GM's Extreme Cost Cutting Makeover: Turn Out the Lights

John Horner
by John Horner
gm s extreme cost cutting makeover turn out the lights

BusinessWeek tells us that “cash is getting so tight at General Motors (GM) that management has launched another wave of cost-cutting. The company is even scrutinizing the electricity bills.” Just how much cost cutting is left to be done by these serial-cost-cutters? Yet more new vehicle programs are being delayed, with “sources” saying the Cruze has been put off until 2011 and the next generation Malibu pushed into 2013. BusinessWeek is even using the naughtiest word: bankruptcy: “The delays will save precious cash at a time when analysts say bankruptcy is a real possibility.” How bad is it? “GM is also looking at more miserly ways to save money. The company has told engineers and product development staff at its sprawling technical center north of Detroit to turn the thermostats down to 66 degrees and turn lights off after hours.” Nothing boosts productivity of the development staff like keeping it cold enough to discourage naps. But with critical programs delayed, what exactly is there for these well chilled engineers to do? Somehow survive until 2010, that’s what: “These are tough decisions, but the company has to save cash to stay out of bankruptcy in hopes of making it until 2010. By then, concessions in a new labor contract with the United Auto Workers will kick in, saving several billion dollars annually.” Are they really still hanging onto the old saw about UAW contracts being GM’s biggest problem?

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4 of 31 comments
  • Mikey Mikey on Oct 24, 2008

    jkross22 Thank you I was just reading the Black Friday piece.The text and the comments certainly put things in the right perspective. Its like the guy bellyaching cause he has got any shoes.Then he comes across a guy with no feet.

  • John Horner John Horner on Oct 24, 2008

    @mikey, I hear your pain. If management can't lead by example, it can't lead at all. I am royally chapped that the MBAs of our country have taken us right into the iceberg, full speed ahead. This is the U.S. Unsinkable they say. Damn.

  • Joeaverage Joeaverage on Oct 25, 2008

    Is GM typical for US companies? I was talking to a friend who works for a university and they are terribly wasteful. Whole buildings of hallways lights on 24/7/365. We're told by our IT department to be sure and leave our computers on all the time. The lab and classroom computers on ALL of the time. Hard drives that never spindown. Monitors that go to screensaver only. Printers on all the time. No wonder they are hurting after the state has cut their budget another couple million bucks.

  • Thetopdog Thetopdog on Oct 25, 2008

    joeaverage : Leaving lights on is so far down the list of wasteful things companies do that it shouldn't even warrant mentioning. There are flights from Boston to Philadelphia weekday mornings (approximately a one-hour flight) that cost $1200 for a roundtrip on US Airways. These flights are mostly taken by businesspeople that need to be in Philadelphia or New Jersey that day for meetings, and usually expense the cost. Since most people on these flights are not paying for the flight out of their own pocket, US Airways is free to charge many times what the flight should cost. The same flight on Delta is about $600 for a round trip.