by wildcherry on Wednesday, February 18th, 2009 | Business, News

GM said its 117-page plan would “contribute materially to the national interest” by developing advanced technologies and vehicles to cut greenhouse gas emissions and oil dependency.

Other aspects of the plan included:

BRANDS, MANUFACTURING PLANTS

The plan focuses on the company’s three strongest global brands — Chevrolet, Cadillac and Buick, as well as its GMC truck brand. Specifically, 36 nameplates or models will be offered in 2012, four less than in GM’s December plan.

GM aims to cut the number of manufacturing plants to 33 in 2012, rather than the 38 it forecast in December, from 47 at the end of 2008.

The company is in talks with Sweden’s government about the sale of the Saab business. “While GM is hopeful that an agreement can be reached with the Swedish government to support this direction, the Saab Automobile AB subsidiary could file for reorganization as early as this month,” GM said.

GM said it plans to phase out the Saturn brand at the end of the current product lifecycle, although it would be open to a spin-off or sale of Saturn.

JOBS

U.S. employment will fall to 72,000 by 2012 from 92,000 hourly and salaried employees at the end of 2008, GM said.

Worldwide, GM expects to cut 47,000 jobs over 2009.

DEALERS

GM aims to cut the number of dealerships by 25 percent — to 4,700 by 2012 from 6,246 in 2008, the plan said.

It will accelerate the reshaping of its dealer network in major markets to boost volume in better locations. In small markets, a cut in dealerships will come mainly from normal attrition and from dealer-initiated consolidations, it said.

LABOR COSTS

GM wants to reach an agreement in principle with its labor unions by the end of 2009 to cut costs to the level of foreign competitors with U.S. plants.

A tentative agreement to modify the UAW labor agreement is subject to ratification by union members.

BONDHOLDERS

The plan assumes GM will save about $1 billion in annual interest expenses based on the conversion of two-thirds of the company’s outstanding unsecured public debt to equity.

“A successful bond exchange will require several key elements and events to fall into place in order to avoid a bankruptcy filing,” GM said. “The company remains convinced bankruptcy would be protracted with a significant possibility that exit would not be achieved.”

TECHNOLOGY LOANS

GM expects to receive a total of $7.7 billion in U.S. Energy Department advanced technology loans.

ASSET SALES

The plan assumes the sale of AC Delco’s independent aftermarkets business and a transmission plant in France for total estimated proceeds of $1.5 billion in 2009.

Negotiations are “well under way with potential purchasers” but if the sale is delayed, or generates less in proceeds, GM said it will need additional liquidity in 2009.

FOREIGN GOVERNMENT AID

GM said it expects to receive about $6 billion in assistance from foreign governments by 2010.

BANKRUPTCY RISK

GM said a bankruptcy filing would present a “considerable” systemic risk to the automotive industry and to the overall economy, just as the Lehman Brothers bankruptcy had a ripple effect last year. “Many of the liabilities that could be impaired in a traditional bankruptcy process could have the effect of shifting those liabilities to the U.S. government.”

The plan considered scenarios for a pre-packaged Chapter 11 filing, and a pre-negotiated cramdown plan, concluding that revenue losses for either one offset the incremental liabilities that would be wiped out by a bankruptcy filing.

GM’s plan was posted on the Treasury Department website at: www.treasury.gov/initiatives/eesa/agreements/auto-reports/GMRestructuringPlan.pdf

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