With federal bailout money up in the air, General Motors is developing a ‘Plan B’ in case funding doesn’t come through. The automaker has already drastically slashed spending, but more cost-cutting measures could be on the way as GM tries to survive the current economic downturn.
In order to stave of Chapter 11 bankruptcy filing GM has already sold off part of its stake in Suzuki , announced several job cuts, delayed new product introductions and cut back production, particularly of large trucks and SUVs. But those measures might not be enough if the Detroit-based automaker doesn’t get help from Capitol Hill soon.
If the Detroit bailout doesn’t get passed by Congress next month, GM has a Plan B waiting in hand, according to Automotive News. Plan B would mean further and deeper cuts, including delaying payments to suppliers, announcing more white collar job cuts, slashing marketing spending and possibly even cutting spending on research and development – a move that would severely impact GM’s future product offerings.
Although GM’s Plan B would probably be enough to keep the company from going belly up in the short term, it is by no means a way to carry the company into the future. GM could devise all the backup plans it wants, but it sounds like the only thing that will keep the automaker in business is some kind of federal aid.
