New General Motors Hopes to Profit in 2 Years

GM plans to make money by emphasizing quality and revising its fleet so that it is more energy efficient. One car GM is excited about is the Chevy Volt, a rechargeable electric vehicle that is due out in late 2010. The company is also betting that consumers will again flock to GM showrooms if it can do a better job proving its vehicles are some of the best on the road.

Henderson said the company needs to expand in the U.S. and announced that GM will launch 10 new vehicles domestically. The objective is to create products that are not just competitive but best in class, he said.

But, he said, the success will come through an emphasis on fewer, better car models.

In addition to marketing and production goals, Henderson announced that the company will reduce its management ranks by 35 percent and salaried employees by 20 percent by the end of 2009. The position of president of General Motors North America has been eliminated, he said. Henderson will assume immediately assume responsibility for the auto makers North American operation.

In the hopes of improving sales in the U.S., Henderson announced that GM will soon launch 10 new vehicles. Going forward the objective is to create products that are not just competitive but are the best in class, he said.

Bob Lutz will become a vice chairman responsible for all creative elements of products, marketing and customer relationships, Henderson said. Lutz was scheduled to retire at the end of the year.

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.

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.

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