General Motors Corp. has plans of cutting about 25,000 jobs in the United States while closing assembly and component plants over the next several years.
At an annual meeting with shareholders, GM’s Chairman and CEO Rick Wagoner broke this news along with the fact that even though the company lost $1.1 billion in the first quarter, it expects to save more than twice that a year as it cuts costs.
“Let me say up front that our absolute top priority is to get our largest business unit back to profitability as soon as possible,” said Mr. Wagoner. According to Reuters,
The world’s largest automaker, whose shares were up 2.3 percent, has been closing and idling plants over the past four years, reducing its annual assembly capacity from six million vehicles in 2002 to five million by the end of this year.
A benchmark annual report on North American manufacturing operations released last week ranked GM last among leading automakers in its assembly plant capacity utilization rate.
Wagoner also discussed improvements that need to be made in the North American branch of the company. He Broke down four initiatives for re-tooling its sales and marketing strategy:
“First, we are clarifying and focusing the role of each of our eight brands, giving them distinctive, clear, compelling roles in the GM portfolio. We start with our foundation brand Chevrolet in the mainstream of the market, and Cadillac at the premium end. Both of these brands are in good shape, and we have plans to make them even stronger. Our other six brands — GMC, Pontiac, Buick, Saturn, Saab and Hummer — will focus on targeted market niches, offering distinctive, differentiated products with easy-to-grasp brand promises. In some cases, such as Pontiac and Buick, it will mean fewer but stronger entries in the future.”
“Second, we’ll go to market with a total value proposition. This means, simply, going back to selling cars and trucks on the basis of the great value that they have to offer customers, with lessening emphasis over time on incentives. It means strong product offerings at compelling prices that represent great value — like the Chevy HHR at $15,995; the Pontiac Solstice at $19,995; and the Hummer H3 at $29,500. It means improving our total value proposition by including industry leading content, features, and technology — like offering OnStar and Stabilitrak as standard equipment on all GM cars and trucks.”
“Third, we’ll focus on improving our sales performance in major metropolitan markets. Simply stated, we need to perform as well in the top 25 markets in the U.S. as we do in other parts of the country. This means strengthening our position in markets like Miami, New York, Washington, and Los Angeles.”
“Fourth, we’re accelerating our drive for consistent, world class distribution networks. This means getting our dealers on channel — Chevrolet and Saturn remaining as standalone facilities; Buick-Pontiac-GMC grouped together; Cadillac, Hummer and Saab as premium channels but in many cases under the same owner. We’ll work with our dealers to get in the right locations, with competitive facilities.”
Today in morning trading on the New York Stock Exchange, General Motors Corp. shares went up 70 cents to $31.12.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
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