seek a buyer for Saab. Pontiac will be shrunk to a "specialty, niche" brand, Henderson said. GM already has put Hummer up for sale. Under its franchise agreement with Saturn dealers, GM will seek a new course for that brand, Henderson said. Asked whether GM would sell or fold Saturn, he said he would not eliminate any options. The brand "is just not successful," Henderson said. The number of GM nameplates would drop from 63 today to about 40 by 2012, Henderson added. • Trimming GM's 6,450 U.S. dealerships to about 4,700. Most reductions would occur in metropolitan areas, Henderson said. • Reopening talks with the UAW to cut manufacturing costs further. Henderson declined to identify the additional concessions GM will seek. But he said GM expects to be fully competitive in labor costs with Toyota Motor Corp. by 2012. Henderson estimated GM's total U.S. head count would drop from today's 96,000 employees to between 65,000 and 75,000. • Negotiating with lenders and bondholders to remove about $35.6 billion in debt from GM's books. At the end of September, the company owed $66 billion. Henderson said that debt load is too heavy. Sounds to me like it isn't enough. They will still have way too many dealers for one thing. And how are they going to get their labor costs down by 1/3 AND eliminate the Jobs Bank? Doesn't seem plausible. I also don't think they can continue to capture more than 20% of the U.S. market, so their projections based on a 24% market share are also apt to get them in further hot water. http://www.autonews.com/apps/pbcs.dll/article?AID=/20081202/ANA02/812029978/1200- - (registration link) Edit...oh, and you just GOTTA love this: In the plan submitted to Congress today, GM said: "Absent such assistance, the company will default in the near term, very likely precipitating a total collapse of the domestic industry and its extensive supply chain, with a ripple effect that will have severe, long-term consequences to the U.S. economy." That kind of talk leaves me half tempted to say BRING IT ON BABY! I mean, really, come ON........ |
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Replying to: imidazol97 (Dec 02, 2008 1:46 pm) I don't think we have seen anywhere near the whole scope of financial mess we're in. I read CBS Marketwatch, and the people who were predicting this foreclosure mess a year or 2 ago, are saying that this slowdown is going to domino into a commercial property disaster next - malls, restaurants, businesses consolidating, and as people lose jobs you're going to have massive credit card defaults. Watching ABC news tonight, they had an article on the cuts having to be made in 40 states to balance budgets including CA at -$28B. Ohio next year is looking at an $8B budget deficit. And given the bailouts this year the feds at $1,000+B deficit/year is not coming to the rescue! There will be many cuts in the nations largest employer - government. So this is far from over. The economy isn't jumping back to healthy, anytime soon. Things probably are going to get worse for far longer than we've ever experienced. Car sales will be lucky to hold where they are now. |
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Replying to: nippononly (Dec 02, 2008 4:43 pm) The total request is higher than the $10 billion to $12 billion that GM CEO Rick Wagoner requested of lawmakers during congressional hearings two weeks ago. They must have had an early look at the Nov. sales numbers! Frackin unbelievable!
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Replying to: kernick (Dec 02, 2008 4:50 pm) |
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Replying to: nippononly (Dec 02, 2008 4:43 pm) That kind of talk leaves me half tempted to say BRING IT ON BABY! I mean, really, come ON........ In Fords report it says the same thing. If GM goes under Ford will follow suit because of suppliers.
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Replying to: m4d_cow (Nov 30, 2008 10:09 pm) If anything, you have it backwards. The Lambdas are comparable to the Tahoe in size, and the Sub. is far more stable as a towing vehicle, due to the longer wheelbase. |
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Replying to: kernick (Dec 02, 2008 12:46 pm) That's closer to the truth than anyone in Michigan will ever admit! As an former engineer at a major GM supplier I can tell you that GM has 12 months to live IF they get this money. 60 days without it! Time to let nature take it's course. |
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Replying to: 62vetteefp (Dec 02, 2008 5:18 pm) I am proud of you! The problem is this has become a sales pitch for cheap capital on the backs of taxpayers. They can not justify their existence as a profitable entity. While it is partly due to the economic downturn, the decisions in the past 3 -5 years have been nothing short of laughable. Sure it's 20-20 hindsight but even I knew that D3 has been on life support long ago. Who am I? "There isn't a Plan B," said GM Chief Operating Officer Fritz Henderson. "Absent support, frankly, the company just can't fund its operations." It's not going to be the end of the world, just the sad epitaph of a once proud but then ultimately a bloated, mindless and blind industry that past the point of no return long ago. The moral is that although others have done far better as the D3 eroded, the Home Team could not or would not change to the beat the competition. Oh, part of the moral: Don't keep pissing off your customers. and these: * Greed destroys the source of good. ($74/hr. compensation) * Think before you act. (3 private jets to one meeting?? And you make CARS????) * Those who want too much lose everything. (60 nameplates??) Regards, OW |
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Replying to: circlew (Dec 02, 2008 4:42 pm) What bank(s) do you suppose they'll take down with them if they default???
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Replying to: cooterbfd (Dec 02, 2008 5:57 pm)  They are now bullet proof because Uncle Sam will save all financial institutions. Lehman was an "Oops!" Regards, OW
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