Maybe there’s light at the end of the tunnel for GM

General Motors, which has borrowed $13.4 billion from the federal government since December to keep itself out of bankruptcy, said today that it had withdrawn a request for an additional $2 billion that it thought was needed to stay alive through the end of this month.

Good news… may be.

This withdrawal of their request does not mean that GM is withdrawing their other planned draws from their approved loan account. Their plan calls for $2.6 billion in April, 2009 and at least $4.5 billion in 2010. GM also wanted access to another $7.5 billion, if needed, bringing their loan request to a total of $30 billion.

So, what is GM doing to improve their bleeding of cash? GM’s 117-page restructuring plan submitted to the Treasury Department February 17, 2009 gave a glimpse. GM is committed to focus its resources primarily on its core brands: Chevrolet, Cadillac, Buick and GMC. Of the remaining brands, Pontiac—which will be part of the Buick-Pontiac-GMC retail channel—will be a highly focused niche brand. GM plans to reduce the number of nameplates (or models of cars and trucks) over the next few years. GM current produces 53 nameplates. They plan to reduce the number of nameplates to 39 by the year 2011. This most likely will mean fewer platforms used to build cars, meaning far less development costs involved.

Hummer and Saab are stand-alone retail channels and brands. They are subject to strategic reviews, including their potential sale. A Hummer sale or phase out decision will be made in Q1 2009, with final resolution expected for both no later than 2010. Saab is offered for sale now and if no buyers’ surface, Saab will most likely be spun off as an independent company. Saturn will remain in operation through the end of the planned lifecycle for all Saturn products (2010-2011). In the interim, should Saturn retailers as a group or other investors present a plan that would allow a spin off or sale of Saturn Distribution Corporation (SDC), GM would be open to any such possibility. If a spin off or sale does not occur, it is GM‘s intention to phase out the Saturn brand at the end of the current product lifecycle.

This coupled with a planned reduction in the GM dealer network from 6,250 dealers at the end of 2008 to 5,000 dealers by the end of 2011 should have a significant savings in expenses.

GM’s announcement today came as the Canadian Auto Workers union ratified a cost-cutting deal with the automaker. GM said the agreement would “quickly reduce costs in Canada by significantly closing the competitive gap with U.S. transplant automakers on active employee labor costs and substantially reducing” the cost of benefits for retirees.

GM said it was also exploring the possibility of offloading its retiree health care liabilities in Canada into an independent trust fund, as it did in the United States in its 2007 contract with the U.A.W.

Maybe…. Just maybe, these sluggish Detroit automotive businessmen can get their ducks in a row and make one of America’s great companies a success again. Keep your fingers crossed.