Detroit 3 executives are also working on a backup plan in case the government refuses to provide them with federal loans. GM says that it needs at least $11 to $14 billion in order to operate. According to analysts, cash for GM is already down to that level despite its aggressive cost-cutting measures including selling assets, laying off workers, delaying product development, slashing production and delaying incentive payments to dealers.
Insiders say that GM is working on a ‘plan B’ as a worse-case scenario to keep the company up and running until President-elect Barack Obama takes office in January.
If GM doesn’t get aide, say by this weekend, it will start delaying payments to its suppliers, cut more white-collar jobs and salaries and cut back on advertising. Some say that the cuts could even get into r&d which is the backbone of GM’s success.
According to a source that spoke with Automotive News, GM is set to make”a massive communication to the world” of its plans after Thanksgiving.