General Motors, not wanting to face the fate of bankruptcy, is scaling back with an overall $15 billion cost-cutting program, as reported by Mike Harris of The Associated Press. Speedway Motorsports Inc., which owns eight tracks that hold NASCAR events, already has been told GM will not renew contracts at two tracks — New Hampshire Motor Speedway and Bristol Motor Speedway. In addition, the company has suspended its stock dividend, another huge blow to investors who have seen their shares dip to the lowest prices in fifty years. And finally, to reward those employees who have stood by the company through its trials and tribulations, The Street is reporting that they will no longer offer health care to retirees, effective January 1, 2009.
However, depsite the gloom and doom that has been haunting the automaker, the company is remaining optimistic with their plans for the upcoming year. A story in the Baltimore Sun reports that GM’s sales fell 16 percent in the first half of the year, with trucks off 21 percent and cars down nearly 9 percent. GM Prez Fritz Henderson says that for the company to succeed, they must repair their car brand image and “steer” away from trucks (pun intended.) The Chevrolet Malibu has seen its sales increase a whopping 46 percent in the first half of the year, even though the new and improved quality and style resulted in an MSRP increase of $4000. Eighteen of the 19 vehicles GM will unveil between now and 2010 will be cars or crossovers, including a smaller Cadillac.
The manufacturer is also kicking the clunky Cobalt to the curb, replacing it with the sleek Cruze, a little powerhouse with a 1.4 liter turbo-charged four-cylinder engine that will allow it to get a fantastic 45 miles per gallon. The Cruze is coming to a GM dealer near you in 2010.