GM CEO: "Business As Usual Is Over"

Automaker Makes Quick Exit from Bankruptcy; CEO Says Company Will Repay Taxpayers Ahead of Deadline

(CBS/AP)  Updated 7:25 p.m. ET

General Motors completed an unusually quick exit from bankruptcy protection on Friday with ambitions of making money and building cars people are eager to buy.

Once the world's largest and most powerful automaker, new GM is now leaner, cleansed of massive debt and burdensome contracts that would have sunk it without federal loans.

But GM, whose 40 days under court supervision was far shorter than anyone predicted, faces the worst auto sales slump in a quarter-century.

At a news conference, CEO Fritz Henderson said the revamped automaker will be faster and more responsive to customers than the old one. It will generate cash and repay billions in government loans ahead of a 2015 deadline.

"As of today, business as usual is over at General Motors," Henderson said, adding that everyone at the company "must be prepared to change, and fast."

The new company will build more cars and trucks that consumers want and launch them faster than in the past, the CEO said. GM also announced a partnership with eBay Inc. to test auctioning vehicles online.

"We recognize that we've been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done," he said.

Known for its sluggish decision-making process and bloated management ranks, GM will create a single, eight-member executive committee to speed up day-to-day decision-making, replacing two senior leadership forums.

Henderson, 50, said General Motors Corp. will streamline its bureaucratic management structure, cutting U.S. salaried employment by 20 percent, or 6,150 positions, by the end of 2009. The cuts include 450 executive jobs.

Up to 14,000 hourly workers may also be let go and of its 6,000 dealerships, 2,300 may close, CBS News correspondent Dean Reynolds reports. The company still employs 88,000 people in the U.S. and 235,000 worldwide.

Henderson, who was promoted to chief executive in March, will run the global company and oversee its North American operations. GM's former chief operating officer, Henderson was chosen when President Barack Obama said former CEO Rick Wagoner's restructuring plans didn't go far enough.

Top executives at the new company will focus on business results, new vehicles, brands and consumers.

Bob Lutz, a legendary industry executive, was "unretiring" to become a vice chairman responsible for creative elements of products, marketing and customer relationships, Henderson said. Lutz, 77, had previously planned to retire at the end of the year after more than four decades in the auto business.

Nick Reilly, who has served as GM's Asia-Pacific president, will become executive vice president of GM's international operations based in Shanghai, China.

The new company will focus on customers, cars and culture.

"If we don't get this right, nothing else is going to work," Henderson said at GM's Downtown Detroit headquarters.

Reynolds reports that in the midst of the company's catastrophic decline comes a glimmer of hope in the shape of the new 2010 Camaro - 9,300 of the muscle cars were sold in June - better than etiher the entire Buick of Cadillac lines did. GM is selling more of these Camaros than they can make. They are working overtime to produce them and buyers still have to wait six weeks to get them.

The automaker is launching a "Tell Fritz" Web site to allow owners and the public to share their concerns with senior management, and Henderson plans to go out on the road every month.

He said GM will partner with eBay in California to allow consumers to bid on vehicles just as they would in a typical eBay auction. They could also choose a "Buy it Now" option in an experiment to make car shopping easier. Dealers would still distribute the cars.

"As a culture, General Motors needs to be prepared to experiment and adjust," he said.

New Chairman Edward Whitacre Jr. said GM's trip through bankruptcy protection had been extremely challenging. "There have been a lot of long hours, there have been a shuttering of plants, there have been painful layoffs."

Whitacre told reporters after the news conference he expected to have GM's new 13-member board in place in about three weeks.

GM, in a viability plan presented to the government, said it would break even before interest and taxes next year, and be slightly above break-even for 2011 on a pretax basis.

"Sitting here today, I don't have any reason to disbelieve those numbers," Henderson said, giving no details of when the company would make a net profit.

The company's logo will remain blue with white underlined GM letters, although the company had considered changing the background to green to symbolize an environmental focus. GM has no plans to change the background, Henderson said.

He said the U.S. government, which owns a majority stake in GM, has vowed that it would not get involved in day-to-day decisions.

The Treasury Department released a statement Friday afternoon crediting GM's restructuring with saving both the automaker and "tens of thousands" of American jobs.

"The hard work of charting a path to viability now rests with GM's board and management," Treasury said in its statement. "But we are confident that we remain on track to ultimately see returns on these taxpayer investments."

Michigan Gov. Jennifer Granholm praised the White House for salvaging GM, and hailed the automaker's fresh start for the country's manufacturing sector. Appearing on CBS' "The Early Show," Granholm added that if GM had failed, the effects would have been "devastating."

GM received $19 billion to $20 billion more in federal aid on Friday, the remainder of the $50 billion it will receive, Henderson said. A large part of the money will be held in escrow.

Turning a profit will not be easy. GM has piled up losses and survives only because of government loans.

Besides the U.S. government's 61 percent controlling interest, the United Auto Workers union gets a 17.5 percent stake of the company through its retiree health care trust, and the Canadian government will control 11.7 percent. The remaining shares went to bondholders of the old company.

