GM Announces Updated Viability Plan (4/27/09)
The Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes.
The Viability Plan announced today builds on the February 17 Viability Plan submitted to the U.S. Treasury (media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewpressreldetail.do?domain=2&docid=52168). The revised Plan accelerates the timeline for a number of important actions and makes deeper cuts in several key areas of GM's operations, with the objective to make us a leaner, faster, and more customer-focused organization going forward.
Significant changes include:
- A focus on four core brands in the U.S. - Chevrolet, Cadillac, Buick and GMC - with fewer nameplates and a more competitive level of marketing support per brand.
- A more aggressive restructuring of GM's U.S. dealer organization to better focus dealer resources for improved sales and customer service.
- Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants.
- Lower structural costs, which GM North America (GMNA) projects will enable it to breakeven (on an adjusted EBIT basis) at a U.S. total industry volume of approximately 10 million vehicles, based on the pricing and share assumptions in the plan. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.
For the full press release, click here.