P&A Providers & Administrators
MenuMENU
SearchSEARCH

G.M. Sees Cost Cuts Continuing for Years in Effort to Sustain Long-Term Growth

August 9, 2011
3 min to read


DETROIT — General Motors, already much leaner and more efficient after going through bankruptcy and a painful reorganization, still has to undertake years of sharp cost cuts to ensure it remains profitable, its executives said Tuesday.


G.M. executives said that they intended to cut the number of different platforms and engines used in the company’s vehicle lineup roughly in half within the next decade, reported The New York Times.

Ad Loading...


By 2018, G.M. will use 14 different platforms globally, down from 30 last year. A platform is the basic underpinnings of a vehicle, and building multiple vehicles on a single platform reduces development and production costs.


The executives also said G.M. was working to eliminate wasted spending on new products by keeping its investments more stable from one year to the next, rather than trying to follow the ups and downs of the market


“The start-stop, herky-jerky, on-again, off-again product development was grossly inefficient,” the chief executive, Daniel F. Akerson, said, “and it resulted in poor product.”


The plans, outlined at an analyst conference that G.M. organized at its Detroit headquarters, call for using 12 engine families by 2018 and eventually just 10, compared to 20 in 2009.


Daniel Ammann, the chief financial officer, said G.M. had been putting about $1 billion a year into projects that were later canceled.

Ad Loading...


Last week, G.M., which is 26 percent government-owned, reported that it earned $5.4 billion in the first half of the year as second-quarter earnings grew 89 percent. Its profit margins have increased as a result of higher revenue as well as wrenching cost cuts that included closing many plants and eliminating tens of thousands of jobs.


On Tuesday, the company said that its annual manufacturing labor costs in the United States had fallen by $11 billion since 2005. The executives added that they were working to keep labor costs under control, even as demand for G.M. vehicles increased.


Diana Tremblay, G.M.’s global chief manufacturing officer, said the company did not need to add plants anytime soon, even though its capacity utilization rate — a measure of how fully and efficiently plants are used — was near 100 percent. G.M. is particularly hesitant to add production capacity in the United States during a time of such volatile economic and market conditions. Ms. Tremblay said that G.M. could meet demand largely by adding shifts, running plants on overtime and finding creative ways to run existing plants more efficiently.


Leaders of the United Automobile Workers union, which is negotiating a new contract with G.M., could have a difficult time persuading the automaker to reopen idled plants in Tennessee and Wisconsin. They are also trying to prevent the planned closing of a plant in Louisiana, a top priority during the talks.


Mr. Akerson expressed some doubt about whether total industry sales across the country would reach 13 million vehicles this year. G.M. and other automakers had generally projected sales between 13 million and 13.5 million, up from 11.6 million in 2010; from January through July, the industry sold 7.4 million vehicles.

Ad Loading...


“There’s a lot of turmoil in the business and turmoil means uncertainty,” Mr. Akerson said, “so we’re a little unsure of these numbers.”

More Industry

Kia Niro SUV in gold color parked outdoors
Industryby Hannah MitchellSeptember 1, 2026

Kia Closes Out Summer With a Bang

Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.

Read More →
Outside of Auto Park Ford dealership
Industryby Lauren LawrenceSeptember 1, 2026

Indiana Dealership Changes Hands

A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.

Read More →
Three men standing in front of two classic cars handing off gift.
Industryby Hannah MitchellAugust 25, 2026

Texas Dealership No Longer in the Family

The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.

Read More →
Ad Loading...
Outside of modern car dealership “Genesis of San Bruno
Industryby Lauren LawrenceAugust 25, 2026

Genesis Grows California Presence

The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.

Read More →
Red Honda Civic hybrid sedan on two lane road with green hills in background
Industryby Hannah MitchellAugust 21, 2026

August Auto Sales a Mixed Bag

An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.

Read More →
EV charger inserted into dark-colored car port
Industryby Hannah MitchellAugust 18, 2026

EV Market Humming Along

July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.

Read More →
Ad Loading...
car in background with hand giving a thumbs up in front
Industryby Lauren LawrenceAugust 14, 2026

Auto Loan Delinquency Rates Stabilize

Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.

Read More →
blue sky, yellow and orange rollercoaster with riders going up an incline
Industryby Lauren LawrenceAugust 12, 2026

EV Sales Recover in Q2

The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.

Read More →
Photo of blue Toyota Prius parked next to body of water with city skyline in background
Industryby Hannah MitchellAugust 5, 2026

The Cheapest Hybrids to Fuel

The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.

Read More →
Ad Loading...
white SUV parked in front of a body of water with a gray sky background
Industryby Lauren LawrenceAugust 5, 2026

Hybrids and SUVs Gaining Ground

The most recent Kelley Blue Book Brand Watch found that only two nonluxury brands increased in shopper consideration, buoyed by their hybrid and SUV offerings.

Read More →