‘Important changes’ await GM

The date of the Cruze launch is again being questioned.

STAFF REPORT

Speculation is building that General Motors is announcing major cuts today.

GM will release its third-quarter earnings report this morning and then hold a conference call with industry analysts and the media to review steps it’s taking to preserve its cash reserves.

Media reports indicate those could include laying off more salaried staff and cutting benefits.

CNBC.com reported Thursday that GM will announce that it is saving money by delaying the launch of many new models. This could affect the Lordstown complex because it is preparing to launch GM’s next compact car, the Chevrolet Cruze, in 2010.

Automotive News, a trade magazine, and BusinessWeek reported last month that the Cruze launch was being pushed back one year to 2011.

Analysts have said that GM is burning through its cash so quickly that it won’t have enough money to run its daily operations by sometime next year.

An internal e-mail obtained by The Detroit News warns GM executives that “important changes” are going to be announced today. It doesn’t give specifics but said GM must face challenges “brought on by the volatile global economic situation.”

In October, however, executives informed employees that they were considering cutting more white-collar jobs, including involuntary layoffs, later this year and early next year, as well as suspending the company match in employee 401(k) retirement accounts and making other benefit cuts.

GM already has cut 5,000 salaried jobs.

Industry analysts are saying more plant closings could be part of GM’s announcement.

The Associated Press reported that people briefed on GM plans say the company will not announce any new plant closures. But the automaker still plans to announce factory job cuts, likely through shift reductions and temporary plant shutdowns as U.S. auto sales continue to tumble.

GM last summer put forth a plan that included cutting $10 billion in costs by the end of 2009 and raising $5 billion through asset sales and borrowing, but the nation’s economy has slowed since then, and auto sales have dropped dramatically.

GM’s announcement is expected to include a large quarterly loss.