"We're going to move as quickly as we possibly can so we can start moving up the hill, instead of always moving down the hill," Kresa says.
But consumers may have already lost faith: GM's market share is hovering around 19% for the year, down from nearly 22% a year ago. The automaker has lost customers such as Las Vegas resident Cherie Cashio. She says she grew up driving GM vehicles, cars she thought were made by a "proud leader."
But now, "I can't say that any longer," Cashio says. Her family owns imports and a Dodge truck, and she doesn't expect to return to the GM fold. She expects GM to get complacent again, "when all the dust settles and the infusion of money clears."
And communities such as Spring Hill, Tenn., are hurting. Spring Hill was once a gem of GM's plants, home to the Saturn brand. Now it's on standby, waiting to see whether it will be chosen to make GM's new small car.
"Probably one of the worst things about it has been watching all the stress on workers' faces and their families' faces," says Darwin Bible of Darwin's Barber Shop near the plant. "There's been a lot of stress and fear."
The news can't make consumers feel better about buying a car. An additional 20,000 employees will lose their jobs. About 1,100 dealers have already been told they'll close; 1,000 more will be added to that list. And 14 plants will close by the end of 2010 — seven in Michigan, three in Ohio, and the rest in New York, Tennessee, Delaware and Indiana.
Additionally, companies across the USA are owed big bucks by GM, according to its filing: It owes $121 million to an ad company in Chicago, $17 million to Hewlett-Packard in California and $11.9 million to a Boston bank, to name a few. Most eventually will be paid, but there could be delays or renegotiation.
"It's certainly a stress test for the economy," says Dan Seiver, a finance professor at San Diego State University. The greatest impact will be felt in the already hard-hit Midwest, he says, but ripples will hit the entire nation.
Impact on suppliers
The most immediate economic fear is for GM's suppliers, which have been slammed with declining production schedules by all automakers in the past few months. When production slows, so does cash flow, and many smaller firms that make up to 70% of the parts that go into vehicles are filing for bankruptcy or simply closing.
Last week, Visteon and Metaldyne filed for court protection. Hayes Lemmerz International and Noble International filed earlier this year, and more are expected in the coming days.
"It's going to be a very ugly summer here, and we haven't even seen the first inkling of that yet," says Pat O'Keefe, managing director of Michigan turnaround firm O'Keefe & Associates. "These suppliers have been slugging it out for some time," and have no cushion left to make it through the downturn.
Failing suppliers could cause problems for other automakers, which so far have skirted the issues plaguing GM and Chrysler. Most suppliers make parts for multiple automakers, and the parts they manufacture are designed specifically for one type of vehicle.
If the company that makes door handles for GM closes, even temporarily, it could shut production lines at other automakers.
"It's going to affect the Toyotas, Hondas and Fords of the world, because they're going to have more unplanned downtime because of supplier shutdowns," says Laura Marcero, a restructuring specialist at Grant Thornton.