Word: gm
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Dates: during 2000-2009
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...were the Packers GM what would you do in this situation? - Nathan Henneka, Salt Lake City
Industry watchers were alarmed last week when Wagoner had to insist that the company was not considering bankruptcy. Ray Young, GM's chief financial officer, conceded that the company will post a "significant" loss when it reports its second-quarter earnings, but, he told TIME after the announcement of the latest cuts, the talk about bankruptcy was "unfortunate." He said, "It's a distraction. We wanted to dispel any concerns anyone might have. Frankly, that's just not in the cards...
...list of new cuts included the elimination of the dividend on common stock, all executive bonuses and, with the apparent approval of the United Auto Workers (UAW) union, health-care coverage for salaried retirees over the age of 65. In addition, GM plans to launch a new wave of buyouts among its 32,000 salaried employees while freezing their salaries for the remainder of 2008 and 2009. The benefit cuts and early retirements are expected to reduce GM's salary costs by 20%, saving the company $1.5 billion by the end of 2009, GM executives said...
...company's engineering and capital spending are also being cut, freezing development of new trucks and SUVs. Marketing budgets will also be trimmed, including as yet unspecified support for motorsports such as NASCAR. GM is also planning to defer a $1.7 billion payment to the special trust created last year to cover the cost of health care for retired blue-collar workers; it would also expedite the shutdown of four truck plants originally announced at the company's annual meeting in June. GM plans to raise another $4 billion to $7 billion by selling off assets like its Hummer brand...
Analysts were mostly positive. David Cole, chairman of the Center for Automotive Research, said critics have underestimated GM's resilience. "They have a lot of resources, and if they need to, they can always go back to the UAW for help," Cole said. Rod Lache, an analyst for Deutsche Bank, agreed, saying, "It looks like [GM's] cost structure is pretty competitive." But, he said, "where they're at a disadvantage versus other mass-market automakers is in pricing." Buyers won't pay as much for a GM vehicle as they will for a Toyota or Honda. GM stock dipped...