GM: Big Cutbacks but Important New Model Blitz Ahead

This past week has not been a good one for General Motors. After the Generals’ stock hit a low of $9.63 per share, CEO Rick Wagoner announced a new action plan that will immediately help to make the brand more profitable, and more importantly, stave off rumors of bankruptcy.

Much of the savings will focus on reductions in salaries and labor costs. Salaried employees’ expenses will be slashed by 20-percent by way of retirement, voluntary separations, buyouts and more; salaried employees’ health care will be limited in retirement to age 65, and bonuses will be cut.

Delaying V8 programs and the redesign of slow-selling full-size SUVs and pickup trucks is expected to save $7 bn, and GM hopes to raise between $4 and $7 bn through sales of assets. The Hummer brand is one of those possibilities.

Some analysts consider such cuts key to key to the survival of the automaker, although Wagoner depicted it not so much as a survival plan, but a winning strategy.

Wagoner also put strong emphasis on upcoming products in a memo shared with employees. We already reported about the Volt being fast-tracked for 2010, and the new Camaro was just recently revealed, but there’s more in store. The CTS Coupe, for instance, is getting the green light and will be on assembly lines starting next summer, and the wagon of the same car will enter production this spring.

Also on the way is the second generation Chevrolet Equinox and its GMC compatriot, the Terrain (Torrent name is dead) which will feature a 2.3-liter direct-injected four-cylinder as a standard powerplant for improved fuel efficiency. Buick’s rear wheel drive Invicta is on the way sooner than you might think too - production is scheduled to start this winter, and the car will be available this spring. And the new Cadillac SRX and Saab 9-4x crossovers will be available in 2010.