2007 Cadillac Escalade by TCC Team
Bigger, better and blingier.
Delphi Deadline Draws Near by Joseph Szczesny
Will March 30 bring strikes or settlements?
Sweeping Buyout Planned at GM by Joseph
UAW agrees to cuts at company, Delphi.
Final sales figures for March aren’t due until next week, but General Motors is launching a pre-emptive strike this week in an effort to put a forward spin on a story — the success of its new products — that it believes has been overlooked in the seeming endless waves of grim news about finances and downsizing.
GM has scheduled a full-scale
briefing this week to tell its side of the story ahead of the sales
numbers. Those numbers are, according to an interim report on March sales
activity put together by J.D. Power and Associates, rather humdrum. GM’s PR
offensive will argue that the new pricing strategy is working.
Steve Harris, GM vice president of communications, said GM believes some of the very positive aspects of the GM turnaround story have been overlooked in recent weeks as news organizations focused on the negative reports that swirled around the company.
rumors of a new round of deep cuts in GM’s salaried ranks continue to percolate
The reports of new, deep cuts in
the company’s engineering ranks were circulating Friday as GM’s Human Resources
personnel tacked up signs on conference room doors at key GM engineering centers
Cuts in the making
At the same time, GM’s labor
relations staff is scrambling to start making buyout offers to GM’s 113,000
blue-collar workers as soon as this week under the terms of the special
agreement negotiated with the United Auto Workers. No one knows for sure
how many of GM’s workers will actually accept the buyout. Many of the company’s
workers are clearly demoralized by the constant pressure for cuts and would like
to leave but at the same time many workers are fearful that the promises from
the GM and the UAW, particularly on healthcare benefits, will prove empty in the
years to come, workers said last week.
The buyouts, however, are only one
part of GM’s ongoing restructuring. GM is still struggling with the sale of its
stake in GMAC, which company officials insist is still on the agenda. However,
last week’s sale of GMAC’s commercial mortgage business was instructive.
The deal was first announced in August 2005 but it took more than seven months
to put together and GM wound up giving away an even bigger stake to the
buyers, who also slapped a new name on the company that doesn’t even offer
a hint that it was once connected to the automaker.
The deal for GMAC as a whole is even more complicated because it is more acute. The downgrades last spring that reduced GM’s credit rating to junk have put enormous pressure on GMAC and it could certainly use the credit-rating upgrade promised by a deal with outside investors. However, issues from the name of the reorganized company to GM’s continuing role in policy-making and liabilities should GM go bankrupt all have to be resolved.
In addition, GM’s residential
mortgage business, ResCap, has been hit by accounting snafus that forced GM
to delay the filing of its 10K annual report with the Securities Exchange
Given the schedule used for the
commercial mortgage spinoff, it seems likely the sale of GMAC might not be
completed until some time next summer if it all.
The delays in the GMAC spin-offs
raise new issues about the speed of GM’s transformation. Wagoner’s critics
maintain he has not gone fast enough or far enough in shaking up the
company. Thus, the speculation that Wagoner could be forced out has
intensified in recent weeks, particularly now that Jerry York, Kirk Kerkorian’s
man, is now on the GM board.
Replacing Wagoner, however, is not
simple. In many ways it would be very similar to changing administrations in
GM’s Harris adds that those criticizing Wagoner haven’t bothered to look at the larger picture. “They’re not looking at all the things we’ve done,” Harris said, noting the agreement with the UAW on healthcare, the development of the restructuring plan and the sale of stakes in Suzuki and Fuji Heavy/Subaru as emblematic of GM’s aggressive efforts to fix itself sooner rather than later.