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  • Down to Four

    Posted on April 27th, 2009 ninarussin

    General Motors restructuring plan cuts brand offerings in half by 2010



    This morning, General Motors revealed an updated viability plan that focuses on four core brands in the US: Chevrolet, Cadillac, Buick and GMC. The automaker will phase out Saab, Saturn and Hummer by the end of this year. Pontiac operations continue to the end of 2010.

    “We are taking tough but necessary actions that are critical to GM’s long-term viability,” said Fritz Henderson, GM president and CEO. “At the same time… we will  do whatever we can to mitigate the effects on the extended GM team.”

    General Motors anticipates a 42 percent reduction in dealerships, from 6,246 in 2008 to 3,605 by the end of 2010. The restructuring will result in a production drop of 190,000 vehicles in the second and third quarters of 2009.

    The plan lowers GM’s break-even point, improving its ability to generate positive cash flow: as required by the US Treasury in its March 30 viability assessment.

    The plan also pares down structural costs, reducing the number of assembly, powertrain and stamping plants in the US by 28 percent at the end of 2010. The automaker will use flexible manufacturing, which allows multiple models to be built in one plant, to use its capital more efficiently.

    In addition, the automaker is cutting hourly labor costs 34 percent by the end of 2010. Together, cutbacks in manufacturing facilities and employees will reduce GM’s structural costs 25 percent.

    GM will continue to invest in future products and new technologies, concentrating on fuel efficiency improvements and alternative fuel power trains. The automaker is continuing development of the Chevrolet Volt extended range electric car. The Volt goes into production at the beginning of 2010, and rolls into dealerships shortly thereafter.

    “The viability plan reflects the direction of President Obama and the US Treasury that GM should go further and faster on our restructuring,” said Henderson. “This stronger, leaner business model will enable GM… to develop new advanced propulsion technologies that are vital for our country’s economy and environment.”

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