General Motors exited bankruptcy on July 10th, 2009 with a ‘leaner and meaner’ look that is ready to come back and fight for the American’s trust and pay back all of the taxpayers. This is a new company we are talking about, no longer is GM the oldest and best company to work for, this is a brand new company with brand new rules and a brand new look.
There are a deal signed the morning of July 10th, 2009 between the government and General Motors executives at the law from of Weil, Gotshal & Manges, which is GM’s chief bankruptcy counsel. The CEO has to say: “Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” CEO Fritz Henderson said in a statement on July 10th, 2009.
He has appreciated all of the support that GM fans and taxpayers have given them and while it might be a very hard road to earn back all of that trust, GM is willing to restructure the way they do things and really live up to the new GM name. There are plans of GM releasing 10 new vehicles in the United States and another 17 vehicles outside of the United States in the next eighteen months, which is good news.
The GM management structure that is based on the Automotive Strategy Board, which is all made up of Global Function Leaders and Regional Presidents and its Automotive Product Board will be replaced with a single and smaller-scale executive committee that will meet every single week.
This particular committee will focus on all of the business results brands, customers, products and overall – how much profit GM is going to be making. This smaller-scale committee will cut GM’s decision-making team in half and will eliminate a lot of GM’s matrix structure and while these are difficult decisions, they are ones that have to be made in order to really improve the company overall.
GM’s bankruptcy only lasted about thirty-nine days, but within those days, things were very uncertain and now GM has closed the deal on selling off some key components of the GM Company, such as Chevrolet and Cadillac to a new company that is mostly owned by the United States Treasury.
GM will also be cutting at its white-collar workforce as well, which is exactly what everyone seems to think it needs to do. They are cutting back on their white-collar labor by about 20 percent, which means eliminating another six thousand jobs by October. The reduction of the executives in rank will slice a lot deeper than most people anticipated.
Another pillar that GM is planning on launching and developing is more fuel-efficient cars and they are going to focus their energy on just a few brands and models – along with a couple of dealerships instead of expanding until they are stretched too thin. That is exactly what happened here, they stretched themselves too thin for too long and now they have been burned by about $40 billion dollars with potential losses of over $80 billion dollars.
There is news however that the new GM will be slashing their debt and healthcare obligations by about $48 billion dollars and that they have dropped almost 40 percent of their dealerships that are unprofitable. Brands like Saturn, Hummer and Saab are being cut loose and sold to other companies. The new GM is really taking the time to cut unnecessary things out of their company and that is something that will help them in the long run.
