Topic: GM again. News conference at 08:30 Tuesday

[tpl]

from Reuters



DETROIT (Reuters) - General Motors Corp <GM.N> Chief Executive Rick Wagoner is slated to announce the automaker's second major restructuring package in six weeks on Tuesday as the company looks to cut costs and win back investor confidence in the face of slumping sales.

The cost-cutting will include widespread job cuts for white-collar workers, including engineers assigned to now-frozen efforts to develop GM's next generation of full-size SUVs and pickup trucks, people familiar with the plans said.

Analysts also expect GM to unveil a shake-up of its product portfolio to reflect steps intended to make the line-up more competitive on fuel efficiency.

In addition, GM is expected to detail steps to conserve cash -- including possibly eliminating dividend payments -- as it prepares to raise capital to carry it into 2010 when it will begin to capture large savings from a contract reached last year with the United Auto Workers union, analysts have said.

Shares of GM bounced higher by as much as 5 percent in after-hours trade after the news. The stock has lost about 63 percent since the start of the year.
...
full story

http://fresh.bnn.ca/reuters_story.aspx?story=2008-07-14T233359Z_01_N14464244_RTRIDST_0_BUSINESS-GM-COL.XML

[gta_driver]

I have a bad feeling that a good portion of GM CREC (powertrain engineering mostly for trucks and SUV's in recent years) in Oshawa will be shut down. Someone told me a lot of the work the engineers do there is being handed off to offshore engineers in China and India who are much cheaper to employ.

[initial_D]

5% increase in stock price in anticipation of of more cuts ... 

[Dante]

I have a bad feeling that a good portion of GM CREC (powertrain engineering mostly for trucks and SUV's in recent years) in Oshawa will be shut down. Someone told me a lot of the work the engineers do there is being handed off to offshore engineers in China and India who are much cheaper to employ.

This is scary. Outsourcing looks good on the paper for the bean counters, but it could go sour easily. First-hand experience...

[Mitlov]

I have a bad feeling that a good portion of GM CREC (powertrain engineering mostly for trucks and SUV's in recent years) in Oshawa will be shut down. Someone told me a lot of the work the engineers do there is being handed off to offshore engineers in China and India who are much cheaper to employ.

This is scary. Outsourcing looks good on the paper for the bean counters, but it could go sour easily. First-hand experience...

Except that GM has some really great engineers and designers in China already (Buick China).  So it's not like they'd be handing off the operation to a bunch of noobs, I assume.

[sailor723]

5% increase in stock price in anticipation of of more cuts ... 

Nope....5% increase in stock price in anticipation that GM's chances of survival may improve.

[inco]

The deed must be done. GM, in order to survive, has to make some drastic changes and while what they announce today will be painfull to many, it's a short term fix for the bigger problems.

When they get serious about taking on the existing structure and remaking it then the market will know they are commited and will respond much more.  We all know what they need to do and let's hope they do it. As bad as it looks and is, they have to change.

[inco]

One giant step for mankind? Guess not. Read on.

http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20080714/AUTO01/807140376/1148

[Triple Bob]

I have a bad feeling that a good portion of GM CREC (powertrain engineering mostly for trucks and SUV's in recent years) in Oshawa will be shut down. Someone told me a lot of the work the engineers do there is being handed off to offshore engineers in China and India who are much cheaper to employ.

This is scary. Outsourcing looks good on the paper for the bean counters, but it could go sour easily. First-hand experience...

Outsourcing can also work very well, we have some great people out in India who are very qualified and very cheap (relatively).

[Trainman]

What bothers me about this is contained here: "General Motors said Tuesday it will reduce its white-collar workforce, suspend its dividend, reduce spending on marketing and make more production cutbacks."  (Source: http://www.cbc.ca/money/story/2008/07/15/moregmcuts.html )

As someone who runs their own business, I know the last thing you are supposed to cut is marketing.  This is a sign of either extreme stupidity within the GM executive ranks or a true last gasp desperate measure to stave off bankruptcy.  You can not expect to sell much if your potential customers do not know what you sell.

