DETROIT, July 10, 2009
GM CEO: "Business As Usual Is Over"
Automaker Makes Quick Exit from Bankruptcy; CEO Says Company Will Repay Taxpayers Ahead of Deadline
-
General Motors Corp. CEO Fritz Henderson addresses the media during a news conference at the company's headquarters in Detroit, July 10, 2009. (AP Photo/Carlos Osorio)
-
Play CBS Video Video A Comeback For GM? The road is all clear for General Motors to emerge from bankruptcy in record time. Sixty percent of the GM is now owned by the federal government. Dean Reynolds reports from Detroit, Michigan.
-
Video GM Turns To New Direction General Motors has returned from a 40-day bankruptcy period with a new outlook towards the future. As Dean Reynolds reports, the company's leaders view this restart as a "second chance in life."
-
Timeline General Motors A look at major dates in the history of the now-troubled auto company
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.
© MMIX, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
More From Business
The secrets of tennis legend 
- 1
- 2
- 3
- 4
... - 7
- next
See all 121 CommentsHenderson 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.
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.
And they expect a different result?!?!
Seriously?!?!
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.
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 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.
....and "obscenities and profanity"? Nice try.
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.
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?
----------
hungry, you convinced me!
From now on, it's buy Made in USA for me.
Nothing but Toyotas!!!
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.
The jobs you save may be your own.
NO MORE BAILOUTS, STIMULUS, OR ANY OTHER BILLON DOLLAR GIVEAWAYS
Obama is a total failure. His intention is to destroy the USA and reduce us all to slaves and homeless starving beggars.
One more "stimulus" could be all it takes to push us over the brink to irrecoveralbe economic disaster.
STOP GIVING AWAY BILLIONS OF DOLLARS OUT OF OUR POCKETS AND STUFFING IT INTO THE POCKETS OF THE UTRA WEALTHY POWER ELITE
Do you HEAR me, President Obama????
Instead of a tow truck, drive around in a truck with a heavy duty battery charger powered by a diesel electric generator.
You can name your price to recharge a stranded electric car.
LOL! Too sweet.
I'm sure the big companies are all over that one already.
"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."
------------------------------------------------------
Henderson can issue one order that will help GM 1000%. Effective immediately, there will be no more limos for all GM executives. Effective immediately, all authorized GM employees will go to the nears GM plant, select a GM car or truck and personally drive that vehicle for at least 18 consecutive months. At the end of the period, that employee will submit a formal detailed written report to the GM Quality Department as to how the vehicle performed, any problems, etc. The GM QD will use those reports to help turn out better vehicles.
Buy Ford since they make the best Trucks on the planet and they didn't take a bailout. Write your congressman and fight for putting a Big Tarriff on companies who want to send our jobs overseas. If not, one day we will be slaves to China.
-------------------
I keep seeing more and more posts that oppose free trade and advocate a tax on imports, a.k.a. tariffs.
By 1918, the USA had become the most prosperous and powerful nation in the world. And we did it with TARIFFS as the primary source of income for the federal government.
Income tax was unconstitutional until the Sixteenth Amendment was ratified in 1913. Up to then, we had tariffs instead of income tax.
TARIFFS ARE THE SOLUTION to our problem.
And yet, Obama adamantly opposes tariffs an any other kind of protectionism.
When will Obama wise up and see that tariffs are the solution????
History is against free trade. Free trade will drag us down to a third world slave labor nation like China.
Tariffs made us in industrial superpower. Tariffs will build back our economy again.
-------------
OK, let's try that.
YOU think of a way to compete with slave labor without becoming slaves ourselves.
Get back to me when you figure out something.
I won't hold my breath.
--------------
Tbanks to 18 years of free trade globalization and the New Economy, NOTHING is made here anymore.
THAT'S THE WHOLE POINT.
If you want to bring jobs back, we have to stop free trade.
Free trade is destroying our economy.
Obama hates the U.S. worker. He is using free trade to destroy the U.S. worker.
STOP FREE TRADE NOW
The job you save could be your own.
---------------------
Obama is making Bush look good.
How many of the companies that Bush bailed out are bankrupt now?
Remember, it was Pelosi who wanted to bail out GM, not Bush.
And why is it, the only way you can defend Obama is by saying he's as bad as Bush?
LOL! Look at all the comments here. Everything good about Obama is something that WILL happen, according to them. But everything that ALREADY HAS happened is Bush's fault. ROTFLMAO!
I'll start believing in your messiah AFTER he has a few ACCOMPLISHMENTS that have ALREADY HAPPENED.
So far, you messiah's miracles are all just PROMISES, PROMISES, PROMISES...
Stupid republicans, isnt it you guys who claim the '**********' are chanting'death to america?'
'kill him!' 'traitor' 'commie!'
LMAO that convention will go down in history as one of ugliest anti-american travesties of american political history!!
Ha, its good times again in the USA!!
Like the 90's with clinton, we can bhe happy again; no neo-nazi republicunts trying to round us up to be shot..
Anyone else notice how light and breezy the news has been lately?
And thats with a historic recession going on??
Good thing we elected Obama.. I havent been this optimistic in years..
I thought he was gonna 'take away our guns' and 'roll out communism', eh??
Stupid morons,go put on your white robes and kill yourselves already!! We intelligent, wealthy, happy, well-fed and secure americans, we true patriots, dont need your FEAR anymore!!!!
No more fear!! Vote no on republicunt scum and keep the prosperity going for ALL americans, not just the top 5 percent, the ONLY segment of the population to get RICHER for DECADES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Arent you ashamed of that?!?
Look for GM to bring their made-in-China and sell them in the States. The destruction of the middle class is nearly complete.
--------------
Yes, thanks to Pelosi who first demanded the GM bailout, and to your messiah the almighty Obama.
Obama is a total failure.
Obama hates the middle class. His intention is to destroy the middle class.
Obama is just the next lapdog for the ultra wealthy power elite.
Obama is the worst president in 100 years.
For example, we apply toothpaste to a toothbrush. We recognize when it becomes difficult to apply the normal amount of toothpaste, and we buy a new tube, so that we can return to the normal toothbrushing pro-cess.
questions? jglg3@verizon.net
the Marketting and Sales Departments should take a step back
and let real innovation lead the way,
Has anyone Driven a NISSAN lately?
the Transmission alone is a thing of Marvel.
you cant feel it. its just go and go faster.
Where is the Spirit of Innovation?
aparently its been lost, I own 2 Nissans and i will not
buy GM or American until i can feel the driving difference or until
i get a better car for my money.
The audacity of ignorance. Them for thinking we did not feel the same way, is ignorance. Good Job Fritz.
- 1
- 2
- 3
- 4
... - 7
- next
See all 121 Comments