General Motors is thus far out performing the estimates of their own viability plan that was conceived before their June bankruptcy, according to Automotive News. “I’m not going to get into whether we’re generating cash or not generating cash, but I would certainly say the situation is more stable than what the outlook was even just two months ago,” Henderson told the press.
The plan as it was originally outlined, called for the stabilization and rebounding of GM on the backs of four core brands; Chevrolet, Cadillac, Buick, and GMC, and called for a 19.5 percent share of the market in 2009. The plan also called for drastic cost cutting as their North American structural costs would decline from $30.8 billion in ’08 to $23.2 billion ’10.
“GM’s total U.S. sales through October are down 34 percent to 1.7 million. GM’s sales for October were up 5 percent to 176,632. And 95 percent of those sales were from the four core brands,” said the Article. CEO Fritz Henderson says that while the current data is not great, it shows stability and indicates effectiveness of the original strategy.
The article also mentions that “Henderson said he is confident in GM’s ability to repay the $50 billion in financial support to the U.S. government. He said GM has a greater ability now to generate value in its stock than it did in the past because it has a stronger balance sheet and fewer liabilities such as health care expenses.”
– By: Stephen Calogera