General Motors said today it is moving ahead with cost-cutting this year and expects to make $4bn in savings out of a , in a move to staunch losses in North America as quickly as possible.
As part of the next phase of the cost-cutting plan which previously identified targeted savings of $7bn, GM said it is now aiming to lower its costs as a share of revenues to 25% by 2010, from the current level of about 34%.
The company said it would not provide a 2006 financial forecast, citing ongoing Union talks, the timing of implementing health care agreements and the potential actions related to its financing arm, General Motors Acceptance (GMAC). GM reached an agreement with unions in 2005 to cap healthcare costs and other benefits, saving it $1bn a year.
The Detroit-based automaker said it expects another record year for global auto sales in 2006, driven by growth in Asia Pacific.
The US car giant has faced tough competition from Asian rivals and changing consumer tastes and is not banking on new products to help its turnaround. GM said it expects new cars and trucks to account for 30% of North American sales by 2007.
