In an SEC filing Monday, General Motors said it will cut 21,000 U.S. factory jobs by next year nad phase out its Pontiac brand (as was leaked over the weekend). This is all part of the restructuring plan GM just have in place by June 1st as part of the administration's requirements for further lifelines.
In addtion, GM said it will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of a debt-for-equity swap. Similarly, the automaker said it will ask the federal government to take 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1.
GM also anticipates reducing its U.S. dealer count from 6,246 in 2008 to 3,605 by the end of 2010, a reduction of 42%.
Additional information from GM's Monday press release:
GM will lower its breakeven point by cutting its structural costs faster and deeper than had previously been planned:
– Manufacturing: Consistent with the mandate to accelerate restructuring, we plan to reduce the total number of assembly, powertrain, and stamping plants in the U.S. from 47 in 2008 to 34 by the end of 2010, a reduction of 28 percent, and to 31 by 2012. This would reflect the planned acceleration of six plant idling/closures from the February 17 plan, and one additional plant idling. Throughout this transition, GM will continue to implement its flexible global manufacturing strategy (GMS), which allows multiple body styles and architectures to be built in one plant. This enables GM to use its capital more efficiently, increase capacity utilization, and respond more quickly to market shifts.
– Employment: U.S. hourly employment levels are projected to be reduced from about 61,000 in 2008 to 40,000 in 2010, a 34% reduction, and level off at about 38,000 starting in 2011. This further planned reduction of an additional 7,000 to 8,000 employees from the February 17 Plan is primarily the result of the previously discussed operational efficiencies, nameplate reductions, and plant closings. GM also anticipates a further decline in salaried and executive employment as it continues to assess its structure and execute the Viability Plan. More details will be announced as soon as they are finalized with the various stakeholders.
– Labor costs: The Viability Plan assumes a reduction of U.S. hourly labor costs from $7.6 billion in 2008 to $5 billion in 2010, a 34 percent reduction. GM will continue to work with its UAW partners to accomplish this through a reduction in total U.S. hourly employment as well as through modifications in the collective bargaining agreement.
Besides Pontiac, the press release notes "the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest." Resolution, of course, could mean a sale to another automaker, or dissolution of the brand.
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