GM to cancel dividends, cut more jobs
General Motors Chairman and CEO Rick Wagoner speaks to reporters after GM's 2008 annual shareholders meeting in June.
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Kai Ryssdal: A longer slowdown is not good news for a lot of American companies, chief among them today General Motors. Just six, short weeks ago GM announced a major restructuring in the face of falling sales and rising gas prices. Today CEO Rick Wagoner was talking to employees and analysts again with a new plan for saving even more money. We asked Marketplace's Alisa Roth to find out what exactly is going on in Detroit.
Alisa Roth: The word of the day at GM: cash. Or as the CEO, Rick Wagoner, calls it, liquidity.
Rick Wagoner: Obviously, as we look at the developments here in the U.S., our focus on liquidity has sort of been first among all of our priorities and remains that. And, hence, this series of actions we're announcing today.
To keep more cash in its pockets, GM is cutting costs by $10 billion. It's cancelling dividends, cutting white-collar jobs, getting rid of health care for salaried retirees, and closing down truck plants even faster than originally planned. Bob Schulz is with Standard & Poor's. He says all those cuts are heading toward one critical goal:
Bob Schulz The biggest thing that these domestic automakers face is adjusting their mix of vehicles to what the consumer wants. And the U.S. consumers are ahead of where almost all the automakers are in terms of their product line-up.
GM and its competitors, even Toyota, are trying to catch up with their customers. The question is whether they're fast enough to do it before the cash runs out.
In New York, I'm Alisa Roth for Marketplace.