- Reaffirms GM’s commitment to energy-saving vehicles and technologies
- Outlines the need for Federal bridge loans and line of credit
- Requests Federal board to oversee loans, assist with restructuring
- Aggressive plan details GM actions to support long-term success
General Motors Corp. today submitted a plan to use Federal bridge loans to create a leaner, more competitive company, one that is profitable and self-sustaining for the long term.
Loan Request
GM is requesting term loans of up to $12 billion to provide adequate liquidity levels through December 31, 2009. GM’s intent is to begin to repay the loans as soon as 2011.
Focus on Efficiency
GM has made significant progress in revamping its product lineup, with new GM cars earning car of the year awards. In addition, the Chevy Volt, which can travel up to 40 miles on electricity alone, is scheduled for production in 2010, and GM is planning other vehicles using Volt’s extended-range electric drivetrain. By 2012, more than half of GM vehicles will be flex-fuel capable, and the company will offer 15 hybrid models.
Reduced Product Lineup
In the U.S., GM will focus its product development and marketing efforts on four core brands – Chevrolet, Cadillac, Buick and GMC. Pontiac will be a specialty brand with reduced product offerings within the Buick-Pontiac-GMC channel. Hummer has recently been put under strategic review, which includes the possible sale of the brand, and GM will immediately undertake a global strategic review of the Saab brand. As part of the plan, the company also will accelerate discussions with the Saturn retailers, consistent with their unique relationship, to explore alternatives for the Saturn brand.
Further restructuring
GM says it will continue cutting up to 30,000 workers by 2012 and continue closing up to at least nine plants. The automaker said it will also slash more than 1,700 of its 6,400 dealers.
Salary cuts
In response to concerns about executive compensation, Wagoner will take a $1 annual salary. Henderson, who received $1.9 million last year, will take a 30 percent cut, while three others - Vice Chairman Bob Lutz, Chief Financial Officer Ray Young and Tom Stephens, executive vice president of GM powertrain and global quality - will all take 20 percent cuts. GM’s Board of Directors will also reduce their annual retainer to $1 in 2009.
