The Dallas Morning News (via the Associated Press) recently ran a story on the super quick exit General Motors took from bankruptcy protection on Friday. The beleaguered car company is now full of hope and ambitions to make money and build cars people will line up to buy. Of course, whether that dream will become reality still remains to be seen.
GM DOES have several positives in its favor now. Once the world's largest and most powerful automaker, the new and improved GM emerges from bankruptcy leaner and clear of massive debt and burdensome contracts that would have driven it completely under without federal loans. On the flip side, although fast-tracked through bankruptcy far more quickly than predicted, GM now faces the worst auto sales slump in 25 years.
CEO Fritz Henderson took advantage of a news conference to share some of the company's plans for the future, saying that the revamped automaker will be faster and more responsive to customers than the old one. The goal is for GM to generate cash and repay billions in government loans ahead of its 2015 deadline. GM also announced a partnership with eBay Inc. to test auctioning vehicles online. "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.
Infamous for its lethargic decision-making process and unwieldy management team, GM will downsize to a single, eight-member executive committee to streamline day-to-day decision-making. Henderson, 50, said GM will also optimize its bureaucratic management structure, cutting U.S. salaried employment by 20 percent, or 6,150 positions, by the end of 2009-- including 450 executive jobs.
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 Downtown Detroit headquarters. "Business as usual is over at General Motors...As a culture, General Motors needs to be prepared to experiment and adjust."
New Chairman Edward Whitacre Jr. discussed how challenging GM's trip through bankruptcy protection had been. "There have been a lot of long hours, there have been a shuttering of plants, there have been painful layoffs." He told reporters after the news conference he expected to have GM's new 13-member board in place in approximately 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.
Turning a profit will not be easy. GM has piled up losses and survives only because of government loans. But Henderson claims that recent concessions by the United Auto Workers union just before the company entered bankruptcy protection will allow GM's labor costs to put the company in position to be fully competitive with Toyota Motor Corp.
Here's hoping GM's bankruptcy dreams become reality!