GM Unveils Post-Bankruptcy Plans

Updated 9:18 a.m. ET

The new General Motors arose on Friday as lawyers finished an all-night paperwork session transferring the automaker's good assets to a brand-new company controlled by the U.S. government.

The massive transfer of factories, money and intellectual property was completed about 6:30 a.m., according to a person briefed on the situation, clearing the way for a smaller and faster company better equipped to compete in the brutally tough global automotive market.

One bankruptcy expert called GM's 40-day case the fastest ever for a company of its size.

GM's warp-speed emergence from bankruptcy was announced by CEO Fritz Henderson and new Chairman Edward Whitacre Jr. at a news conference at the company's Detroit headquarters.

Henderson also announced details of the plan to make new GM profitable again, including eliminating executive payroll by 35 percent. The troubled automaker has lost more than $80 billion in the past four years.

"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."

Once the world's largest and most powerful automaker, new GM is now cleansed of massive debt and burdensome contracts that would have sunk it without federal loans. Spurred on by the Obama administration's support, the bankruptcy process was two day's faster than crosstown rival Chrysler Group LLC's 42-day timeframe.

On Thursday, a bankruptcy court order allowing GM to sell most of its assets to a new company went into effect. The new GM, 61 percent owned by the U.S. government, will face a brutally competitive global automotive market in the middle of the worst sales slump in a quarter-century.

GM's white-collar job cuts total 4,000 white-collar jobs, including 450 top executives. The company still employs 88,000 people in the U.S. and 235,000 worldwide.

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.

Henderson also is expected to describe how GM will streamline its bureaucratic management structure to become profitable again. GM has said it will be able to make money even if the U.S. auto market stays at a depressed level of 10 million to 10.5 million vehicles sold.

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 failed, the effects would have been "devastating."

Yet despite massive cost reductions, experts say GM must produce vehicles that people want to buy, and change its image to one on the cutting edge of efficiency and quality.

"It is the smaller, leaner, tougher, better cost-focused GM," said George Magliano, an automotive analyst with the consulting firm IHS Global Insight. "But they still have to deal with the problems that they faced longer-term."

Rep. Gary Peters, whose Michigan district is home to three GM factories, said the company's emergence signals a new era for the domestic auto industry and the thousands of people it employs.

"With bankruptcy in the rearview mirror, U.S. auto companies will even more aggressively pursue new technologies, become more globally competitive," he said. "Decades from now, our nation will be glad we did not let a global credit crisis put an end to the American automobile."

"I'm very much looking forward to a point where we're operating in clear air, and the name of the company not being associated with bankruptcy and loans and these things," said Mark LaNeve, GM's North American marketing chief.

GM ranked as the top global automaker in terms of sales for 77 years before Japan's Toyota Motor Corp. snatched its crown in 2008. The company sold nearly 8.4 million cars and trucks around the world in 2008, falling short of Toyota's nearly 9 million.

Once the largest corporation in America, GM held the top spot in the Fortune 500 ranking for 20 years before being pushed out of the top spot in 1973 by Exxon Mobil Corp. It reclaimed No. 1 status in 1985 and held it for another 15 years.

Experts say GM's future success will depend largely on its ability to persuade consumers that it's a different company, one that builds cars that will equal or outlast Japanese models. To illustrate the change, GM is considering a new name.

Turning a profit will not be easy. GM lost more than $80 billion in the last four years and survives only because it expects to receive $50 billion in U.S. government loans. Without the loans, its executives have said the company would have been sold off in pieces.

The Obama administration has said it does not plan to interfere with day-to-day operations, though it ousted ex-CEO Rick Wagoner and has been involved in picking the new company's board.

Most of GM's model lineup is expected to stay unchanged for now. But the company on Friday will probably show off its newer, more efficient models, as well as plans for a U.S.-made subcompact and rechargeable electric vehicles.

Also on Friday, Henderson is expected to announce that Bob Lutz, GM's product guru, will remain as a special adviser. Lutz, 77, announced in February that he would retire at year's end.

In addition to the U.S. government's 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.

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.

Almost immediately, GM will try to show how it's a different company, perhaps by changing its familiar square logo from blue to green, to reflect its environmental focus.

"I think that as a corporate identity the color change could well be a smart move," said Tony Spaeth, president of Tony Spaeth/Identity, a Rye, N.Y., firm that helps companies craft identities. "It lends a little bit more reality and sincerity of intention to 'We want to change the way we do things."'

Today's consumers are sophisticated and will seek out environmental information to help make shopping choices, said Allen Adamson, managing director at branding firm Landor Associates.

"They have to do this just to stay in the game and to win on that dimension. To win on green, this is a very big challenge," he said.

Toyota, for instance, is known for its breakthrough hybrid gas-electric technology, and GM could accomplish the same thing with its Chevrolet Volt rechargeable electric car due in showrooms by late 2010.