General Motors 2010 Annual Report Download - page 33

GENERAL MOTORS COMPANY AND SUBSIDIARIES
Old GM also commenced discussions with the UST regarding the terms of a potential restructuring of its debt obligations under the
UST Loan Agreement, the UST Ally Financial Loan Agreement (as subsequently defined), and any other debt issued or owed to the
UST in connection with those loan agreements pursuant to which the UST would exchange at least 50% of the total outstanding debt
Old GM owed to it at June 1, 2009 for Old GM common stock.
Old GM commenced discussions with the UAW and the VEBA-settlement class representative regarding the terms of potential
VEBA modifications.
Other Cost Reduction and Restructuring Actions
In addition to the efforts to reduce debt and modify the VEBA obligations, the Revised Viability Plan also contemplated the
following cost reduction efforts:
• Extended shutdowns of certain North American manufacturing facilities in order to reduce dealer inventory;
• Refocus of resources on four U.S. brands: Chevrolet, Cadillac, Buick and GMC;
• Acceleration of the resolution for Saab, HUMMER and Saturn and no planned future investment for Pontiac, which was
phased out by the end of 2010;
• Acceleration of the reduction in U.S. nameplates to 34 by 2010 — there were 34 nameplates at December 31, 2010;
• A reduction in the number of U.S. dealers was targeted from 6,246 in 2008 to 3,605 in 2010 — we have completed the federal
dealer arbitration process and reduced the number of U.S. dealers to 4,500 at December 31, 2010;
• A reduction in the total number of plants in the U.S. to 34 by the end of 2010 and 31 by 2012 — there were 40 plants in the
U.S. at December 31, 2010; and
• A reduction in the U.S. hourly employment levels from 61,000 in 2008 to 40,000 in 2010 as a result of the nameplate
reductions, operational efficiencies and plant capacity reductions — through these actions, our special attrition programs and
other U.S. hourly workforce reductions, we have reduced the number of U.S. hourly employees to 49,000 at December 31,
2010.
Old GM had previously announced that it would reduce salaried employment levels on a global basis by 10,000 during 2009 and
had instituted several programs to effect reductions in salaried employment levels. Old GM had also negotiated a revised labor
agreement with the CAW to reduce its hourly labor costs to approximately the level paid to the transplant automakers; however, such
agreement was contingent upon receiving longer term financial support for its Canadian operations from the Canadian federal and
Ontario provincial governments.
Chapter 11 Proceedings
Old GM was not able to complete the cost reduction and restructuring actions in its Revised Viability Plan, including the debt
reductions and VEBA modifications, which resulted in extreme liquidity constraints. As a result, on June 1, 2009 Old GM and certain
of its direct and indirect subsidiaries entered into the Chapter 11 Proceedings.
In connection with the Chapter 11 Proceedings, Old GM entered into a secured superpriority debtor-in-possession credit agreement
with the UST and EDC (DIP Facility) and received additional funding commitments from EDC to support Old GM’s Canadian
operations.
General Motors Company 2010 Annual Report 31