General Woes
Just selling more cars may not be enough for the troubled automaker
For all those woes, GM's biggest problem is the one it is saying the least about. For several months the automaker has been negotiating with the United Auto Workers over a long list of sensitive issues--reducing healthcare benefits, closing plants, and slimming its workforce. In addition to building cool new cars and regaining some verve in the marketplace, GM still needs to aggressively cut costs and downsize its vast manufacturing footprint. And that falls heavily on the company's blue-collar workers.
GM's contract with the union expires in 2007, but CEO Wagoner has insisted GM needs concessions sooner, to cut capacity, improve productivity, raise margins, and become competitive once again with importers firing on all cylinders. The union, skeptical of Wagoner's claims of financial distress, has hired several New York investment bankers to examine the company's condition. At a conference for investors last month, Wagoner said virtually nothing about the negotiations, except that GM will continue to face a "tough, challenging market" in 2006. If there's any good news for the company, say cynics in Detroit, it may be that you no longer have to work for the company to get the employee discount.
GM AT A GLANCE
Though likely to post a huge loss this year, GM is still the world's biggest carmaker.
Founded: 1908
CEO: G. Richard Wagoner Jr.
2004 annual revenue: $193 billion
2005 net income: loss of $1.4 billion (through June 30)
Total employees: 317,000
Countries where GM cars are sold: 200
U.S. assembly-line workers: 109,000
U.S. brands: Buick, Cadillac, Chevrolet, GMC, Hummer, Pontiac, Saab, Saturn
Number of U.S. dealerships: approximately 7,500
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