At a press conference in Detroit a short while ago the Chief Executive Officer of General Motors, Fritz Henderson, outlined “an updated Viability Plan that will speed the reinvention of GM's US operations into a leaner, more customer-focused, and more cost-competitive automaker.”
Mr Henderson said the Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes.
Significant changes include:
* A focus on four core brands in the US - Chevrolet, Cadillac, Buick and GMC - with fewer nameplates and a more competitive level of marketing support per brand.
* A more aggressive restructuring of GM's US dealer organization to better focus dealer resources for improved sales and customer service.
* Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants.
* Lower structural costs, which GM North America (GMNA) projects will enable it to breakeven (on an adjusted EBIT basis) at a US total industry volume of approximately 10 million vehicles, based on the pricing and share assumptions in the plan. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.
"We are taking tough but necessary actions that are critical to GM's long-term viability," said Mr Henderson, GM president and CEO.
"Our responsibility is clear - to secure GM's future - and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team."
Mr Henderson said that as part of the revised Viability Plan and the need to move faster and further, GM in the US will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC.
He said, “The Pontiac brand will be phased out by the end of 2010.”
GM will offer a total of 34 nameplates in 2010, a reduction of 29 per cent from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries.
He said this four-brand strategy would enable GM to better focus its new product development programs and provide more competitive levels of market support.
Mr Henderson added that the revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest.
Updates on these brands would be provided as these initiatives progressed.
There was no mention of the future of Opel in Germany or Holden in Australia.
He said; ”Very importantly, development and testing of the Chevrolet Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.
"The Viability Plan reflects the direction of President Obama and the US Treasury that GM should go further and faster on our restructuring," Mr Henderson said.
"We appreciate their support and direction. This stronger, leaner business model will enable GM to keep doing what it does best - provide great new cars, trucks and crossovers to our customers, and continue to develop new advanced propulsion technologies that are vital for our country's economy and environment."