Daily Edition: Feb. 8, 2006

February 8, 2006

GM Announces New Cuts

General Motors Corp. announced a new wave of cost-cutting, aimed at stuffing criticism the company hasn't moved fast enough to meet the challenges that contributed to $8.6 billion loss in 2005. Richard Wagoner, GM's chairman and chief executive officer, said Tuesday GM intended to slash the dividend to common shareholders by 50 percent, cap defined-benefit pensions of existing salaried employees and put GM's white-collar retirees on notice that they will have to cover the cost of future increases in health care. The salaries of GM's top five executives and directors also were cut substantially as part of the reductions. 

"We are now aggressively implementing a solid plan to turn around the North American business and restore overall profitability as quickly as possible," said Wagoner, who in recent months has been trying to quash speculation that GM might be forced to seek bankruptcy protection. Wagoner, however, said he ruled an across the board pay cut for salaried workers, noting that GM's pay levels are already at market levels.  

In November, GM announced it was eliminating 30,000 blue-collar jobs by 2008. -Joe Szczesny

GM Slashes Exec Pay, Dividend by TCC Team (2/7/2006)
Still more "shared pain" could be in the offing, CEO Wagoner suggests.


Toyota Profits Up 34 Percent

With GM cutting dividends and salaries, and Ford just setting out on the Way Forward, Toyota doesn't have much to look back on. The Japanese automaker reported a 34-percent rise in profits for the most recent Japanese fiscal quarter. The quarterly profit of $3.34 billion could be eclipsed in the coming months if auto sales stay stable and the company continues to draw market share from Ford and General Motors. Toyota plans to invest almost $12 billion in new plants before the end of its fiscal year on March 31, too, which could help it toward its goal of boosting U.S. sales by five percent this year.

2007 Toyota Camry by Bengt Halvorson (1/30/2006)
Ready to spoil a new round of frugal family buyers - and keep its best-selling title.


Toyota Expands Ont. RAV4 Plant

Before it's even open for business - as has become the custom for Toyota - the company is expanding the production capacity of its new assembly plant in Woodstock, Ont. Toyota said on Tuesday that it would expand production at Woodstock to 150,000 units and would boost its investment by about $300 million. In November, Toyota announced construction of the new plant and said it would employ 1300 workers to build 100,000 RAV4s yearly, for an initial investment of $650 million. Total employment and investment numbers are expected to rise to 2000 workers and $950 million. Production begins in 2008.

2006 Toyota RAV4 by Bengt Halvorson (11/29/2005)
Two more seats, two more cylinders, more value all around.


OnStar Adding Turn-By-Turn Navigation

OnStar gets turn-by-turn navigation this year as the GM division tries to boost profits and take on in-car navigation systems. The technology will be unveiled this week at the Chicago auto show. Right now, OnStar subscribers can ask OnStar operators to give them instructions over the network, and can record them in some vehicles through a voice note recorder. With the new system, OnStar advisors will send instructions through the network to the car, which then plays back the audible commands through the stereo system. Some versions of the Buick Lucerne and Cadillac DTS/STS will be the first to offer the technology in the 2006 model year. GM expects one million cars to be capable of the system in the 2007 model year. OnStar hasn't confirmed an annual price for the service.

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