General Motors Corp. hopes to emerge from bankruptcy as a leaner, greener company armed with a lineup of vehicles that can compete with a growing roster of global rivals.
The big question is whether that formula adds up to a return to profitability - or simply delays the company's eventual collapse into insolvency.
On Monday in New York, where GM filed for Chapter 11 bankruptcy protection, Chief Executive Fritz Henderson outlined an operating plan that he said would restructure the century-old automaker with "pure, unadulterated speed." The new General Motors will be dramatically diminished compared to the industrial giant that once embodied American capitalism.
By shedding dealerships and vehicle brands, eliminating employees and plants, selling overseas units and learning to live with a fraction of its former market share, GM lacks the heft to vie for the crown of the world's largest auto company.
It may not even remain the biggest automaker headquartered in America, where it once accounted for more than half of all cars sold. Rival Ford Motor Co., which hasn't accepted government bailout money, may slide into that spot while GM struggles to regain its financial footing.
"GM will be trimmed down in almost every respect," said Michael Robinet, vice president of consulting firm CSM Worldwide. "And they're not using scissors. They're using a hatchet."
The goal, Henderson said, is to enable the automaker to break even on a cash flow basis when total U.S. vehicle sales hit 10 million a year, well below the 15 million to 17 million levels recorded during much of the past decade. U.S. sales currently are on pace to total around 9.5 million this year.
GM will sell or shut down four of the brands it sells in the U.S. - Pontiac, Hummer, Saturn and Saab. Pruning these marques, which accounted for 17 percent of the 2.9 million cars and light trucks GM sold in the U.S. last year, would leave the automaker with Chevrolet, Cadillac, Buick and GMC to stock its North American showrooms.
The move will allow GM to marshal its product design, quality control and marketing efforts behind a smaller number of new vehicles each year, improving the chances of striking a chord with consumers. "By focusing on four core brands ... we have the best chance of making every one of those new launches pay," Henderson said.
