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Archive for Saturday, July 11, 2009

GM leaves bankruptcy protection

CEO vows revamped company will perform better for customers

July 11, 2009

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General Motors Corp. CEO Fritz Henderson addresses the media after a news conference at the company’s headquarters Friday in Detroit. Henderson announced on Friday that the company had emerged from bankruptcy protection far faster than anyone thought it could and will focus more on customers.

General Motors Corp. CEO Fritz Henderson addresses the media after a news conference at the company’s headquarters Friday in Detroit. Henderson announced on Friday that the company had emerged from bankruptcy protection far faster than anyone thought it could and will focus more on customers.

— General Motors completed an unusually quick exit from bankruptcy protection on Friday with ambitions of making money and building cars people are eager to buy.

Once the world’s largest and most powerful automaker, new GM is now leaner, cleansed of massive debt and burdensome contracts that would have sunk it without federal loans.

But GM, whose 40 days under court supervision was far shorter than anyone predicted, faces the worst auto sales slump in a quarter-century.

At a news conference, CEO Fritz Henderson said the revamped automaker will be faster and more responsive to customers than the old one. It will generate cash and repay billions in government loans ahead of a 2015 deadline.

The new company will build more cars and trucks that consumers want and launch them faster than in the past, the CEO said. GM also announced plans to experiment with auctioning new cars on eBay, expanding on an existing partnership covering certified used vehicles.

“We recognize that we’ve been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done,” he said.

Known for its sluggish decision-making process and bloated management ranks, GM will create a single, eight-member executive committee to speed up day-to-day decision-making, replacing two senior leadership forums.

Henderson, 50, said General Motors Corp. will streamline its bureaucratic management structure, cutting U.S. salaried employment by 20 percent, or 6,150 positions, by the end of 2009. The cuts include 450 executive jobs.

Henderson, who was promoted to chief executive in March, will run the global company and oversee its North American operations. GM’s former chief operating officer, Henderson was chosen when President Barack Obama said former CEO Rick Wagoner’s restructuring plans didn’t go far enough.

Top executives at the new company will focus on business results, new vehicles, brands and consumers.

Bob Lutz, a legendary industry executive, was “unretiring” to become a vice chairman responsible for creative elements of products, marketing and customer relationships, Henderson said. Lutz, 77, had previously planned to retire at the end of the year after more than four decades in the auto business.

Nick Reilly, who has served as GM’s Asia-Pacific president, will become executive vice president of GM’s international operations based in Shanghai, China.

The new company will focus on customers, cars and culture. “If we don’t get this right, nothing else is going to work,” Henderson said at GM’s Detroit headquarters. “Business as usual is over at General Motors.”

The automaker is launching a “Tell Fritz” Web site to allow owners and the public to share their concerns with senior management, and Henderson plans to go out on the road every month.

He said GM plans to partner with eBay in California to allow consumers to bid on vehicles just as they would in a typical eBay auction. They could also choose a “Buy it Now” option to purchase the car at a set price. Dealers would still distribute the cars. A deal between eBay and GM hasn’t been completed yet, however, and both sides say they have been in discussions.

“As a culture, General Motors needs to be prepared to experiment and adjust,” he said.

New Chairman Edward Whitacre Jr. said GM’s trip through bankruptcy protection had been extremely challenging. “There have been a lot of long hours, there have been a shuttering of plants, there have been painful layoffs.”

Whitacre told reporters after the news conference he expected to have GM’s new 13-member board in place in about three weeks.

GM, in a viability plan presented to the government, said it would break even before interest and taxes next year, and be slightly above break-even for 2011 on a pretax basis.

“Sitting here today, I don’t have any reason to disbelieve those numbers,” Henderson said, giving no details of when the company would make a net profit.

l Suggested keys to GM’s success. Page 4B

Comments

just_another_bozo_on_this_bus 5 years, 5 months ago

Any bets on whether GM's main plan is to move most of its manufacturing overseas, primarily China?

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