GM Submits Viability Plan To Treasury

Over the past two months, GM teams have been working with key stakeholders to refine our viability plan and meet the requirements of our U.S. government loan agreements. Our updated plan documents the significant further progress that we’ve made since our 12/2/2008 submission in our efforts to further enhance our operating competitiveness, now on a global basis, as well as to demonstrate that General Motors can be viable over the long term.

Here are the highlits of the GM Viability plan. You can read the entire Viability plan at the website of General Motors here (pdf).

GM’s Viability Plan details a return to sustainable profitability in 24 months

o Demonstrates GM‘s viability under conservative economic assumptions
o Expands and accelerates the Plan submitted on December 2
o Lowers the Company‘s breakeven to a U.S. market of 11.5-12.0M units annually

GM is comprehensively transforming its business, globally

o Brands, nameplates and dealer networks streamlined and focused
o Productivity and flexibility gains enabling more facility consolidations
o Shared global vehicle architectures creating substantial cost savings
o Unprofitable foreign operations addressed

GM’s Plan emphasizes the Company’s continued focus on great products

o ―Fewer, better‖ vehicles in U.S. supporting Chevrolet, Cadillac, Buick and GMC
o Renewed commitment to lead in fuel efficiency, hybrids, advanced propulsion
o All major U.S. introductions in 2009-2014 are high-mileage cars and crossovers

GM’s Viability Plan calls for considerable sacrifice from all stakeholders
o Bondholders and other debtors
o Hourly and salaried employees, executives and retirees
o Dealers and suppliers
o Shareholders

GM’s Viability Plan addresses the requirements of the loan agreement with the United States Department of the Treasury

o Competitive product mix and cost structure
o Compliance with Federal fuel efficiency and emissions requirements
o Domestic manufacturer of advanced technology vehicles
o Rationalization of costs, capitalization and capacity
o Major progress made with the UAW and hourly employees; considerable progress made with bondholders; additional work under way to achieve term sheet requirements and savings targets
o Positive net present value (NPV)
o Repayment of Federal loans

Reflecting further deterioration in economic, industry and credit markets since December 2, GM’s Plan details need for additional Federal funding

o Restructuring actions accelerated to mitigate this need
o Partial repayment of Federal funding still slated to begin in 2012

General Motors is vital to a robust U.S. economy, and a revitalized GM will greatly advance America’s technology leadership and energy independence

o Highly focused on a U.S. supply base and U.S. R&D, design and engineering
o Directly and indirectly supports 1.3 million U.S. jobs
o Committed to investing in advanced technologies and high-tech ―green‖ jobs
o A sound investment for U.S. taxpayers that will be repaid fully.

Finally, GM's viability plan submitted today discusses the issue of bankruptcy as a potential option for restructuring, concluding it would be a highly risky, extremely costly and time-consuming process. This reaffirms management's position that bankruptcy is not in the best interests of GM or its stakeholders. The overriding risks are the significant impact a bankruptcy would have on the company's revenue stream and the resulting huge debtor-in-possession funding support that would be required from the government, as such funding is not available from traditional sources in today's market conditions. Accordingly, accomplishing GM's restructuring out of court remains by far the best approach for all constituents.

"Our viability plan requires significant sacrifices from all GM stakeholders: management, employees, unions, suppliers, dealers, investors and bondholders," Wagoner said. "But these are the kind of actions we need to take to survive the current industry crisis, and position GM for sustainability and success. This plan, in effect, signifies the reinvention of General Motors for the 21st century. We are working non-stop to put this plan into action, and we greatly appreciate the support and encouragement we continue to receive as we take these important steps toward viability. "

GM's leadership team will continue to work with its key stakeholders and the newly formed Presidential Task Force on Autos as it proceeds with its restructuring. In accordance with the loan agreement, GM will submit its second progress report to the U.S. Treasury on March 31. This progress report will be the basis for the Task Force to issue a 'Plan Completion Certificate' to Congress, which confirms GM's long-term viability.

By General Motors Inc