General Motors Co. said it has slashed $10.7 billion from annual costs, freeing up money for marketing and vehicle upgrades while boosting CEO Ed Whitacre’s push for a 2010 profit, Bloomberg reported.

The expense cuts include reduced interest payments from the elimination of debt, the offloading of union retiree bills and $6.7 billion from steps such as chopping jobs, getting rid of plants and dropping half of GM’s U.S. brands, according to company documents and Randy Arickx, a spokesman.

The estimate is the first public tally of GM’s savings from a new labor accord and its 2009 bankruptcy compared with the previous year. Uses for the proceeds include spending more on a redesign of the Chevrolet Silverado and GMC Sierra pickups that may cost as much as $1 billion, an executive directly involved with the plan said.

“GM has come to the realization that customers are more perceptive than the old GM used to think,” said Eric Noble, president of CarLab, an Orange, California-based automotive consultant that specializes in product planning. “The only way to win is to gain an advantage in product quality.”

New models still may not be enough to meet Whitacre’s goal of keeping U.S. market share at about 20 percent. Detroit-based GM will have to make up lost sales from shedding 4 of 8 domestic brands, overcome a history of 20 declines in U.S. market share in 23 years and erase any stigma in buyers’ minds from last year’s federal bailout.

Diverting some of the $10.7 billion in savings to refresh GM’s vehicle lineup and lure new buyers is intended to support the strategy set by Whitacre, 68, who added the CEO’s title to his chairman’s duties on Dec. 1.

Investors and U.S. officials are watching because Whitacre has said he wants to repay $5.7 billion in outstanding federal loans by June and that GM may sell stock this year. On Jan. 6, he said he expects “positive net income” in 2010, accelerating predecessor Fritz Henderson’s timeline for a 2011 profit.

The Sierra and Silverado, along with the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade sport-utility vehicles, will receive new styling, more-efficient engines and lighter- materials to improve fuel economy, two executives told Bloomberg. Last updated for the 2007 model year, the trucks and SUVs originally were supposed to get only cosmetic improvements, one of them said.

A spokesman, Pat Morrissey, declined to comment about GM’s plans for truck changes.

GM’s additional resources also will help pay for developing new products such as the Cadillac XTS Platinum concept car, a large luxury sedan that may reach showrooms in 2013 and is intended to compete with models such as Bayerische Motoren Werke AG’s 7-Series.

The XTS probably will include a plug-in hybrid version, one of the executives told Bloomberg.