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GM emerges from bankruptcy and vows to begin a new era

THE new General Motors will be faster and more responsive to customers than the old one, and it will make money and repay government loans faster than required, CEO Fritz Henderson said yesterday as a leaner version of the auto maker emerged from bankruptcy protection.

The bulk of General Motors Corp's assets were transferred to a company controlled by the United States government.

Once the world's largest and most powerful auto maker, new GM is now cleansed of massive debt and burdensome contracts that would have sunk it without federal loans.

But the new GM also emerges amidst the worst sales slump in 25 years.

Henderson said in Detroit that GM completed its 40-day stay under court supervision faster than anyone expected. He said it would repay about US$50 billion in government loans ahead of a 2015 deadline.

He said the company now will focus more on customers, including a partnership with eBay to test auctioning vehicles online.

The new GM will also build cars and trucks that consumers want and launch them faster, the CEO said.

"We recognize that we've been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done," he said.

Henderson also said the company would reduce its overall US salaried employment by 20 percent by the end of this year. He said management ranks will be cut by 35 percent, or 450 executives, including the elimination of its North American president position. Henderson said he will take responsibility for North American operations.

He said Bob Lutz, a legendary industry executive, was "unretiring" to become a vice chairman responsible for all creative elements of products, marketing and customer relationships. Lutz had planned to retire at the end of the year after more than four decades in the auto business.

The auto maker is launching a "Tell Fritz" Website to allow owners and the public to share their concerns with senior management and he planned to go out on the road every month, Henderson said.

"We need to listen to the questions, ideas and the concerns of the people who matter the most," Henderson said.

The new company will focus on three top priorities, customers, cars and culture, Henderson said.

"If we don't get this right, nothing else is going to work," he said. "Business as usual is over at General Motors."

New Chairman Edward Whitacre Jr said the 40-day period had been extremely challenging. "There have been a lot of long hours, there have been a shuttering of plants, there have been painful layoffs," he said. Whitacre cited the "strong leadership" of Henderson and the management team, giving the CEO who replaced Rick Wagoner a vote of confidence.

"We all want to win and we are going to win," Whitacre said.

Concessions made by the United Auto Workers union just before the company entered bankruptcy protection have brought GM's labor costs down to where they are fully competitive with Toyota Motor Corp, Henderson said.

Henderson also said the US government has urged them to form a "world-class board" and has vowed that it would not get involved in day-to-day decisions. Steve Rattner, the head of the Obama administration's auto task force, "wants the company to perform," Henderson said.

GM ranked as the top global auto maker in terms of sales for 77 years before Japan's Toyota Motor Corp snatched its crown last year.

Detroit-based GM sold nearly 8.4 million cars and trucks around the world last year, falling short of Toyota's nearly 9 million.


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