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GM Says ‘Business As Usual’ is Over

The 100-year-old General Motors was reborn Thursday after a historic rush through bankruptcy that lasted all of 40 days.

GM CEO Fritz Henderson Thursday morning announced changes to the company's management structure that, he said, will allow the company to move more nimbly going forward. He promised that "business as usual is over."

"The last 100 days has shown everyone, including ourselves, that a company not known for quick action can in fact ... move very fast," Henderson said. "Starting today we want to take that intensity, the decisiveness and the speed of these last several weeks and then transfer it from the battlefield triage of the bankruptcy process to the day-to-day operation of the new company.

"This will be the new norm of the General Motors."

Henderson announced that he is axing two leadership boards in an effort to speed day-to-day decision-making.

He will replace them with a single, eight-person executive committee that will meet weekly to focus on business.

The company will end its regional operations structure.

This means Nick Reilly will become executive vice president of GM International Operations based in Shanghai.

Henderson will take over responsibilities for GM's North American operations as the company eliminates the position of its North America president - leaving Troy Clarke's future unclear.

Bob Lutz will not retire as previously announced and instead will stay as vice chairman of creative elements of products and customer relationships.

In essence, he is charged with shaping the company's marketing message, something experts have said is one of the biggest challenges ahead for the company.

"The key challenge is going to be on the marketing side," Art Spinella, president of CNW Marketing Research, said. "That would be to convince the consumers of two things: No. 1, that the products are good and, No. 2, that the company is around and healthy."

As part of flattening the management structure, the company is in the process of cutting its white collar ranks by 4,000 and cutting the executive ranks by 35 percent.

Henderson said he had a "number of moves to make" in the coming weeks.

Bankruptcy Judge Robert Gerber approved the sale of GM's assets to create a new GM last Sunday, an order that was held until Thursday to allow opponents enough time to object.

With the order expired at noon Thursday, GM and the U.S. Treasury rushed to finalize paperwork to close the asset sale.

Those documents were finalized at about 6:30 a.m. this morning.

The new GM is largely owned by the U.S. Treasury.

The federal government pumped about $20 billion into GM to keep it afloat and has promised about $30 billion more to restructure.

The new GM will be 60.8 percent owned by the U.S. government, with the UAW retiree health-care trust holding 17.5 percent, the governments of Canada and Ontario governments 11.7 percent and old GM bondholders 10 percent.

The old parts of GM that will remain in bankruptcy court will be known as "Motors Liquidation."

The transaction allowed GM to wipe away more than $40 billion in debt.

The new GM will have about $11 billion in U.S. debt. Company officials say GM is being restructured to have a lower-break even point that will allow it to weather the uncertain economy.

The new GM will keep four of GM's eight U.S. brands - Chevrolet, Cadillac, Buick and GMC.

The company will go from 47 factories to 34 by the end of 2010. Overall, U.S. employment will go from 91,000 at the end of 2008 to 64,000 at the end of this year.

"We have the important parts of the business necessary to make the company great again," Henderson said.

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