General Motors (GM) Announces Plans To Bolster Liquidity; Suspends Dividend, More Salaried Job Cuts
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General Motors Corp. (NYSE: GM) announced adapt its business to rapidly changing market conditions. GM said it is taking additional measures to bolster liquidity by $15 billion to protect against a prolonged U.S. downturn.
GM Plans to:
- Further salaried headcount reductions in the U.S. and Canada in the 2008 calendar year. These benefit changes, salaried headcount reductions and other related savings will result in an estimated reduction in cash costs of more than 20 percent, or $1.5 billion in 2009.
- Additional structural cost reductions of approximately $2.5 billion are expected in GM North America (GMNA). The reductions will be partially achieved through further adjustments in truck capacity and related component, stamping and powertrain capacity in response to lower U.S. industry volume.
- GM is revising its capital spending plan and reducing approximately $1.5 billion in expenditures versus prior plans.
- Aggressive actions are being taken to improve working capital by approximately $2 billion in North America and Europe, primarily related to the reduction of raw material, work-in-progress and finished goods inventory levels as well as lean inventory practices at parts warehouses.
- GM will defer approximately $1.7 billion of payments that had been scheduled to be made to a temporary asset account over the balance of 2008 and 2009 for the establishment of the new UAW VEBA.
- The GM Board of Directors has decided to suspend future dividends on common stock, effective immediately, which is expected to improve liquidity by approximately $800 million through 2009.
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abcadams1@aol.com
Carla on Jul 15, 2008 03:58 PMGM has over 90% of its white collar management workers made up of white men. Having only white men in management can result in a greater loss of fresh ideas and perspective coming from diversity (American-Americans, Women, and Latinos). Also, GM pays its white men in management positions about 40% more than they need to. If they had more of a diverse workforce, this would open up the pool of candidates and GM could pay less plus have greater creative ideas to build business. Also, with 85% of women making the car purchasing decisions, diversity will help discover women's buying needs. A must buyer to please for GM.