Tuesday, July 15, 2008

GM job cuts revealed

It was a long time coming, what with the way things have been going in the US car industry. With sales dropping and oil prices rising General Motors found themselves in unfamiliar territory, when their customers switched from larger SUVs to smaller fuel efficient cars and sales in trucks and semis dropped throughout the US.

And as GM's shares reached their lowest point in the last 50 years, the car manufacture giant announced the closure of 4 factories that produce its larger vehicles, as it opted for the production of what consumers seem to be going for; smaller cars, that are cheaper in the short run and the long run.

GM desperately needs to cut back on costs if it is to remain viable, although executives in the company insist that they do not just want to remain viable, but come out "winners". So, the company is selling its Hummer, it has promised to cut its white collar cost by 20% and is selling assets and borrowing in order to reinvigorate its finances. Meanwhile, GM's stock value has dropped by 60% this year.

I wonder if GM will be able to survive what seems to me like the end of an era, the time of the easy rider. Is it over so soon?


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