DETROIT — General Motors is expected to reveal a “wide-ranging” plan on Tuesday to address its deteriorating sales and liquidity by cutting more jobs and taking other steps aimed at reviving its turnaround effort.þþG.M. said late Monday that its chief executive, Rick Wagoner, would address employees in the morning before appearing at a news conference along with other executives. The latest move comes six weeks after another major revamping announcement and amid considerable speculation that G.M. could be headed toward a bankruptcy filing.þþA G.M. spokesman, Dan Flores, said Mr. Wagoner would announce a “variety of actions the company is taking to align the business with current market conditions.” He declined to provide details.þþHowever, Mr. Flores denied that G.M. was nearing insolvency. “Bankruptcy protection is not an option that G.M. is considering,” he said.þþIndustry analysts said that G.M. needed broad cuts to persuade Wall Street that it was reacting sufficiently to drastic changes in the United States market.þþ“I don’t think we’ll see any type of brand strategy changes, but I believe we’ll be seeing some very significant job cuts,” said Rebecca Lindland of the auto forecasting firm Global Insight in Lexington, Mass.þþThe job cuts are expected to include both hourly and salaried positions. G.M. has about 32,000 white-collar jobs in the United States, down from 45,000 in 2000. The company has already eliminated more than 40,000 hourly jobs through buyouts and early retirements since 2006. þþAt G.M.’s annual stockholders’ meeting last month in Delaware, Mr. Wagoner announced plans to close four plants in North America that build slow-selling trucks, but salaried workers were for the most part unaffected.þþSince then, G.M. has halted work on some trucks and other vehicles, leaving employees assigned to those projects in jeopardy. Analysts said the automaker might announce further plans to consolidate some vehicle programs.þþFord Motor, meanwhile, recently began laying off workers to eliminate 15 percent of its salaried labor costs by Aug. 1. Ford is also idling plants and delaying the introduction of its redesigned F-150 pickup in response to record gasoline prices that have decimated sales of big, gas-thirsty vehicles.þþShares of G.M. declined 5.4 percent Monday to $9.38, their lowest closing price in more than half a century. The stock was worth more than $40 as recently as October.þþIn the first half of 2008, G.M.’s sales were down 16.1 percent. Total industry sales were off 10.1 percent, with truck sales declining by 17.9 percent.þþFord and G.M. have extended the annual two-week summer shutdown at many of their truck plants to as long as three months because inventories of those vehicles were so large. Last week, Toyota of Japan said it would halt truck production in Texas and Indiana for three months starting Aug. 8.þþMonday was the first day back at work at many G.M. plants. Mr. Flores said employees at plants that were not running would not be called back for Tuesday’s announcement but would have the opportunity to hear Mr. Wagoner’s remarks.þþThe announcement is not expected to include plans to sell or close any of G.M.’s eight brands, other than Hummer, which the company has already said it might sell.þþWhile cuts are widely expected in Mr. Wagoner’s announcement, investors will also be expecting G.M. to address its dwindling cash position. þþThree months ago, G.M. said it had $24 billion in cash and access to a $7 billion credit line. But analysts estimate that the company has been burning through about $3 billion in cash a quarter, and they say G.M. needs to act quickly to avoid a liquidity crisis.þþThe automaker, analysts say, needs at least $10 billion to $15 billion in new capital to assure its liquidity through next year.þþLast week, Mr. Wagoner said that G.M. had enough cash and borrowing power to last through 2008.þþ“It’s very sobering to hear Rick Wagoner say that they have enough cash to last through the end of the year,” Ms. Lindland said. “No matter how many cuts they make, G.M. has to cut back on its cash burn or find a source of new cash.”þþPossible actions to improve the cash position could include cutting the stock dividend or borrowing money by putting up international operations as collateral.þþ
Source: NY Times
