General Motors Corp. (GM) Monday revealed an updated Viability Plan that would speed the reinvention of the company's U.S. operations into a leaner, more customer-focused, and more cost-competitive automaker. The Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes. revised Plan accelerates the timeline for a number of important actions and makes deeper cuts in several key areas of GM's operations.
According to GM, the significant changes include focus on four core brands in the U.S. - Chevrolet, Cadillac, Buick and GMC - with fewer nameplates and a more competitive level of marketing support per brand, more aggressive restructuring of GM's U.S. dealer organization to better focus dealer resources and Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants. The changes also include Lower structural costs, which GM North America projects would enable it to breakeven at a U.S. total industry volume of approximately 10 million vehicles.
The Pontiac brand would be phased out by the end of 2010. GM would offer a total of 34 nameplates in 2010, a reduction of 29 percent from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries. The Viability Plan also reduces GM's market share projections to adjust for the impact of the brand and dealer consolidation, as well as for the short-term impact of speculation regarding a GM bankruptcy. The plan assumes a 19.5% share in 2009, with share stabilizing in the 18.4% to 18.9% range in subsequent years. The Viability Plan also lowers GMNA's breakeven volume to a U.S. annual industry volume of 10 million total vehicles, based on the pricing and share assumptions in the plan.
Further, as a result of the actions, GM North America's structural costs are expected to decline 25%, from $30.8 billion in 2008 to $23.2 billion in 2010.
Separately, GM said it is commencing public exchange offers for $27 billion of its unsecured public notes. GM is offering to exchange 225 shares of GM common stock for each 1,000 U.S. dollar equivalent of principal amount of outstanding notes and is offering to pay, in cash, accrued interest on the GM notes from the most recent interest payment date to the settlement date. Each of the exchange offers and consent solicitations would expire on May 26, 2009.
In the event that GM does not receive prior to June 1, 2009 enough tenders of notes to consummate the exchange offers, GM currently expects to seek relief under the U.S. Bankruptcy Code. GM also said it is considering its alternatives in seeking bankruptcy relief in consultation with the U.S. Treasury.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.