General Motors on July 15 unveiled a fresh restructuring and cost-cutting program to battle slumping sales. The company said it plans to cut more white-collar jobs and further reduce truck production as part of a plan to improve its cash flow by $10 billion by the end of 2009.
Sales of assets and fresh borrowing will bring total liquidity improvements to $15 billion by 2009, GM said.
The automaker said it was also assuming its U.S. market share would fall to 21%, with total industry sales falling sharply to 14 million vehicles in 2008 and 2009.
"We will continue to take the steps necessary to align our business structure with the lower vehicle sales volumes and shifts in sales mix. Today's actions, combined with those of the past several years, position us not only to survive this tough period in the U.S,. but to come out of it as a lean, strong and successful company," said GM chairman and chief executive Rick Wagoner.
GM did not say how many non-union jobs it would eliminate but said it would cut its salaried employee costs by 20% through attrition, elimination of executive bonuses and health-care coverage for retired white-collar workers over 65 and other measures.
GM has already cut its U.. workforce by more that 40,000 employees as it shuttered plants in the wake of losses which have topped $54 billion since 2005.
The automaker reiterated plans to examine the potential sale of its gasoline-guzzling Hummer brand but Wagoner said GM would focus on "profit improvements" at its other brands.
GM also will cut its sales and marketing budgets, with a focus on "protecting launch products and brand advertising."
Planned increases to the engineering budget will be eliminated with spending held at 2006-2007 levels.
"These operating actions, combined with the benefits of the 2007 GM-UAW (United Auto Workers union) labor agreement, are targeted to reduce North American structural cost from $33.2 billion in 2007 to approximately $26-$27 billion in 2010, a reduction of six to seven billion," GM said.
"We hope today's actions are sufficient to get us through the downtrend but there are no guarantees," Wagoner said.
Copyright Agence France-Presse, 2008