General Motors (GM) and Chrysler have submitted their updated restructuring plans as required by the loan agreements signed in December 2008. The plans outline the need for an additional $16.6billion in Federal support for GM and an additional $2billion for Chrysler.
Let’s take a look at what each manufacturer has planned:
General Motors
GM has lowered its forecast for 2009 US industry sales to 10.5 million units and 57.5 million units globally. It will have a total of 36 nameplates in 2012, down 25 per cent from existing levels.
It plans to sell or phase out the Hummer brand by March 31 with a final resolution no later than 2010. It has offered Saab for sale and is requesting Swedish government support prior to any sale. Saturn meanwhile will remain in operation for several years through the end of the planned lifecycle for all of its current products. However, in the interim GM will remain open to a possible sale or spin-off of the Saturn brand.
Its dealer count will be reduced from 6,246 in 2008 to 4,100 by 2014 and 47,000 jobs will be eliminated globally including 21,000 US jobs. There will be five additional plant closures in North America and outside the US GM has accelerated restructuring plans in Canada, Europe and the Asia-Pacific regions
In terms of product plans, GM hopes that by 2012 more than 50 per cent of US car passenger sales from the company will be derived from new global architectures – this will increase to 90 per cent by 2014. There will be ongoing enhancements of hybrid and electric vehicle technology as well as potential natural gas applications and a third generation of hybrid systems.
Chrysler
The company has outlined three alternatives. One is a stand alone option that requires an additional $5billion ($3billion of which has already been requested but not yet granted) in Federal funding. Another is a strategic/consolidation option, such as the Fiat plan; and finally there is the orderly wind down option. Chrysler is believed to be pushing for a strategic partnership with Fiat.
As part of its proposed alliance with Fiat, Chrysler would gain access to its vehicle platforms and accelerate the introduction of more environmentally friendly vehicles.
Addressing the potential waiver to California to enforce greenhouse gas regulations, Chrysler says it will do its best to comply but may have to restrict sales of certain models in those states. It will have a product portfolio aimed at meeting the California zero emission vehicle mandate and has aggressive electrification plans.
