General Motors Corp., which has seen its shares fall to 1950s-lows in recent weeks on fears of a slowing economy and due to its overreliance on gas-guzzling trucks and SUVs, got a boost Monday from a Wall Street Journal
story reporting that the automaker is looking to cut thousands of white-collar jobs and could sell or axe some of its brands.
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Though impossible to prove that the story was based on an internal leak designed to reverse a stock that has lost two-thirds of its value this year, the use of corporate-speak like "nothing is off the table" could certainly leave a cynic with that impression. Detroit-based GM could use the lift, as its stock decline has raised new talk that the automaker could come under pressure from activist investors looking to alter or accelerate its restructuring plan or replace its management team.
Selling or cutting brands has been discussed for many years, with billionaire investor Kirk Kerkorian and many less-prominent watchers suggesting the automaker back some combination of Saab, Saturn, Buick and Pontiac out of the garage. So far, however, the automaker's Hummer unit is the only one to officially go on the block.
While GM has traditionally been loathe to surrender whatever marketshare those brands have, the company's newfound focus on profitability regardless of marketshare, coupled with high costs associated with differentiating a wide number of brands, could lead to action. - Lou Whiteman
See Wall Street Journal story
See TheDeal.com story on GM's vulnerability
See TheDeal.com story on GM putting Hummer on the block
