Having to deal with record-breaking oil prices makes auto companies struggle significantly. Those suffering the most are certainly the ones with a number of fuel-inefficient vehicles in their lineups. You can count GM in that group, although its financial health looks to be getting back on track.
Recently, the American auto giant decided to shut down four assembly plants, including the one in Oshawa, Ontario, which led to 1,000 jobs lost. GM executives chose to reduce production of pickup trucks and SUVs while increasing the capacity for compact cars and crossovers, two highly popular segments in today's market.
Following these announcements, GM said that it will take actions to further reduce structural costs and generate cash, with the goal of maximizing liquidity. For instance, hundreds of workers will receive incentives to retire early and health care coverage for U.S. salaried retirees over 65 will be eliminated. In addition, there will be no annual discretionary cash bonuses for the company's executive group in 2008.
Furthermore, GM will reduce and consolidate sales and marketing budgets, delay the next-generation large pickup and SUV program and finally sell various assets.
The cumulative impact on liquidity through 2009 is projected to be approximately $15 billion.
photo:General Motors
Recently, the American auto giant decided to shut down four assembly plants, including the one in Oshawa, Ontario, which led to 1,000 jobs lost. GM executives chose to reduce production of pickup trucks and SUVs while increasing the capacity for compact cars and crossovers, two highly popular segments in today's market.
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Following these announcements, GM said that it will take actions to further reduce structural costs and generate cash, with the goal of maximizing liquidity. For instance, hundreds of workers will receive incentives to retire early and health care coverage for U.S. salaried retirees over 65 will be eliminated. In addition, there will be no annual discretionary cash bonuses for the company's executive group in 2008.
Furthermore, GM will reduce and consolidate sales and marketing budgets, delay the next-generation large pickup and SUV program and finally sell various assets.
The cumulative impact on liquidity through 2009 is projected to be approximately $15 billion.
photo:General Motors