GM Emerges From Bankruptcy Protection Facing Tough Car Market
General Motors Corp. CEO Fritz Henderson announced Friday that the company emerged from bankruptcy and now begins the task of remaking the struggling American carmaker that was once the world's largest and most powerful.
said the "new GM" will be faster and more focused on customers as it
tries to rebound from years of billion-dollar losses.
"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," Henderson
told a press conference in Detroit,
as quoted by the Associated Press.
"Business as usual is over at General Motors," Henderson said.
In one of the fastest turnarounds for a company of its size,
it took just 40 days for lawyers to straighten out the automaker's debt and
told reporters GM would repay about $50 billion in government loans ahead of a
The bulk of the company's assets, including core brands
Chevrolet and Cadillac, were transferred to a company controlled by the U.S. government,
Reuters reported. Lawyers tackled a 2-foot pile of documents in an all-night
session, according to an AP source.
Another of Detroit's
Big Three automakers, Chrysler Group LLC also emerged from bankruptcy earlier
this year in just 42 days. GM's bankruptcy was shorter than Chrysler's, even
though Chrysler is a smaller company.
also pledged to become more personally involved. The company will launch a
"Tell Fritz" Web site to open communication with senior management at
The company also plans to reduce its overall U.S. salaried
employment by 20 percent by the end of 2009 and cut its management by 35
percent, or 450 employees, according to the AP.
The quick retooling of both companies is welcome news for the
Obama administration and for the state of Michigan. Many of the car factories are
located in Michigan
and the state has an unemployment rate of 14.1 percent as of May, the highest
in the country, according to the Bureau of Labor Statistics.
"With bankruptcy in the rearview mirror, U.S. auto
companies will even more aggressively pursue new technologies, become more
globally competitive," said Rep. Gary Peters, D-Mich. "Decades from
now, our nation will be glad we did not let a global credit crisis put an end
to the American automobile."
government will hold 61 percent controlling interest in the company and has
shored up GM with $50 billion of emergency funding from the government. The
Obama administration has been involved in picking its board after ousting CEO
Rick Wagoner in March.
Once the world's largest and most powerful automaker, the
new GM still faces many challenges and even as it emerges from bankruptcy, it
faces one of the toughest sales markets in a quarter-century.
"The key challenge is going to be on the marketing
side," said Art Spinella, president of CNW Marketing Research, as quoted
by the Detroit Free Press. "That would be to convince the consumers of two
things: No. 1, that the products are good and, No. 2, that the company is
around and healthy."
said on Friday that the company will build more cars and trucks, launch new
vehicles faster and focus more on customers. He mentioned a partnership with
the auction site eBay to allow customers to buy vehicles online.
The company will launch more fuel-efficient cars and focus
on fewer brands. GM has worked to slash its dealer network by almost 40 percent
and cut loose from stalling brands of Saab, Saturn and Hummer.
Bob Lutz, the 77-year old vice chairman who had announced
retirement at the end of the year, agreed to stay at the company and oversee most
of the creative work, the Detroit Free Press reported.
---- Compiled from wire reports and other media sources