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Jamie LaReau and Robert Sherefkin Automotive News
DETROIT -- General Motors is postponing nearly all of its spending on product development in 2009 and 2010 -- a cost-cutting move that could delay the introduction of key vehicles such as the Chevrolet Cruze.The automaker also is cutting spending on engineering, design and r&d, say sources familiar with GM's plans. So far, nothing has been officially canceled, but nearly everything is delayed, the sources say.
"The 2009 stuff that's too late to cancel is coming out, then everything else gets pushed out anywhere between three months and up to a year," said one of the sources. "It's not just capital budget; it's also engineering, design ... everything that would cause money to flow out in 2009."
They are now playing for bailout money. I expect to see amny companies in trouble go this route. It is the exact oppostie of the line they were putting out before the bai9lout started;so you judge.In the end I really doubt without alot of management changes and alot of layofffs and contrct modifications to include lowering pension cost that it will work.
Why would Toyota buy GM? It has no need for any part of GM except maybe trucks, but that alone is not worth the costs of merging.
The end result will be the gov't keeping GM afloat while it retools, GM continuing to make better vehicle and shrinking market share, and after a generation, become healthy again. That's the best case scenario imo.
GM has 10,000 dealerships, Toyota has 1,000. Think of the overhead cost right there. GM is down to the 20s for market share, but its infrastructure has not shrunk with its market, so now its outlaying $1B/month more than it makes. Look for the gov't to throw it a $20B lifeline to keep it in business, and save the company and the hundreds of thousands of people who rely on an American auto industry for jobs.
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