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?