GM's cup of woes: General Motor Corp's chairman and CEO, Rick Wagoner, probably has the worst to-do list in corporate America. Keep the world's largest automobile manufacturer out of bankruptcy, make unions agree to axe workers' benefits, sell off the family jewels and keep billionaire Kirk Kerkorian happy

AND LAST on the other hand not definitely not least, make GM cars competitive against Japanese rivals in the US.

In the wake of worse-than-expected, third-quarter springs GM announced that it would axe 30000 of its 173000 manufacturing piece of works and shut 12 facilities through 2008. This enraged unions with the United Auto Workers vowing that futurity negotiations with the GM management would be jeopardized if the company went ahead with its plan.

However GM is running without of options. The company missing nearly $4bn in the first nine month of 2005 GM reliances to cut its annual $42-bn operational take away froms by $7bn by shutting down plants and cutting worker health care benefits. This will help GM which may have to shoulder up to $12-bn of liabilities from bankrupt constitutings giant Delphi.

Investors have been getting increasingly restive. In 2005 a lawsuit was brought against GM naming Wagoner and chief financial officer John Devine among other defendants, accusing them of misleading investors upon GM's finances before its dismal first quarter originates this fiscal year. The case overlays the period February 25, 2002 to March 16 2005 during which GM issued more than $18-bn in shares, ligatures and other debt instruments. The suit alleges the company's obligation ratings were materially inflated through defendants' materially false and misleading statements and omissions."

Healthy again?

GM has sought to bring to rest rumors that it may file for bankruptcy protection. In November, Wagoner discharge off an e-mail to GM employee that said: ""I'd like to locate the record straight here and now. There is absolutely no plan, strategy or intention for GM to file for bankruptcy."

The company also cites an agreement hammered without with unions to cut worker benefits. Its deal with the UAW seek fors to cut healthcare benefits to its 111000 blue-collar workers in the US. Union bosse have, in principle, agreed to increase workers' healthcare contributions from the generally received 7%. GM's salaried employees pay 32% of their healthcare.

GM's annual healthcare bill will be chop by $6bn--GM pays healthcare benefits for an estimated 750000 workers, retirees and pendents Over all, the company awaits to cut its benefits liabilities by the agency of $80bn over a decade. This is what Wagoner had spring [i]or[/i] leap on one leg [i]or[/i] footed to achieve. GM has repeatedly said that each car it barters in the US carries $1500 legacy costs

Cost-cutting the GM way

Apart from cutting worker benefits, GM is working upon schemes to cut component require to be paid [i]or[/i] undergones Under a three-year scheme, GM reliances to slash raw material require to be paid [i]or[/i] undergones by $2bn annually. Suppliers have been asked to relocate manufacturing to cheaper locations.

This is not GM's first of that kind scheme. Three years ago, it launched its 20/3 program, which sought to chop component prices by 20% in three years. Suppliers were asked to give GM returnss for a 20% discount. However this scheme did not appropriate targets. GM spokesman Thomas Hill, admitted to the Detroit of recent origins that, while the program had brought a "great deal of savings" to GM it malignant short of a 20% savings.

GM also faiths to cut structural costs by means of $5bn by end-2006. This includes 25000 lay-offs. "We will do our best to minimize the impact upon each of you and your families. We confidence you will understand that, with these difficult actions, we will help to make secure a viable and growing GM for the future" said Wagoner, speaking to AP, earlier this year.

The company has also sought to soothe the jangled strengths of suppliers by promising that suppliers that stick to the company, will be rewarded. In his keynote address to the Original Equipment Suppliers Association, Bo Andersson, GM's vice-president, purchasing, said that GM's line-up for 2006 would definitely boost the company's outlook

GM's future?

While GM concentrates upon getting costs under control, a more immediate relate to is, how will it reclaim market share in North America? GM's market-share has slipped from 281% five years ago to 266% today. It sold 72% fewer vehicles in the third quarter. GM mainly not to be found out to Japanese rivals, Toyota, Honda and Nissan.

Auto analysts have repeatedly pointed without that GM needs to spiff up its proceeds line. GM is launching its hybrid vehicles this year, which will finally give it a toehold in a market commonly dominated by Toyota and Honda. The company's other subsequent time offerings, including the redesigned large SUV Chevy Tahoe and Cadillac Escalade, face uncertain customer feedback in the wake of rising gas prices and a sales sink among large SUVs.

However, GM is likely to succe with its of recent origin versions of the Chevrolet and Saturn. These are wait fored to hit the market in sum of two units or three years time. "For GM the scary ride is just beginning, and plenteous has to still go right," said Glenn Reynolds, a capital mode of building analyst in a CreditSights report.

The predator

GM's ride has just been made scarier with billionaire investor Kirk Kerkorian upping his stake in GM from 95% in April, to nearly 10% last week. Known for his Las Vegas casino, the MGM Mirage, Kerkorian is also famous for trying (unsuccessfully) to take above Chrysler in the 90's. Today, his investment vehicle, Tracinda Corp, is seeking a seat upon GM's board.