Detroit automakers are busy putting the final touches on its Congress-bound revitalization plans, but all three automakers are also making plans in the event government loans are turned down. GM
has a back-up plan, and it reportedly includes more factory closures, white-collar cutbacks, further slashed marketing budgets, and delayed product introductions. Automotive News
is reporting that cuts also could hit research and development, which would further hurt the General's ability to compete for global vehicle sales. That's not a good option, but we're guessing it's better than running out of cash and declaring bankruptcy.
GM has already taken billions of dollars out of of its operating costs over the past year, with thousands of job and production cuts, plant closings, and the sale of non-core assets. Those actions were thought to be enough to stem the General's cash burn, but when car sales came to a screeching halt in the third quarter, it became apparent that more serious reductions were needed. GM, Ford
, and Chrysler
go back to Congress on December 8th to plead its case for low cost government loans. If that meeting goes as well as the first one
, plan B may actually see the light of day.
[Source: Automotive News
- subs req'd]