GM: No Cut Left Behind

Edward Niedermeyer
by Edward Niedermeyer

GM is doing whatever it can to tame its cash conflagration this week, as it seeks to survive another few weeks and prove to congress that it’s serious about shaping up. The Wall Street Journal reports that these efforts have crossed over from the sublime to the ridiculous (always closer than they seem), as everything from clock maintenance to escalator operation budgets are being slashed to save cash. So just how tight is GM cinching its belt? GM is eliminating clock maintenance, stopping RenCen escalator operation at 7pm, eliminating voice mail at plants, buying cheaper pencils, and next year it will reduce its press fleet and cancel its “Mark of Excellence” dealer award. Worst of all? “At GM’s metal-fabricating plant in Grand Blanc, Mich., Steve Bean, a union committeeman, said he recently had to tell workers they would have to wait until at least next year to get $270 stipends they were promised in order to buy T-shirts, hats or coats emblazoned with their union local.” On a more… significant front, Bloomberg reports that GM will seek to reduce its $43b in debt and renegotiate elements of its 2007 UAW contract as part of its restructuring plan which is due to Congress on December 2. Should GM exchange debt at levels less than the original value, Standard and Poors would consider those issues in default while not necessarily cutting the automaker’s overall debt rating, according to S&P analyst Robert Schulz. “A financial restructuring, along with government loans, is an alternative to bankruptcy,” says Schulz. “It doesn’t fix the economic environment, though, and it’s the economic conditions that are causing their cash burn.”

Edward Niedermeyer
Edward Niedermeyer

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  • Anonymous Anonymous on Nov 24, 2008

    1st Why is GM paying a $270 stipend per worker for clothing emblazoned with union logos? Given how much the employees pay the union, I would think the union could fork over a few bucks per employee for T-shirts with the union logo. And, $270 will buy a heck of a lot of T-shirts. 2nd The economic conditions aren't responsible for GMs condition. That's just GM's latest excuse for their complete and utter failure in the market place over the past decade. As we have been discussing on this site for several years, GM's inability to make desirable, profitable cars is the reason for their current condition. If it were the economy, wouldn't all car makers be circling the toilet bowl?

  • Yankinwaoz Yankinwaoz on Nov 24, 2008

    $270 per worker for logo shirts and caps?!?! Wow! I read it as $270 per local, which sounded like a reasonable amount.

  • EJ_San_Fran EJ_San_Fran on Nov 24, 2008

    How about slashing all salaries in half? Sounds drastic, but I've been involved with a Silicon Valley company, that did just that to survive. Did the employees complain? Sure, but they were glad to keep their jobs...

  • Ttilley Ttilley on Nov 24, 2008
    “At GM’s metal-fabricating plant in Grand Blanc, Mich., Steve Bean, a union committeeman, said he recently had to tell workers they would have to wait until at least next year to get $270 stipends they were promised in order to buy T-shirts, hats or coats emblazoned with their union local.” Perhaps the Local could provide the stipend...?
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