GM Says Announcement of " Important Changes" Coming

DETROIT November 5, 2008; Kevin Krolicki writing for Reuters reported that General Motors Corp will announce "important changes" to its operations in response to the "volatile global economic situation" when it reports third-quarter results on Friday, the automaker said in a note to staff on Wednesday.

GM Chief Executive Rick Wagoner plans to brief workers on third-quarter results as well as "important changes to our business to address the challenges brought on by the volatile global economic situation," according to two people who received a companywide email.

The email did not specify what cost-cutting steps GM might be readying. A spokesman for GM confirmed the email was sent to staff.

The automaker's October U.S. sales dropped 45 percent, and it has pressed for federal aid to help the industry survive a prolonged slump that has pushed overall sales to a 25-year low.

In July, two weeks before it reported a $15.5 billion loss for the second quarter, GM said it planned to cut jobs, sell assets and take other steps to free up $15 billion in liquidity through 2009.

But the U.S. auto market has contracted in the three months since GM announced that restructuring plan. The automaker had assumed that sales in both 2008 and 2009 would be near 14 million vehicles.

But industrywide sales results for October were near 10.6 million vehicles on an annualized basis, and analysts see a risk that sales this year and next could fall below the 14-million-vehicle level.

Editing for Reuters by Jeffrey Benkoe