[wing]

Yeah but GM probably spends 10 bazillion dollars on marketting they can cut a little.

[Dante]

I have a bad feeling that a good portion of GM CREC (powertrain engineering mostly for trucks and SUV's in recent years) in Oshawa will be shut down. Someone told me a lot of the work the engineers do there is being handed off to offshore engineers in China and India who are much cheaper to employ.

This is scary. Outsourcing looks good on the paper for the bean counters, but it could go sour easily. First-hand experience...

Outsourcing can also work very well, we have some great people out in India who are very qualified and very cheap (relatively).

Agreed. But things could go either way so the risk is there (50%-50% chances). And this is not because India or China doesn't have qualified engineers, but more about managing the process. I only hope their internal (GM) struggles, if they happen, would not significantly impact the final product.

[initial_D]

http://money.cnn.com/2008/07/15/news/companies/GM/?postversion=2008071511

NEW YORK (CNNMoney.com) -- General Motors Corp. said Tuesday it will suspend its dividend, sell off $4 billion to $7 billion worth of assets and cut 20% worth of salaried cash costs in an overall plan to save billions of dollars.

...

20% sounds like a lot of jobs.

[Dante]

Looking at the product pipeline, I don't see any word about a Chevy B-car, nor new models for other brands but Cadillac and Chevy.
Plus, the new important Chevy models (Cruze and Equinox) are kind of far away.

[Dante]

Maximum Bob just answered my question: no B-car for Chevy. 

Also the Insignia will not make the trip here. I wonder if the same apply to the other Opels. I guess it does ...

[Leviathan]

Looking at the product pipeline, I don't see any word about a Chevy B-car

I thought one of those 3 cars you could vote on was going in to production. Ah, this article says it is the Beat:
 

A city car
The production model, set to hit the market in mid-2009, will first be available outside of North America. The Beat will retain the concept's compact size and make use of a fuel-efficient, small-displacement engine.

[Dante]

Looking at the product pipeline, I don't see any word about a Chevy B-car

I thought one of those 3 cars you could vote on was going in to production. Ah, this article says it is the Beat:
 

A city car
The production model, set to hit the market in mid-2009, will first be available outside of North America. The Beat will retain the concept's compact size and make use of a fuel-efficient, small-displacement engine.

Yep, but Bob said today no-Beat for North America (check out the riot at Autoblog on the subject).

[safristi]

CNN Money report seems ta think Waggoner is just "BEAT'in" IT  and he hasn't addressed the meat of the problem.................."waggoner expects GM's share to remain at 21% !!!...he expects OIL to stay at 130 to $150 !!!....he expects 2 billion off what would be termed "Fat" why was that not trimmed years ago....!!!!

[tpl]

Rather than re-engineer all its world cars to meet NA standards it might be cheaper to buy 51 senators and 230 (?) congresscritters to make the US rules the same as the world rules... assuming that they'd stay bought of course.

[ArticSteve]

So as it turns its not the asian car makers who will bring down Detroit (although they are delighted to pick up the pieces), but rather a tall weirdo guy named Bin Laden who used to be an associate of the CIA.  That's better than Hollywood could do. 

Bin Laden flukes a 3 pointer against the USA (twin towers).  Americans just happen to elect the first idiot as President who also doubles as a thug and a pathological lier.  Thug and associates then devise a scheme to take over Iraq's oil.  American public living the good life after 8 years of stable government and high growth say sure; "attack who you want, no skin off our *sses".  Thug and associates cut taxes, encourage corruption in the domestic financial markets, and bungle the war.

Result:  The Perfect Storm for Detroit; doubling of oil with all it's obvious consequences for a nation that consumes 40% of world production and ZERO market liquidity (no loans to shaky industries).