[Rob Hood]

http://www.autoextremist.com/current/2008/7/8/rants-453.html

Was listening to some newsradio today - many analysts are painting a bleak picture. Heard that Hummer and Saab were going to be let go, maybe more. I've already seen where Chevy is not sponsoring several NASCAR races next year.

Rick Wagoner is supposed to deliver an announcement tomorrow morning at 0830 EST. Should be worth listening to.

This post has been edited by Rob Hood: Jul 15 2008, 05:59 AM

[trackbird]

http://money.cnn.com/2008/07/15/news/compa...dex.htm?cnn=yes

GM to cut jobs, suspend dividend
Beleaguered automaker also plans asset sales, aiming for $10 billion in 'cash improvements' by 2009. CEO Wagoner says 'difficult decisions' necessary for survival.
By Aaron Smith, CNNMoney.com staff writer
Last Updated: July 15, 2008: 9:42 AM EDT

High gas costs stall GM

NEW YORK (CNNMoney.com) -- General Motors Corp. said Tuesday it will suspend its dividend, sell off $4 billion to $7 billion worth of assets and cut 20% worth of salaried cash costs in an overall plan to save billions of dollars.

"We need to take some very tough actions to ensure our survival and success," said Chief Executive Rick Wagoner, in a press conference, referring to the current market conditions as an "unprecedently difficult time."

In an earlier broadcast to employees, Wagoner said that these were "difficult decisions," but necessary for the company to prevail in the weak economy beset by high oil prices, which he called GM's "greatest concern."

Wagoner said the cost-cutting actions should help GM generate $10 billion in "cash improvements" by the end of 2009. Overall, the company plans to beef up liquidity by $15 billion through 2009.

At the end of the first quarter, GM said it had $23.9 billion in liquidity and access to $7 billion worth of U.S. credit, which is enough funding to get through 2008. But the company said it is gathering more liquidity to protect itself from a "prolonged U.S. downturn."

"Our plan is not just a plan to survive; it's a plan to win," said Wagoner, noting that raised cash could aid the company in shifting from trucks and SUVs to more fuel efficient cars.

"Our stated goal is to become the fuel economy leader in every sector in which we participate," said Robert Lutz, GM's vice chairman of global product development.

As part of its cost-cutting, GM plans to eliminate health care coverage for U.S. salaried retirees older than 65, effective Jan. 1. Wagoner said the company will increase pensions for affected retirees and their surviving spouses to "defray the impact."

GM (GM, Fortune 500) has lost about one third of its 107,000 U.S. hourly workers since 2004. GM offered buyouts to its entire remaining U.S. hourly workforce of 74,000 in February, in a bid to unload its more experienced, higher-paid employees.

The Detroit-based automaker has been hard-hit by record-high gas prices, economic weakness, and a waning consumer interest in trucks and sport utility vehicles. The company has not made a profit since 2005.

Truck sales were down 21% in the first six months of 2008, while car sales were down 9% and Hummer sales plunged 40%. Overall, GM's vehicle sales were down 16%: worse than the industrywide vehicle sales decline of 10%.

In June, GM said it would shut four SUV and truck plants, would shift to more fuel efficient vehicles and discontinue its Hummer brand.

The stock price for GM, the world's largest automaker, has plunged 62% this year, to 50-year lows. GM shares were up 3 cents to $9.41 in premarket trading.

Despite the doom and gloom in America, GM's sales edged up in Europe by 3% in the first six months of 2008, including a 58% increase in Eastern Europe and a 60% surge in Russia. This includes a 21% increase in Russian Hummer sales.

"Frankly, we're very well positioned outside the U.S. now, and will be in [the U.S.] too, when this cycle concludes," said Wagoner.

GM is the fourth-largest American company in terms of annual sales, competing with Toyota Motor ™ and Ford Motor (F, Fortune 500).

First Published: July 15, 2008: 8:41 AM EDT