GM to go green, cut execs, as it exits bankruptcy

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GM to go green, cut execs, as it exits bankruptcy
July 9, 2009 - 9:00AM

General Motors could literally turn green as it readies itself for major management and cultural changes that will coincide with its escape from bankruptcy protection.

People briefed on its plans say the company is looking into changing the background colour of its corporate logo from blue to green in an effort to show consumers that it is leaner and greener, more focused on fuel efficiency and better able to make quick decisions.

Ed Welburn, GM's vice president of design, is leading a group that is studying name and logo changes, but no recommendation has been made, according to one of the people.

Changing the background of the familiar square blue-and-white GM logo has been discussed, said the people, who requested anonymity because no decision has been reached.

What has been decided, though, is the need for management and cultural changes. New CEO Fritz Henderson is preparing to cut another 4,000 white-collar jobs, including 450 executive-level employees such as plant managers or engineering group heads.

Henderson, under pressure from the new GM's largest shareholder, the US government, wants a more nimble company, one that can make decisions faster and is less bureaucratic than the GM of the past.

In the old GM, several committees often reviewed decisions, holding up new vehicles and making it slow to respond to market changes. Designs were often changed from bold to bland, with GM stamping out nondescript cars such as the old Chevrolet Malibu.

With taxpayer dollars and its very existence on the line, GM can no longer afford to take too long.

So Henderson will thin executive ranks by 35 per cent, from about 1300 to 850 by the end of the year. Total US salaried employment will drop by 6150, or 21 per cent, from 29,650 at the start of the year to 23,500 by the end.

The changes could be announced as soon as Friday after the courts clear the sale of GM's good assets to a new company largely owned by the US and Canadian governments and the United Auto Workers union. They will flatten the automaker's organisational chart, eliminating work groups and shrinking the organisation to match a smaller footprint, according to the people briefed on the plan.

The flatter organisation will make it easier for Henderson to hold people accountable for their work, while focusing more on product development and customer service, one of the people said.

The new structure would be similar to one imposed on Chrysler Group LLC by Fiat CEO Sergio Marchionne, who now controls the company. Marchionne shed layers of management.

General Motors Corp. also could announce a subcompact car to be built at a Michigan factory, widely believed to be the four-seat Chevrolet Spark minicar now being sold in China.

GM for years had neglected its small cars, unable to make money on them because of high labour costs. Instead, it focused more on high-profit trucks and sport utility vehicles. Its current entries, such as the Korean-made Chevrolet Aveo subcompact and the US-made Chevrolet Cobalt compact, have not sold as well as top-selling entries from Toyota and Honda.

The new GM, however, is betting that car buyers will shift to small as gas prices swing wildly, and it's trying to upgrade that class of vehicle. The company says lower labour costs and higher sales prices should yield more profits.

GM is also trying to go leaner by selling off its European Adam Opel GmbH unit, as well as Sweden's Saab, and the Hummer and Saturn brands. Pontiac is to be discontinued by the end of the year, leaving GM with only four brands - Chevrolet, Buick, Cadillac and GMC.

Steve Rattner, the head of the Obama administration's auto task force, told reporters earlier this week that GM must adjust to being smaller and less global.

"It would be natural as part of this overall downsising of GM for there to be a change in the management structure to become a bit closer to the ground, a bit leaner and meaner," he said Monday.

The US government is expected to provide about $US50 billion ($63.33 billion) in aid to the automaker as it exits bankruptcy and tries to become profitable even in a depressed world auto sales market. That won't be easy for a company that has lost more than $US80 billion ($101.33 billion) in the past four years.

The cuts will help GM adjust to being a smaller company, but will not make it successful without forceful leadership to change the culture of bureaucratic committees making decisions too slowly, said Harlan Platt, a professor at Northeastern University in Boston who teaches corporate turnarounds.

GM simply must transform itself into a company that makes cars and trucks that people would love to own, Platt said.

"That's great," he said of the cuts.

"But if it doesn't end up with General Motors being transformed, then it's just another step on the way toward the ultimate demise of General Motors."

[ebxr8240]

Spin spin spin...
Tell them what they want to hear !!! Sheesh !!!

[barbarian]

give it another few years more, GM will cease to exist and pull the plug permanently

[XR8putts]

Maybe they'll use invisible ink.