General Motors chief executive Rick Wagoner issued public statements indicating that a vast remaking of the Detroit based motor company will make it nearly indistinguishable from its current form. Wagoner, who appeared before Congress twice seeking federal taxpayer bailout money to save the auto concern, said that the company will not resemble the GM that existed when he appeared before Congress to seek funds.

GM is dumping its Saturn unit

When GM introduced the Saturn brand in 1990, it was presented as an import-fighter with few ties to its parent GM. Hal Riney & Partners, the first agency for Saturn, originated the advertising campaign based around the theme “a different kind of company, a different kind of car”. Ironically, Saturn will run an advertising campaign now aimed at keeping customers’ interest in the brand, and that Saturn still does things differently from other car companies. The new campaign features dealers talking frankly to consumers and urging potential car buyers not to be deterred from considering Saturn based on the problems confronting GM, the American automotive industry, or the economy in general.

Also on the chopping block are Saab and Hummer brands. Saab is reportedly half-owned by General Motors, and its sale would place into question the future of over 15,000 Swedish workers and a further 3,000 in the U.S, where Saab finds its biggest market outside of Scandinavia. Reportedly, Saab’s Swedish management has been offered a loan of $2 billion to keep the company afloat. It is anticipated that Saab will build only 150,000 cars this year with profit margins falling and survival with our without GM in question. Sweden’s Industry Minister Maud Olofsson said on Tuesday “a number of parties have expressed interest in struggling Saab Automobile. Saab has said that it is being courted by six to eight “very large” companies.

More Reductions

In addition to the dropped automotive lines, GM will cut 47,000 additional workers worldwide, nearly halving its work population it had in 2000. Union concessions are expected to play a major key in the cost reduction efforts as Union givebacks are needed in order for the company to survive. “This is really, in substance, about re-inventing General Motors,” the CEO said in an interview yesterday in his Detroit office.

In December, GM sought out and received over $13 billion in government money in order to avoid bankruptcy. It is under the gun to prove it’s viability to the presidential task force formed by the Obama administration. It may win approval to borrow as much as $16 billion more in its effort to survive, a much debated subject in Congress and on the American airwaves. Free market concerns think that the entity should survive on its own or file for bankruptcy. The opposing argument is that GM is too big to fail, and that it’s demise would cause unemployment, and job and housing losses that would severely affect the economy for years to come.

A lifeline to parts suppliers

In recently related developments, the Obama administration agreed to provide auto parts suppliers with a net of $5 billion that will ensure they can receive payment for their parts sold to automakers even if the automakers fail to pay. GM is also reported to be seeking as much as $6 billion in financial aid from concerns and governments outside the U.S. Monitoring and tracking the expenditures of this money will be complicated, but many concerns indicate that a very short leash principle applies and that GM will be watched very closely during its time of crisis.

Regardless of ownership changes in GM units, the automaker will expand plans to have multiple models share engineering designs that allow them to be built and sold around the world for less cost, he said. GM’s Chevrolet Cruze sedan is one of the first of those global cars, which will share underpinnings with Opel’s and others. Wholly owned units like Opel in Germany, which does the engineering for many of GM’s midsize cars, may be more like the GM-Daewoo Auto & Technology unit in Korea where GM only recently became a majority holder Wagoner explained.

GM now controls Opel, but according to some statements issued by the media it has said that it may be willing to give up control of Opel in exchange for European government support. Some estimates point to the fact that Opel will otherwise be insolvent within 30 days. GM Daewoo is responsible for development of the small cars the automaker sells in China, Brazil and Russia. GM also gets small vehicles in China from a Wuling unit in which it has a minority stake.

The automaker plans to cut structural costs from about $53 billion now to $40 billion by 2010 and maintain that level until at least 2014, Wagoner said. Other comments from Wagoner are that “GM will be leaner and more flexible,” and that “we’re going to have to move significantly to lean out our cost structure and address things that have been competitive disadvantages for years.”

Last year, Toyota Motor Corporation surpassed GM as the world’s largest automaker.

Survival not certain, regardless of bailout funds obtained

The idea of GM surviving is not a forgone conclusion. Many significant measures have to be overcome including completing negotiations with the United Auto Workers (UAW) and bondholders about cutting debt by $28.5 billion. Many analysts state that if either of these tasks are not completed, GM would wind up in bankruptcy and/or liquidation.

The $5 billion U.S. Treasury guarantee to pay supplier bills, regardless of the future of automakers, should prevent the collapse of the parts-making industry and help GM survive while the industry waits for auto sales to recover from 27-year lows, Wagoner said.

While many analysts have called for Wagoner’s resignation, and the entire management team to be replaced. Wagoner said he’s not been asked by the government or his own board to resign and his plan is to finish the restructuring.