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GM sees billions in costs disappear

Posted Monday, Jun 29, 2009, 4:27 pm in Employee News

During its reorganization, General Motors Corp. should be able to shed about $12.5 billion in annual costs—paving the way for possible profits, higher product spending and improved supplier health once U.S. vehicle sales recover to more normal levels, according to corporate documents and GM’s Bankruptcy Court filings, the Automotive News reported.

And in a better market with much-reduced vehicle capacity, GM could even eliminate almost $3,000 per vehicle in incentive spending, adding an additional $8 billion in savings when compared with the pre-bankruptcy GM, says Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., the paper reported.

The GM that will come out of Chapter 11 will need to burnish its brands to compete, the paper said. GM’s U.S. share has fallen from 22.3 percent in 2008 to 19.5 percent this year and is predicted to go as low as 18.4 percent in subsequent years, the story said. (Automotive News)
 
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