SHREVEPORT, LA (KSLA) - General Motors announced Monday it's cutting 23,000 jobs by 2011 as part of a massive restructuring proposal to avoid bankruptcy.
CEO Fritz Henderson says the restructuring will make GM leaner and more customer-centric. "It's about getting us focused. I'm much more focused on getting results as opposed to being big."
The automaker hopes to repay bondholders and the U.S. Treasury with stock, giving U.S. taxpayers a controlling stake in the company in exchange for canceling half of it's government loans. The proposed restructuring plan calls for General Motors to be majority-owned by the federal government and the United Auto Workers, through the Voluntary Employees' Benificiary Association (VEBA).
They'll also close three more factories and speed up the six shutdowns that were announced in February, reducing the total number of assembly, stamping and powertrain plants in the U.S. from 47 to 34 by the end of 2010 and to 31 by 2012. There are still no details about which plants will be affected.
In a statement Monday afternoon, a company spokesperson told KSLA, "Significant work remains to finalize labor cost, footprint, manpower and the VEBA. It would be premature to announce specifics to cease operations at our plants until this work is complete."
GM is also dropping its Pontiac brand, news that came as a bit of a surprise to Mike Morgan Pontiac Vice President and co-owner, Keith Marcott, "We were kind of shocked at that because we sell a good number of Pontiacs. It's done very well. "
The Pontiac will be phased out by the end of the next year. "We just didn't have a strategy that we were satisfied with that could allow us to win with the Pontiac brand," says GM CEO Fritz Henderson.
GM says it will focus on it's four remaining core brands: Chevrolet, Cadillac, GMC and Buick. That's where Keith Marcotte finds a silver lining. "We are also excited about the fact GM is stating there there will be some expansion of the Buick lineup. So what we may lose possibly in the Pontiac, we could gain back in Buick. So we're very much excited about new stuff coming down the pike, that way.
As for customers who drive Pontiacs, Marcotte says, "It really doesn't mean anything other than we will be here to provide sales, service, and all the different things they need to keep their car running, whether it be involved in an accident or warranty work or customer pay work or anything, we will be here to satisfy their needs."
Marcotte is also confident his dealership will make the cut as GM reduces its dealership ranks, and doesn't see an impact on jobs. "We still have two stores that do sell the GMC and the Buick franchises. We've also been informed that GMC will continue to stay very much healthy and viable. We look forward to that. That is the bulk of our business at the present time."
The company plans to cut dealerships by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605. When asked how GM would accomplish that, CEO Fritz Henderson would say only that the company would be making offers to the dealers in the coming weeks.
Mark LaNeve, vice president of North American sales and marketing, said a big chunk of the dealership reduction - about 450 - would come with the elimination or sale of Saturn, Hummer and Saab. GM would then look to end relationships with dealers that do only a small volume of business with GM, and then move on to other dealers, he said. "We've got a cadence plan to it," he said. "I don't want to get rid of any dealers," LaNeve said, but acknowledged that that GM has had more dealers than it needs for quite some time.
GM face a June 1st deadline to come up with a viable business plan or file for bankruptcy.