GM yesterday submitted a plan to use Federal bridge loans to create a leaner, more competitive company.
The plan calls for:
· Increased production of fuel-efficient vehicles and energy-saving technologies;
· Rationalization of brands, models and retail outlets;
· Reduced wage and benefit costs, including further reductions in executive compensation;
· Significant capital structure restructuring;
· Further consolidation in manufacturing operations.
General Motors today offers 20 models with 30 miles per gallon or more on the highway—more than any other manufacturer. General Motors is also the world leader in flex fuel technologies, with over 3 million flex fuel-equipped vehicles on U.S. roads today. Flex fuels represent the fastest way for the United States to reduce its dependence on imported oil.
While remaining a full-line manufacturer, GM will substantially change its product mix over the next four years, and launch predominately high-mileage, energy-efficient cars and crossovers.
In the Plan, further shifts to smaller displacement gas engines will occur—8-cylinder engines are replaced by 6-cylinder engines, 6-cylinder engines are replaced by 4-cylinder engines. More extensive use of turbo-charging is enabling the shift to smaller displacement engines, providing better fuel economy with normal operations but offering power in reserve for emergency situations. 4-cylinder engine usage, for example, will increase by 42% by 2012, and fuel-saving 6-speed automatic transmission volume will increase by 400%, to over 90% of GM‘s U.S. automatic transmission sales volume.
Ernest Ionescu
http://investing-manage-properties.com
http://winner4us.com
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Not only would the immediate economic ripple of a GM, Ford or Chrysler failure be of tsunami-like proportions, but the inevitably stalled or lost progress on alternatives to the internal combustion engine would be catastrophic. Understand that the new propulsion technology in which the auto industry is playing a lead role is not just about selling cars that use a lot less gas, but also about the future power of military equipment and the platform from which the United States deals with other nations, some of which sell us a lot of oil but really don't like us very much.
ReplyDeleteMore challenges lie ahead for our military, and to meet them we need a strong industrial base. For years the military has sought better sources of electric power in its vehicles — necessary to allow troops to monitor their radios with diesel engines off, to support increasingly high-powered communications technology, and eventually to support electric propulsion and innovative armaments like directed-energy weapons. In sum, this greater use of electricity will increase combat power while reducing our footprint. Much research and development spending has gone into these programs over the years, but nothing on the manufacturing scale we really need.
ReplyDeleteNow, though, as Detroit moves to plug-in hybrids and electric-drive technology, the scale problem can be remedied. Automakers are developing innovative electric motors, many with permanent magnet technology, that will have immediate military use. And only the auto industry, with its vast purchasing power, is able to establish a domestic advanced battery industry. Likewise, domestic fuel cell production — which will undoubtedly have many critical military applications — depends on a vibrant car industry.
Congress and White house are talking about $15B loan for desperate American auto makers. The 533,000 November layoff/unemployment statistic had quieted talk of allowing one ore more automakers to go bankrupt. President Bush warned that one of the big tree car makers might not survive the current economic crisis.
ReplyDeleteDear Ernest:
ReplyDeleteBy now I'm sure you've heard that the Administration agreed to provide funding for the U.S. auto industry, including General Motors. We appreciate this support. This funding provides us with a financial bridge to help preserve jobs, support the continued operation of GM and the many suppliers, dealers and small businesses that depend on us.
It's important to understand that these federal loans are not the end of a process, but the beginning of a new chapter in GM's history -- and that chapter's work has just begun. In many ways, the plan accelerates and expands the important work that we've been driving in our North American business for the past several years. But, in reality, it's a blueprint for a new General Motors... one that will be fully competitive in our second 100 years. A General Motors that's dedicated to great products, world-class quality, and exciting design; fully committed to leading in energy-saving vehicles and technology; responsive to the needs of our customers and stakeholders; and focused on long-term sustainable success.
Our focus now turns to rapidly implementing the restructuring plan that we reviewed with Congress earlier this month. We look forward to working closely with the Administration and the appropriate government officials, along with our debt holders, dealers, unions, suppliers, other stakeholders and all of you, to get this done fast. We will continue to be transparent as we execute our plan, and we will provide regular updates on our progress.
And I know I can count on each of you to contribute to these efforts... in the U.S., and around the globe. Almost every region and country in the world is facing challenging times, which calls on all of us to re-commit ourselves to excellence… as "good" is no longer good enough.
I really appreciate the hard work and tremendous support of you and all GM employees in every region in one of the most challenging periods in GM's long history. Thanks for your terrific efforts in 2008, and for all the great contributions I know you'll make going forward as we reinvent General Motors together.
Now, as we head into the holiday season in many parts of the world, I wish you and your families all the best.
Again, my sincerest thanks.
Rick
GM is announcing the following changes:
ReplyDeleteRick Wagoner is stepping down as chairman and CEO, effective immediately. Wagoner, 56, was named president and CEO in 2000, and assumed the role of chairman in 2003.
Fritz Henderson, GM president and chief operating officer, will serve as CEO. Henderson, 50, was named to his current position in 2008. He was previously vice chairman and chief financial officer.