GM CFO: Company-Wide Cost Reductions Are Working
14 March 2009 - 3:28AM
Dow Jones News
General Motors Corp. (GM), after slashing costs deeper than
anticipated this year and negotiating a money-saving labor deal
with its Canadian union, will turn its attention to winning
additional government aid as it works to avoid a bankruptcy, the
company's finance chief said.
GM Chief Financial Officer Ray Young, in a video on GM's Web
site, said the company is responding to frequent requests for
information from President Barack Obama's automotive task force.
The group, which visited Detroit on Monday, will determine whether
GM and Chrysler LLC get the $21.6 billion in additional loans the
companies say they need to stay afloat.
GM has received $13.4 billion since December; Chrysler got $4
billion.
GM on Monday told the task force it can survive for now without
the $2 billion the auto maker initially said it would need in March
to avoid running out of cash. "When we look at the first two months
of results, we're seeing our company-wide cost reductions are
working," Young said.
He said the company is working closely with the task force as it
weighs auto maker aid requests.
"We're working with their staff in order to help them arrive at
some conclusions as to how they're going to help support the
automotive industry in the United States," he said.
He said a deal ratified on Wednesday by the Canadian Auto
Workers union will get Canadian labor costs almost in line with the
company's U.S. operations.
The new deal freezes wages for active workers and pension
payments for retirees. Workers will get less time off and forgo
cost-of-living pay increases. In addition, retirees for the first
time will make co-payments for health care.
GM now hopes to secure loans from the Canadian government, which
has said it would only deliver aid if GM cut labor costs.
-By Sharon Terlep, Dow Jones Newswires; 248-204-5532;
sharon.terlep@dowjones.com.