Hurdles Remain For GM In Restructuring Plan
07 Ottobre 2009 - 6:17PM
Dow Jones News
General Motors Co. has not met several significant goals it
planned to achieve by year-end, including workforce reductions and
the sale of failing brands.
Chief Executive Fritz Henderson on Wednesday outlined progress
made by GM in the 90 days since it emerged from bankruptcy
protection. While GM has made strides in several key areas, the
auto maker has fallen short in others.
Henderson said GM is on track to meet cash flow and cost
reduction targets, though he didn't elaborate. GM will release
financial results for the third quarter in mid-November, he
said.
Also on schedule are plans to shrink GM's U.S. dealership
network and eliminate four money-losing brands.
The company has reduced North American production to what
Henderson said is an acceptable level, and has picked up market
share on a global basis. GM's global market share rose slightly in
the third quarter compared with the first half of this year, he
said, though the figure is still below last year.
However, GM failed to meet employee reduction targets for its
U.S. workforce. The company has about 10,000 more U.S. workers than
it planned to have by the end of 2009 after buyout programs for
hourly and salaried programs fell short. GM aimed to have 64,000
workers.
The auto maker missed a Sept. 30 goal of finalizing a deal to
sell the Hummer truck brand to a Chinese manufacturer. Henderson
said GM has made "further progress" on completing that sale.
A plan to sell Saturn to auto retailer Penske Automotive Group
(PAG) fell through after Penske failed to find a manufacturer to
build the vehicles once GM stopped, though Henderson said the
development won't hurt GM's restructuring plans.
GM also is racing to complete the sale of a majority stake in
its Opel European unit to a consortium let by Canadian parts maker
Magna International Inc. (MGA, MG.A.T). Henderson said Magna and GM
remain in concessionary talks with European labor groups.
Meantime, the company's sales have suffered in the global sales
slump, and GM lost 2 percentage points of market share in the
critical U.S. market. Henderson said the company's market share
remains slightly ahead of the conservative estimates the company
made early this year when laying out its restructuring plan.
Separately, Henderson announced that Mark LaNeve, GM's sales
chief and longtime executive, is leaving for a job at a different
company. LaNeve headed sales and marketing until Henderson
restructured the management team and put former product head Bob
Lutz in charge of marketing.
"We are knocking some of these things off and staying focused on
getting the rest of these matters behind us before the end of the
year," Henderson said on a conference call with analysts and
reporters. "We are quite confident we will come out of this with a
competitive cost structure."
Henderson faces intense pressure from GM's new chairman and the
U.S. government - the company's new majority owner - to stem the
sales slide and improve GM's financial performance.
The move to publicize its restructuring moves contrast with the
more buttoned-up strategy of Chrysler Group LLC.
Chrysler, which also reorganized in bankruptcy court and like GM
is partly owned by the U.S. government, has said little about its
recovery efforts.
However, Chrysler CEO Sergio Marchionne on Wednesday said he
will publicly release details of his five-year survival plan for
the company on Nov. 4. The briefing, to be held at Chrysler's
headquarters in Auburn Hills, Mich., will outline product plans and
the new image focus for the Chrysler, Jeep and Dodge brands.
-By Sharon Terlep, 248-204-5532; sharon.terlep@dowjones.com.