GM To Cut More Plants, Closing In On HUMMER Deal
is about to get smaller, faster.
Today on the company conference call updating its restructuring, I asked GM CEO Fritz Henderson is the company will go beyond the number of plants it laid out for closure when updating the Federal Government on February 17th. Henderson says GM will likely close more plants, though he would not say when that announcement will take place. The CEO says the goal is to increase the capacity utilization of the plants.
To put GM's new cuts in perspective, consider how the company's plans have changed.
* December Plan: Reduce GM's powertrain, stamping and assembly plants from a 2008 level of 47, down to 38 by 2012.
* February Plan: GM said it will drop another 5 plants by 2012 bringing the total down to 33.
* April/May Plan: GM now says it will close even more plants and do it even sooner.
What does all of this say about the GM we will see once it is through restructuring either in or out of bankruptcy?
Look for the auto maker to be far leaner, with fewer employees, and likely with a reduced product line-up. Chevy, Cadillac, and Buick are definitely going to stick around. Buick stays largely because of it's strength in China and Asia, which are critical to GMs growth in the future. Henderson says speculation that GM will drop the GMC brand is just that, speculation. He added that GM has not changed its plan to grow around four core brands, with Pontiac as a niche brand.
As for HUMMER, three suitors are expected to file final bids next week and a decision will come shortly after that. My sources familiar with the talks say HUMMER will sell for $100-$150 Million dollars. A fraction of what GM could have collected if it sold the brand at the height of HUMMER-mania a few years ago.
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