General Motors' 39-day odyssey through bankruptcy is over

The new GM is smaller, leaner -- and executives promise it's better

07/10/2009


General Motors Co. was born today, ending a 39-day bankruptcy that turned what was once the world's largest automaker into a smaller, leaner - and taxpayers hope more profitable - car company.
Through the bankruptcy, GM sold its Saturn, Saab and Hummer units and announced it would end production of Pontiac. That leaves GM with four car brands - Chevrolet, Buick, Cadillac and GMC trucks. The U.S. government now owns 61% of the new GM, which begins operation about $11 billion in debt. The United Auto Worker's pension fund owns about 17.5% of the new company, with Canada holding about 11% and the "old" GM with 10%, which is to deal with past warranty and liability issues.
Friday's announcement also included about 6,000 job cuts in the non-production areas of GM, including white collar jobs. General Motors CEO Fritz Henderson promised a leaner management structure and faster decision-making. "Today starts a new era for General Motors and everyone associated with the company," Henderson said in a statement.
"One thing we have learned from the last 100 days is that GM can move quickly and decisively," said Henderson. "Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors.
"Business as usual is over at GM," said Henderson. "Today starts a new era for General Motors and everyone associated with the company. Going forward, the new General Motors is fully committed to listening to customers, responding to consumer and market trends, and empowering the people closest to the customer to make the decisions. Our goal is to build more of the cars, trucks, and crossovers that customers want, and to get them to market faster than ever before."
They will begin that speed to market approach with fewer manufacturing jobs and fewer plants. GM said it will reduce the number plants from 47 today to 34 by the end of 2010, but said it will be at 100% of capacity at those facilities by 2011. Overall job cuts at GM will fall from 91,000 at the end of last year to 64,000 at the end of this year.
Consumer Reports has put together a fact sheet on what the new sale means to customers and how the new company will be structured.



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