Tuesday, July 15, 2008

GM CEO Promises to Restructure to Improve Company for the Long Haul. I Hope He Means It.

This morning on NPR, I heard a report from GM CEO, Rick Wagoner. GM is restructuring to try to react to tightening market conditions. Last month, the auto manufacturer announced that it was shuttering 4 assembly plants and selling off or retiring many of its truck divisions including the Hummer brand. Today, they announced that they are trying to generate over $10 BB US through cost-cutting measures that include a 20% reduction in its 40,000-strong salaried workforce and the dramatic scaling back of salaried retiree healthcare benefits.

Wagoner admitted to trying to move the company into a position where it could do more than survive the current economic downturn (though this was an immediate and tantamount concern). He also discussed wanting to position the company (through RIFs and other cost-saving measures) so that it could move quickly and decisively when conditions began showing signs of improvement. This last bit was what struck me from the interview. Given the fact that the downturn coincided with the emerging move to cap greenhouse gases and reduce the proliferation of “petrol pigs,” Wagoner was right to want to use this unfortunate time on our economic landscape to advance the company.

You can listen to the report here. You can also go to the main link (if the one provided doesn’t open up the report).