New General Motors Hopes to Profit in 2 Years

The new GM pushes ahead with a smaller workforce. By the end of the year, the automaker expects to have 69,500 employees, down from 91,000 in 2008.

The company's dealer chain has been affected by the changes. GM is reducing its 6,000 dealer network to roughly 4,100 by the end of 2010.

As part of the company's new focus on customers, GM will form a partnership with eBay for customers to buy vehicles through online auction.

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GM's rival Chrysler recently emerged from bankruptcy protection dramatically smaller and fueled by cash injections from the U.S. government. The company forged an alliance with Italian auto maker Fiat and cut 789 of its dealers.

Some lawmakers on Capitol Hill have moved to pass legislation that would prevent the companies from consolidating their dealership networks. Obama administration officials and representatives of the automakers have been meeting privately with lawmakers about the matter.

Ford Motor Co. has steered clear of bankruptcy or a government bailout and recently announced plans to expand its production of cars and light trucks in the third quarter of this year.

With the U.S. auto market operating at a depressed level of less than 10 million vehicles sold per year, the new company will try to bring in cash by focusing on only four brands: Cadillac, Buick, Chevrolet and GMC. Gone are Hummer, Saturn, Saab and Pontiac.

GM leaves bankruptcy with $48 billion in debt, a dramatic improvement over the $176 billion it claimed in its Chapter 11 filing. The new company will also drive into the future without old liabilities, which will remain in bankruptcy as bad assets to be liquidated or sold off. Although a U.S. bankruptcy judge approved the sale on July 7, the order did not take effect until yesterday.

A group of asbestos claimants and car-accident victims cried foul, formally appealing the ruling. Their request for an expedited appeal that would bypass the U.S. District Court was denied by Judge Gerber and a federal district court denied a motion to extend the initial four-day stay.