GM has just outlined its plan for the immediate future to the US Congress in an effort to secure billions in US taxpayer-funded bridge loans to stave off bankruptcy. The proposed measures include selling Saab and Hummer, shedding up to 25,000 jobs and closing 1750 dealerships.
The clincher is that GM has raised the total it would like to ?borrow? - up from the $10-12 billion first proposed to $US18 billion. A sizeable figure given that there is only (at this stage) $US25 billion in proposed loan funds up for grabs by the big three.
GM is now saying that it needs $US4 billion before the end of the year, just to keep the doors open and the lights on. It will then require another $US12 billion by the end of March, in order to see 2009 out. Another $US6 billion is required as a revolving line of credit for use in the event that the car industry is still facing a downturn come the end of 2009. The plan put to Congress includes GM beginning to pay back the loans by 2011.
Other concessions offered by the automaker in its bid to secure the funds on offer include Rick Wagoner agreeing to drop his salary to $1, along with pay cuts for a number of other senior executives. The General will also open its doors to a government oversight board, that will keep tabs on how the loan funds are used.
And of course, the Corporate Jet Fleet has been canned as well.
The following list of proposed actions put to Congress by GM, will give you an idea just how important to GM?s survival the loan funds seem to have become;
- Return focus to core brands - Chevrolet, Buick, GMC and Cadillac
- Sell Saab and HUMMER
- Sell or close Saturn
- Reduce Pontiac to a "niche" brand
- Focus on the development of high mileage, energy-efficient cars and crossovers
- Reduce total workforce from 96,000 to 65-75,000
- Close 1,750 dealerships (reduce from 6,450 to 4,700)
- Re-establish discussions with the UAW with a view to further reducing labour costs
- Negotiate with current lenders to strip $35.6 billion in debt from the balance sheet
It's taken a while for the penny to drop.
[Source: Automotive News]