GM Sees Future With More Hybrids and EVs; Fewer Brands and Dealers
General Motors put its greenest and leanest foot forward in outlining a corporate survival program, while admitting that it needs $12 billion in direct loans during the next 12 months -- and $4 billion by the end of the year just to make it into 2009. The General also is seeking an additional $6 billion line of credit to cope with potential contingencies as it attempts to remake its very core structure. As part of its commitment to that transition, GM plans to invest $2.9 billion in alternative fuels and other advanced propulsion technologies during the next three years, funds that will help generate a new generation of vehicles that can get from 12 to 120 percent better fuel economy than gasoline-powered counterparts. By 2012, it expects to have at least 15 hybrids in its lineup including the Chevy volt plug-in and make half of its fleet flex-fuel capable. Additional emphasis also will be focused on developing a commercially viable fuel cell system.
In return for its share of what has now ballooned to roughly $34 billion in total federal assistance, the automaker is prepared to undergo a Draconian downsizing that will make all previous changes in that area pale by comparison. According to CEO Rick Wagoner -- who made the trek to Washington D.C. in a Malibu Hybrid -- GM will put its major support into its four core brands: Chevrolet, Cadillac, Buick and GMC. While Pontiac is envisioned as becoming a niche player, Saab will join HUMMER on the chopping block and Saturn will either be sold or folded. As part of this cutback, the number of corporate nameplates will drop from 63 to about 40 in 2012, and GM expects to trim the total dealer body count from 6,450 to around 4,700.
Similar reductions will be enacted with respect to consolidating operations at various assembly plants. To that end, the total labor force of both blue- and white-collar workers it set to drop from the already downsized 96,000 current U.S. employees to between 65,000-70,000. In addition to cutting the annual compensation for GM's Chairman and CEO Rick Wagoner to $1, the firm will reduce compensation levels for senior management and suspend dividends on its common stock for the duration of any federal loan period and work with various creditors to restructure existing debt. Once all of the pieces are in place, GM claims that it will be able to operate profitably with industry volumes in the 12.5-13 million level and anticipates being able to start repaying its loans as early as 2011.