Concessions made by the United Auto Workers union just before the company entered bankruptcy protection have brought GM's labor costs down to where they are fully competitive with Toyota Motor Corp., Henderson said.

The parts of GM not moving to the new company will become part of "old GM," a collection of assets and liabilities that will be sold to pay creditors.

[sjc_1]

I looks like some people are starting to consider GM if they want to buy a new car. The Camaro is getting a lot of interest, it has 300 hp and still gets 20 mpg combined starting at $22K.

[babooph]

Labor was outsourced for management scam profits-looks like management should have been outsourced,the communists are not bankrupt& do not need those massive CEO salaries.Wow US management WORSE than communists-the propaganda system is VERY quiet on this one.

[andylance1]

How can someone change the corporate culture of GM when they have been part of it since 1984? They desperately need new blood at the top.

Henderson bought Daewoo for $251 million dollars. This resulted in the Chevy Aveo, which is the worst piece of spit ever produced by GM with lousy seats, fit and finish and the cheapest sounding radio made in the last 20 years. It is only slightly better than the Yugo.

If GM doesn't replace Henderson with someone better from outside of the corporate culture - it is doomed.

[eightsigma]

Did you compare a recent Aveo with a Honda Fit?

[thgdriver]

Who voted overwhelmingly for Nobama? Ans. The UAW did. Who's aiss is Nobama trying to save? Ans. The UAW.

Who ruined Chrysler/GM in the first place with wage/benefit contracts other workers would die for? Ans. The UAW.

Change you can believe in? Looks like politics as usual to me.

[eightsigma]

Have you rented a Malibu lately? Try it and compare with an Accord.

[dprice123-2009]

A new "GM" with the same old management.

[hungry1968-16]

Same management, same business practices, selling the same vehicles that people don't want, that are unreliable, and more expensive than their "foreign" counterparts that are built in America, by Americans.

And they expect a different result?!?!

Seriously?!?!

[eightsigma]

Not true.

[tiktin]

The "new" GM? Emerges from bankruptcy a few days after they went in? As far as I can see, they have the same management and the same unions. The only difference is that the government now controls the board of directors. What a joke.

[eightsigma]

"The only difference is that the government now controls the board of directors."

If they fail, I'll be the first to say you were right. If it works, I expect you to acknowledge the value of government intervention.

[darthcheney345]

by imprisonrove July 11, 2009 4:42 AM PDT
Wasssamatta, losers? afraid GM will be a viable company again??
------------

No, we're afraid your communist messiah the almighty Pelosi will keep robbing billions of dollars out of our pockets and stuffing it into the pockets of the ultra wealthy crooks who ran GM into the ground in the first place.

The now-famous Obama reverse accountability policy. Reward failure, and steal from the people to give to the rich. Thus making us all poor.

Obama hates the common people. Obama hates the worker, which is why he rewarded GM with $30 billion to keep sending more jobs out of the USA.

Obama is our enemy.

Obama is the worst president in 100 years.

It's Christmas in July for the GOP in 2012.

Obama is making the GOP look good.

[nextgenman09]

You sound bitter because America kicked the nutball GOrPse to the curb. The stench of the rotting RINO GOrPse is satisfying.

[darthcheney345]

***** TROLL ALERT TROLL ALERT TROLL ALERT *****
nextgenman09 is a partisan troll. nextgenman09 is not capable of anything except taunting, name calling, jeering, sneering, profanity, and obscenities, without contributing any facts or ideas to the discussion. Ignore all posts from nextgenman09.

[eightsigma]

"Basically, they're pushing this useless gas guzzling vehicle, like they pushed their USEFUL gas guzzling SUV's."

They don't "push" anything. All they want to do is sell profitable cars. Their problem has been too much short-term thinking... a problem all too common with public companies these days.

[hungry1968-16]

They can sell profitable cars, if they ever decide to start making reliable, fuel efficient vehicles - like Honda does with the Accord or Civic, or Toyota does with the Corolla or Camry.

I'm a union guy, and I'm all for supporting unions, but I'm also a smart consumer. I'm not going to plunk down tens of thousands of dollars for a vehicle that's not going to last as long, as an equally priced vehicle.

And as much as I am a union guy, I'm also an "America First" guy. So why would I buy a Ford or Chrysler which are building their cars in Mexico, while Honda's and Toyota's are being built in America, by Americans?

[darthcheney345]

why would I buy a Ford or Chrysler which are building their cars in Mexico, while Honda's and Toyota's are being built in America, by Americans?
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hungry, you convinced me!

From now on, it's buy Made in USA for me.

Nothing but Toyotas!!!

[hungry1968-16]

"Business As Usual Is Over"






They're counting on, (relying on?), the all new 2010 Camaro to get them out of the hole they dug themselves into.

A $30,000, two door, gas guzzling sedan, that doesn't seat a family comfortably, can't haul any cargo bigger than two grocery bags, and gets 16 MPG.

Basically, they're pushing this useless gas guzzling vehicle, like they pushed their USEFUL gas guzzling SUV's.

Good luck with that.