Reborn GM Vows to Rev Up as New Company

July 12, 2009
Chairman says he'll be more active than most chairmen as 'we have to pay the government back'

On July 10 a reborn General Motors pledged to drive itself to renewed profitability as the new firm emerged from bankruptcy under a government-backed plan.

"Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers," said Fritz Henderson, who remains GM president and chief executive.

"Starting today we want to take that intensity, the decisiveness and the speed of these last several weeks and then transfer it from the battlefield triage of the bankruptcy process to the day-to-day operation of the new company."

The "new GM" will be a leaner, smaller company after having shed tens of thousands of workers, eliminated or sold storied brands, shuttered scores of factories and rewritten its labor contracts to slash costs.

GM will keep four key brands -- Chevrolet, Cadillac, Buick and GMC -- and will have a total of just 34 U.S. nameplates by 2010. Several brands owned by the old GM, including Saturn, Hummer, Opel and Pontiac, have been shed or are being sold.

The chairman of the new GM is Edward Whitacre, who headed telecommunications giant AT&T. "I intend to play an active role," Whitacre said after the announcement. "I'll be more active than most chairmen," said Whitacre, who has no experience in the automobile industry but spent 18 years at the telecom giant. "I need to make sure value is created ... We have to pay the government back."

"GM is fortunate to get another shot, most likely its last one," said Michelle Krebs, an analyst with the research firm"It s biggest challenge remains the same one it has faced of late; that is, convincing consumers -- now also GM's reluctant shareholders -- that the company truly is changing and understands what type of vehicles the marketplace demands."

Sean Maher at Moody's said GM "still faces a difficult year." "The company does not expect to turn a profit in 2009 and is unlikely to do so until U.S. new vehicle sales rise substantially above their current depressed pace below 10 million per year," he added.

Copyright Agence France-Presse, 2009

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