GM's Wagoner to Announce Plant Closings

[Thom Little]

General Motors Corp. Chief Executive Rick Wagoner, who said in June he would eliminate 25,000 North American manufacturing jobs by 2008, today will announce plant and parts-depot closings to reduce costs, people familiar with the plan said.

The world's largest automaker will idle or reduce operations at about nine manufacturing sites and close non-manufacturing facilities, according to the people, who asked not to be identified because the announcement hadn't been released.

``If they're not selling the cars, I don't know how they can keep running the plants,'' said Al Benchich, president of United Auto Workers Local 909 at a GM transmission factory in Warren, Michigan, who said yesterday he hadn't heard details. ``The UAW has acknowledged that GM doesn't have the market share to support its current structure.''

Wagoner is making the cuts after the Detroit-based automaker's North American operations posted $4.8 billion in losses this year. The losses have grown as competition from rivals such as Toyota Motor Corp. pushed the automaker's U.S. market share to 80-year lows. Ratings companies responded by cutting the automaker's debt to junk.




http://quote.bloomberg.com/apps/news?pid=10000006&sid=aUV3FyLGfxyk&refer=home

[Divernan]

1. GM's arrogant, unimaginative, rigid top management should go.

It is NOT that foreign competition prevents US car maufacturers from succeeding. Chrysler is doing very well, after decades of trailing GM & Ford. Ford is making the changes in model design and selection necesary to survive. But GM management remains disastrously inbred (there are old boy networks and then really incestuous old boy networks) and continues to refuse to modify their product line to meet the competition. It takes 4 to 6 years to introduce a new model - such as a fuel-efficient hybrid!- into their showrooms. Although GM has a large cash balance, it is going through it a rate that will exhaust it in about 18 months max. The GOP, wasp MBAs at GM evidently can't do that simple math, but the market can - hence the junk bond status.

I expect two moves from GM top management - most of them will bail out in the next 6 months or so, awarding themselves huge golden parachutes, and they will continue to irrationally blame all their problems on those damn foreign car manufacturers and the costs of GM's pension obligations. Pensioners will see their pension fund turned over to the already overburdened govt. pension bail out fund, and the pensioners will be lucky if they get even 1/3 of their current pension payments.

They used to say, What's good for GM is good for the country.
After 5 years of Bush, we see the ultimate example of OVERPAID & INCOMPETENT top management and similarly overpaid, incompetent Board of Director members canibalizing their own corporation, and not primarily through greed as was the case with Enron, but through their own inabilities to compete effectively in the marketplace.

[Kolesar]

2. Can you cite more details on GM management's mistakes...

...and what the "inbred" "old boy" network has done to the company? I have a great interest in what happens to GM. thanks

[Kahuna]

3. Chrysler is no longer a US manufacturer. They're German owned

and have been for several years.