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Thread: GM - the story is out.

  1. #1
    Regular Member Ste's Avatar
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    Default GM - the story is out.

    Had an email at work today about the GM roadmap for viability. Enjoy.....


    GM's Crash Diet: Thousands Cut

    To get viable fast, GM is slashing 10,000 more workers from global payrolls, and dramatically trimming its lineup and production. By David Welch
    General Motors (GM) is slashing staff in moves aimed at shrinking the company and showing that it is serious about saving cash in preparation for another round of government loans.
    The company said that it will cut 10,000 workers from its global salaried staff of 73,000 and temporarily cut pay by 3% to 7% for those who remain. At the same time, GM is escalating its push to find buyers for Hummer and Saab, two of the four brands that GM no longer views as core to its future, and is looking to restructure its debt.

    Road Map for Viability

    The cuts come as part of the plan GM outlined for the federal government on Dec. 2 to get approval for billions of dollars in loans. GM needs to show the Treasury Dept. a road map for viability and profitability by Feb. 17 in order to keep $13.4 billion in loans from the government.
    Of the 10,000 jobs being cut, 3,400 of them will come from GM's U.S. staff, which has 29,500 workers. The company says the cuts will be targeted so that individual departments don't lose too many people.
    Analysts say that GM needs to make the cuts and has probably not sliced deep enough since it fell into a financial crisis back in 2005. "How is it that four years into a crisis, there are still 10,000 people they can cut," says Maryann Keller, an independent auto analyst who covered GM on Wall Street for decades. "They should be cutting into bone by now."
    GM's North American operations are taking a pretty big hit since sales are so weak in the U.S. Other, healthier regions may have fewer cuts. At the same time, GM has been offering buyouts to United Auto Workers members
    in a bid to reduce its factory capacity. More plant closings may also be in the offing.

    Selling Off Brands

    GM has a few other pieces of its viability plan that are still in the works. When GM laid out its initial plan in December, the company said that it would explore options for its bloated family of brands, including selling or shuttering Saab, Saturn, and Hummer, while shrinking Pontiac down to a brand selling just two cars—likely to be the G8 sedan and the Solstice two-seater—at Buick/GMC dealerships.
    But it won't be an easy sell. Even with gasoline prices down, Hummer's aging product line is drawing fewer buyers. Hummer sales fell 62% in January. GM was talking to two players, former Hummer owner AM General and China's Chengfeng Motors. But both have backed away, say sources involved with the sale efforts.
    GM still needs to peel Saab out from GM's European business and recapitalize it. For the past month, GM has been in intense negotiations with the Swedish government to get loans through one of two programs. One program has up to $24 billion available to Swedish industrial firms from the European Investment Bank, and another program has up to $600 million available from Sweden's government, said Frank Nilsson, a spokesman for the Swedish Ministry of Enterprise & Energy.

    The Swedish government also wants a viability plan for Saab before it approves loans from either fund. While the Swedes wouldn't stop a sale of Saab to another automaker, the government does not want to take a stake in
    the company, Nilsson said.

    Restructuring Debt

    GM also needs to get its bondholders to restructure the company's debt. GM owes creditors $43 billion already.
    Add in money owed to a union-led health-care trust and possible government debt of $13.4 billion, and the carmaker's debt would be in excess of $60 billion.
    As part of the bailout terms, GM has to negotiate the unsecured debt to 30% of its value, exchanging equity to the creditors. That won't be easy. Sources close to some of the creditors say that the bondholders want to see
    deeper cuts from the UAW before they make concessions.
    Some creditors have also contacted legal counsel to see what would happen to them if GM didn't get more government aid and filed for bankruptcy. That's a sign they may be getting nervous, since unsecured creditors would get paid after secured creditors and the government. "One line from Treasury will be, 'If you don't have us come in and help, your collateral will be even less,'" says Don Workman, a bankruptcy attorney with Baker & Hostetler in Washington. "You have to play to get paid."
    Still, to mollify bondholders and the government, GM will need to get UAW President Ron Gettelfinger to give more. GM could ask the union for greater co-pays for health care to lower the long-term health-care liability and,
    hence, how much GM needs to give the union to start the health-care trust. There could also be more job and wage cuts coming.
    If the government doesn't think it's enough, then President Obama's car czar—a position that has not been filled—could ask all sides to give more. But bigger moves may have to wait until the car czar is appointed and gets a staff in place. "Until you get all the parties in the same room, not a lot will happen," says David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. When it does, GM may have a real opportunity to use the threat of government oversight and withholding of bailout funds to finally transform its business.

    Source
    http://www.businessweek.com/bwdaily/...osition=link14

  2. #2
    spoons
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    What the hell is 'shuttering' ??

    "including selling or shuttering Saab, Saturn, and Hummer"

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    Full Member izonoky's Avatar
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    odd that there's no mention of Opel/Vauxhall.

    2.2 Direct SRi

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    Regular Member Ste's Avatar
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    ....

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    Default

    Quote Originally Posted by spoons View Post
    What the hell is 'shuttering' ??

    "including selling or shuttering Saab, Saturn, and Hummer"
    Closing down, 'putting the shutters down'?

    Doubt that it means 'mothballing', as they will cease to exist if no buyer is found.

  6. #6
    Regular Member Ste's Avatar
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    Quote Originally Posted by spoons View Post
    What the hell is 'shuttering' ??

    "including selling or shuttering Saab, Saturn, and Hummer"

    I think it means making them independant of GM

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    Regular Member ccsnet's Avatar
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    ...intresting and yet not supprising...

    Terran

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    Vec-C Facebook Admin thegoldenbullet's Avatar
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    Quote Originally Posted by spoons View Post
    What the hell is 'shuttering' ??

    "including selling or shuttering Saab, Saturn, and Hummer"
    Boooooo at your avatar!!! 17 Sqn sucks lol

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    Shuttering = partitioning.

  10. #10
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    That was very wide of the mark Ste.

    I'd ignore anything from your 'source' in future.

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