http://www.reuters.com/article/marke...0080715?rpc=44
July 15 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) on Tuesday
laid out a broad restructuring to boost cash by $15 billion
through 2009 and return its operations to profitability.
Following are the highlights of the automaker's
announcement:
* Planning assumptions: GM estimates industrywide U.S. auto
sales of 14 million in both 2008 and 2009, GM U.S. auto market
share of 21 percent, and average oil price of $130 to $150 per
barrel by 2009.
* Internal operating changes and other actions expected to
generate $10 billion cash improvement by the end of 2009.
* White-collar job cuts in United States and Canada in 2008
through buyouts, early retirement offers and attrition.
* Suspends dividends on common stock, effective
immediately, which is expected to improve liquidity by $800
million through 2009.
* Expects to raise $4 billion to $7 billion through asset
sales and financing activities; initially targeting at least $2
billion to $3 billion of financing.
* Says has gross unencumbered assets of over $20 billion,
which could support a significant secured debt offering, or
multiple offerings. Assets include foreign subsidiaries,
brands, stake in lender GMAC.
* Reviewing global assets for possible sale or
monetization, expected to generate $2 billion to $4 billion.
* Health care coverage for U.S. white-collar retirees over
65 to be eliminated, effective Jan. 1, 2009. Affected retirees
and surviving spouses to receive a pension increase to help
offset health care costs.
* To defer $1.7 billion of payments scheduled to be made
over 2008 and 2009 for the establishment of a new United Auto
Workers union health care expenses trust.
* No new salary increases for U.S. and Canadian
white-collar employees for the rest of 2008 and 2009.
* No annual discretionary cash bonuses for the company's
executive group in 2008.
* Benefit changes, white-collar job cuts and other related
savings to result in an estimated reduction in cash costs of
more than 20 percent, or $1.5 billion, in 2009.
* Structural cost saving of $2.5 billion expected in North
America through cuts in truck capacity and related component,
stamping and powertrain capacity in response to lower U.S.
industry volume.
* Truck capacity expected to be reduced by 300,000 vehicles
by the end of 2009.
* To reduce and consolidate sales and marketing budgets,
but will protect new products and brand advertising.
* Engineering spending in 2008 and 2009 will be held at
2006-2007 levels.
* Capital expenditures now estimated to total $7 billion in
2009 versus prior plans for $8.5 billion.
* Annual capital expenditures expected to run at $7 billion
to $7.5 billion beyond 2009, excluding China.
* Delaying next-generation large pickup and SUV program, as
well as V-8 engine development.
* Spending for non-product programs to be significantly
reduced; funding to be increased for development of alternative
propulsion and fuel economy technologies and small-displacement
engines.
* To improve working capital by $2 billion in North America
and Europe through reduction of raw material, work-in-progress
and finished goods inventory levels as well as lean inventory
practices at parts warehouses.
* To report a significant 2008 second-quarter loss, hurt by
settlement with parts maker American Axle and local union
strikes in North America as well as continued weakness in the
U.S. auto market and consumer shift toward smaller cars.