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General Motors Exits Bankruptcy; New GM to Eliminate 35 Percent of Executive Employment

07/10/2009
General Motors (GM) has exited bankruptcy protection after 41 days and is launching a new company -- also called General Motors -- that it says will be more streamlined, more responsive to customers, and more competitive in the marketplace. A company statement says that the new GM will focus on only four core vehicle brands -- Chevrolet, Cadillac, Buick, and GMC -- and will introduce new vehicles in keeping with customer demand and emphasizing energy-saving technologies. The company will eliminate 35 percent of executive positions, many by the end of this month, and 20 percent of overall salaried positions by the end of this year to remove layers of management and speed decision-making processes. "Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building, and selling great cars and trucks and serving the needs of our customers," says Frederick "Fritz" Henderson, GM's president and CEO. "We are deeply appreciative for the support we have received during this historic transformation, and we will work hard to repay this trust by building a successful new General Motors." The U.S. Treasury Department will own 60.8 percent of the new GM, with the United Auto Workers Retiree Medical Benefits Trust Fund holding 17.5 percent, and the Canada and Ontario governments holding 11.7 percent; the "old" GM will hold the remaining 10 percent. The New York Times quotes senior officials in the Obama administration as saying the government will not micromanage the company, and that the administration hopes to take the company public again sometime next year.
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