GM: 'Why it will be around for the coming century'

[HarleyEarl]

Dutch Mandel--GM Next: Why it will be around for the coming century

By DUTCH MANDEL

As General Motors looks toward its centennial celebration in September, today might go down in its history as the moment when its corporate life was saved. That's because its much-maligned chairman, Rick Wagoner, announced massive triage measures aimed at keeping the patient alive.

His message should resonate from Wall Street to Main Street. Wagoner and his creditable management team--led by no-nonsense COO Fritz Henderson--addressed all areas of the business.

Yes, GM made some "easy" calls. It will hasten to shutter plants it targeted earlier in the year for closure; those facilities build slow-selling, fuel-inefficient trucks. The move will reduce blue-collar strength. Still, GM's other efforts were across-the-board dramatic.

For example: The sacred GM dividend doled to shareholders is suspended, for a savings of near $800 million.

Spending on white-collar workers will be cut by up to 20 percent based on attrition, buyouts and "other measures."

Executive compensation has been frozen; no discretionary bonuses will be given in either 2008 or '09.

White-collar retirees beyond age 65 will pay their own health-care costs (though corporate pension funding will offset some of this).

Promotion and marketing budgets, identified by Wagoner in his speech to employees as including events and motorsports, are slashed or eliminated.

Development of the next-generation large pickup truck, due in the market by 2012, and all V8-engine work are on hold.

Not all of the news involved the financial scythe. Wagoner talked about increasing capital expenditures in future-powertrain development--read hybrid and fuel-cell. It will move the Chevy Volt plug-in electric vehicle forward. It will scour the world for small cars that can and will fit into the GM North America portfolio.

All of these moves are significant. More important, Wagoner says the company will add $15 billion to the estimated $30 billion war chest GM has available to keep it afloat, even as its stock share price reaches a 54-year low.

Most important, this announcement--which, based on its thoroughness and depth, was obviously a long, thought-out, involved process--sends a powerful cross-town memo. You can have your bankruptcy rumors, which circulated last week. You can have your takeover comments and speculation. But no matter how "transparent" Chrysler aims to make its message, no matter how far Ford's Alan Mulally carries the Blue Oval boys, the gauntlet has been thrown down by GM.

Today's announcement says that they are here for a long, hard fight.

This article was last updated on: 07/15/08, 11:35 et

[Sixty8panther]

I'd like to see them really "throw down the gauntlet"

...by making kickass product.

- a modern day small scca/grocery getter special. (think early 1970s BMW 2002 or Datsun 510)

- CTS & Zeta 2-door hardtops... to make everyones 2-door sedans look cheap & ugly by comparison.

- a mini pickup along the lines of the old Datsun/LUV pickups... perhaps unibody but NOT fwd!!!

[HarleyEarl]

I'd like to see them really "throw down the gauntlet"

...by making kickass product.

- a modern day small scca/grocery getter special. (think early 1970s BMW 2002 or Datsun 510)

- CTS & Zeta 2-door hardtops... to make everyones 2-door sedans look cheap & ugly by comparison.

- a mini pickup along the lines of the old Datsun/LUV pickups... perhaps unibody but NOT fwd!!!

All great product ideas.

I think GM is finally getting it.

It's the product.

Building and marketing mundane cars like they were soap and toothpaste is over.

You have to have some passion for building cars.

They are emotional.

I don't get too misty eyed over my toiletries.

[capriceman]

I don't get too misty eyed over my toiletries.

Have you ever used public restroom toilet paper? I mean i shed a tear when i wipe with that sand paper on a roll.

[daves87rs]

Have you ever used public restroom toilet paper? I mean i shed a tear when i wipe with that sand paper on a roll.

[daves87rs]

They should hang in there just fine.....they are making the rights cuts now....more will be made-though it should allow for some cooler products....