Rick Wagoner's Mystical Magical Plan to Save GM

Frank Williams
by Frank Williams
rick wagoners mystical magical plan to save gm

GM just sent out a press release outlining "further steps" they taking "to adapt its business to rapidly changing market conditions." The high points of Rick Wagoner's plan include:

∙ Reduction of salaried workforce via attrition and "other separation tools."

∙ Eliminating "annual discretionary cash bonuses for the company's executive group in 2008… For the company's top executive officers, it represents a reduction in their cash compensation opportunity of 75 to 84 percent. "

∙ Making "additional structural cost reductions… achieved through further adjustments in truck capacity and related component, stamping and powertrain capacity."

∙ "Revising its capital spending plan and reducing approximately $1.5 billion in expenditures versus prior plans… A major part of the reductions is related to the delay of the next generation large pickup and SUV program, as well as V-8 engine development and associated capacity."

∙ "Improv(ing) working capital…primarily related to the reduction of raw material, work-in-progress and finished goods inventory levels as well as lean inventory practices at parts warehouses."

∙ "Defer(ing) approximately $1.7 billion of payments that had been scheduled to be made to a temporary asset account over the balance of 2008 and 2009 for the establishment of the new UAW VEBA."

∙ "The GM Board of Directors has decided to suspend future dividends on common stock, effective immediately, which is expected to improve liquidity by approximately $800 million through 2009."

∙ "Undertaking a broad global assessment of its assets for possible sale or monetization."

∙ "Opportunistically access(ing) global markets to raise additional liquidity"

"The actions announced today are difficult decisions, but necessary to respond to the current auto market conditions," said Wagoner. "Even under conservative planning scenarios, GM is well-positioned to withstand the U.S. market downturn and emerge a stronger company. We have a solid position in the rapidly growing emerging markets, a global operating framework that allows us to respond to changes in the U.S. market, a commitment to technology leadership, and an ever stronger and competitive product line-up."

Click here for PDF of full press release

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  • Johnson Johnson on Jul 16, 2008
    gamper: I personally dont know where the magic wells are, but I am sure GM has a team of overpaid execs looking for the next big cash infusion, if needed. You just did a great job at contradicting yourself. If you "don't know where the magic wells are" ... then you *certainly* DON'T KNOW for sure that GM has a source where they can obtain a big cash infusion.

  • Lynn Ellsworth Lynn Ellsworth on Jul 16, 2008

    I have learned a lot about car history, bankruptcy laws, have enjoyed the speculations, and suggestions on TTAC. Many of you have suggested that GM should reduce its brands but have pointed out that the dealers for eliminated brands sue. But apparently if GM sells instead of eliminating a brand (possibly Hummer and Saab) the dealers can't sue. Is this true? Could GM sell the Pontiac brand to say the Mattel Toy Company and not face dealer lawsuits?

  • Jkross22 That's a great looking shifter. Reminds me of the old school late 70s BMW manual - BTW TTAC, that would be a cool article to run - Best looking shifters in the last 30 years. My vote:Audi gated shifter from the R8. Should've offered that on every RS model and let people special order.
  • Ajla Maybe they should not have released several special edition Broncos when they couldn't even get regular trim orders out within a year?I'm not sure who is in charge of Ford's production but they deserve to be very fired.
  • ToolGuy "Removing them saved 16 pounds, according to Dodge. Snazzy optional two-piece lightweight carbon fiber wheels are also part of an overall SlimFast program shedding 157 pounds compared to a Challenger SRT Hellcat Redeye Widebody."From a different writeup: "The Dodge Challenger SRT Demon 170 shaves weight with the addition of lightweight front brakes, hollow sway bars, passenger and rear seat delete, trunk trim, noise, vibration, harshness pad delete, and lightweight interior carpet with a minimal audio system."• Did Dodge consider any lightweighting efforts with the lead-acid starter battery? Because Group 94 LiFePO4 saves 35 pounds of mass vs. standard lead-acid.(If Dodge already did this, Old Guy apologizes for being mired in the past and slinks back to his cave.)
  • Mattwc1 I grew up as a Datsun/Nissan fanboy. I cringed when the lineup (early to mid 2000’s) was a large amorphous blob of uninspired design. However, I think Nissan is starting to turn the corner in design and engineering. Let’s face it, the Rogue is the moneymaker for Nissan and as such it is well positioned in the market. I like the refreshed Sentra, Frontier, Pathfinder. I bought my daughter a Kicks to replace her trusty but rusty Vibe for a very good price.She essentially wanted the Vibe features in a newer packNow if they could do something about the public perception of the Altima driver…..
  • ToolGuy Dear EV Manufacturer,I tend to accumulate multiple vehicles and hang onto them longer than most people. In the future it is extremely likely that I will own multiple electric vehicles which occasionally sit for some period of time without being driven much. On the EV's that I acquire, I would appreciate the following feature:• 'Battery Maintenance Mode' where I can keep the vehicle plugged into a source of power and it maintains the battery at an ideal state of charge for 'long-term' storage (40%? 50%? 60%? Probably not 80% and certainly not "100%")• Also in this mode it would automatically perform cell balancing and whatever the equivalent of desulfation is for the relevant battery chemistry. If it can advise me the human owner that it needs to be 'exercised' every 60 days or whatever, that would also be appreciated.• Once this mode is selected, we need it to *stay* in that mode regardless of power outages, resets, over-the-air updates which I didn't request, etc. If anything software-related kicks it out of Battery Maintenance Mode and it reverts to nervous-nellie-range-anxiety-i-can't-move-the-vehicle-3-meters-if-it-isn't-completely-fully-charged-to-100%-let's-destroy-this-battery-RIGHT-away Mode, that's no good. (A physical switch would do this -- and a rotary switch would look cool.)Yours in Saving the Planet (and my wallet), ToolGuy