GM announces cuts, changes

Here we go again: round infinity-billion of US auto makers crying about tough times and how it is sooo hard for them to have to let people go to return to profitabilty, but it must be done.  To be quite honest, I believe a lot of people in Michigan have had it with all the talk and the whining.  Yes, it’s true the Bush Administration doesn’t care about the auto industry and the entire state is suffering because of this, but the auto manufacturers based in Michigan have to start at least partially blaming themselves for being so wrapped up in big profit, low fuel efficient vehicles.  Now their employees are paying the price.

From CNN.com:

NEW YORK (CNNMoney.com) — General Motors Corp. said Tuesday it will suspend its dividend, sell off $4 billion to $7 billion worth of assets and cut 20% worth of salaried cash costs in an overall plan to save billions of dollars.

“We need to take some very tough actions to ensure our survival and success,” said Chief Executive Rick Wagoner, in a press conference, referring to the current market conditions as an “unprecedentedly difficult time.”

…

 As part of its cost-cutting, GM plans to eliminate health care coverage for U.S. salaried retirees older than 65, effective Jan. 1. Wagoner said the company will increase pensions for affected retirees and their surviving spouses to “defray the impact.”

I think that last paragraph makes me most disappointed; let’s go after those people who gave us their entire working lifetime and depend on us for health insurance.  ‘Gee, ummm…. thanks for all your hard work and taking care of us… oh, by the way, we’re taking back your health insurance because we made some really bad decisions.  Have a good day!’.  I believe it goes without saying that the increase in pension will not come anywhere near covering the cost of health insurance.

Now, before I get too hot-headed, I should note that at least the companies have realized the need to get more fuel efficient.  With all the talk of electric hybrids, hydrogen and even solar power vehicles becoming closer to reality, the companies are indeed making a shift in the right direction and I for one believe the American people are very happy to read the following from the same article:

“Our plan is not just a plan to survive; it’s a plan to win,” said Wagoner, noting that raised cash could aid the company in shifting from trucks and SUVs to more fuel efficient cars.

“Our stated goal is to become the fuel economy leader in every sector in which we participate,” said Robert Lutz, GM’s vice chairman of global product development.

…

In June, GM said it would shut four SUV and truck plants, would shift to more fuel efficient vehicles and discontinue its Hummer brand.

Those shut-downs were the first good tactical move we’d seem from GM in a long time.  It really is incredible to hear them say that, especially when you consider the fight they put up against raising efficiency standards last summer in Congress.  In fact, they haven’t made a profit since 2005, but were also failing to make the moves necessary to make a profit, so good job wth that aspect!  I intend to buy a fuel efficient American-made car as soon as I can; needing to have an American made car is just the union-family member Michiganian in me – but I need companies to start making them in large quantites so I can afford one when I finally start a real fulltime position somewhere.

And finally, this obviously shows the need for us to get our addiction to oil undercontrol.  If you want an interesting take on how we may be able to do this, check out http://www.pickensplan.com/.  It’s the website of the guy you see on TV sometimes with the commerical about a new energy plan.  The CNN article specifically says:

The Detroit-based automaker has been hard-hit by record-high gas prices, economic weakness, and a waning consumer interest in trucks and sport utility vehicles.

I think it’s obvious we need to demand change in our energy policy, in our auto manufacturers and in ourselves if we ever want to get out of this slump.

AA: TFR!