GM Says Turnaround is Gaining

[ChevroletRevived]

GM Says Turnaround Gaining

A week of financial news could contain the seeds of recovery.


At the very end of last week, General Motors Corp. finally got a bit of good news as a federal judge in Detroit ruled that it could go ahead with changes to healthcare plans for employees and retirees that it had negotiated last year with the United Auto Workers.


The announcement capped off another week of reports and pronouncements that underscored the depth of GM's problems, from the disclosure the automaker has lost another point of market share in the first quarter to the news that GM is now facing a widening investigation by the Securities Exchange Commission.

GM also confirmed it was planning to sell off its stake in Isuzu as part of its continuing effort to raise cash, and that it had been forced to reduce its spending on research and development. Another part of GM's turnaround plan, the sale of a controlling interest in General Motors Acceptance Corp., is also nearly in place, pending the completion of very detailed contracts, according to a report in the Wall Street Journal.


Nevertheless, the changes to employee healthcare plans are considered one of pillars of chairman and chief executive officer Richard Wagoner's efforts to revive GM. The welcome court ruling on healthcare cuts allowed Richard Wagoner, GM's embattled chief executive officer, a chance to take a swipe at his critics, both in the media and in the investment community.


"This approval allows us to fulfill those important objectives as we continue to rapidly implement all aspects of our North American turnaround plan," Wagoner noted in statement released late Friday.


The plan reduces GM's retiree healthcare liabilities by about $15 billion, or 25 percent of the company's hourly healthcare liability. It also reduces GM's annual employee healthcare expenses by about $3 billion on a pre-tax basis and will yield about $1 billion in cash savings.

Link: http://www.thecarconnection.com/Auto...75.A10225.html

[ChevroletRevived]

Good news. GM really seems to be turning itself around.

[betron02]

yeah way to go GM keep it up

[Butz]

Well that's a relief!

[paul8488]

Oh geez. Just as I don't assume simple statements about how poorly GM is doing mean much, I don't put much stock in these positive ones. None of it means anything if GM doesn't actually improve.

[oldsmann]

maybe this is off subject but if all of gm's divisions are having these problems why did they axe oldsmobile

[MaxLegroom]

The only bad news I read there is the reduction in the spending on research and development. That is how they're going to catch up with the competition.

[zaxxis]

Personally, I would not start even talking about the turnaround -- until -- the UAW/Delphi and the 2007 UAW/GM fights are settled.