GM announces new restructuring plan

DETROIT (WJRT) -- (07/15/08)--General Motors Corp. was taking new action Tuesday to fight through the current economic challenges.

The announcement made Tuesday morning includes further reductions in truck capacity, although the company would not be specific.

Some United States and Canadian salaried positions will be cut. There will also be an elimination of health care coverage for U.S. salaried retirees over the age of 65, effective Jan. 1.

Affected retirees and surviving spouses will receive a pension increase to help offset their costs. Dividends on common stock are suspended immediately.

Mid-Michigan GM plants were spared in the announcement. At the time same time, GM's Chairman and CEO Rick Wagoner did not go into any details regarding the plan.

But he says it's what's needed for GM to improve its finances by next year.

The revised restructuring plan was mainly focused on the business aspect of GM. The automaker is trying to deal with the shift in the U.S. market.

Sales are down, oil prices are high and many consumers are leaving pickup trucks and SUVs behind for smaller vehicles.

The automaker is also burning through a lot of cash, reportedly about $1 billion a month.

The restructuring plan, which includes cutting some white-collar workers, also involves reducing health care coverage for white-collar retirees, reducing truck production, suspending dividends, and eliminating executive bonuses.

That is expected to save GM about $10 billion.

Then on top of that, GM is also exploring the possibility of selling some assets and reviewing its Hummer brand, saving the company an additional $4 billion to $7 billion.

Wagoner and his team are calling this a winning plan that will keep the automaker viable.

"We have a solid and well-thought-out plan that aggressively addresses the challenges that we face," Wagoner said.

"We can't sit back and wait for the U.S. economic market conditions to improve. We need to continue to be proactive and even make some tough decisions to ensure our survival and success."

The word bankruptcy was never addressed Tuesday. No one even asked about it. Wagoner has said before it is not an option for the automaker.

But every job and brand within the company is being looked at as the company changes with the economic conditions.

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local, matt franklin

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