The poor economy has taken quite a toll on domestic automakers.  Especially since they bet heavily on selling large SUVs and pickup trucks, which have now been virtually abandoned due to fuel prices that are at a record high.  Will domestic automakers be able to weather the storm?

GM is planning to cut costs of $10 billion from its current operations by late 2009.  These efforts include additional buyouts from the 32,000 workers on salary, freezing their rates of pay, cutting out health coverage for people retired over 65 yrs old, and quickly shutting down four SUV/truck plants.

In addition, GM will sell more of its product lines.  For example, behemoth Hummer is going to be sold off.  Doing this will earn them $4 billion-$7 billion cash.  It is even rumored that Buick is going to be auctioned, which has been successful in challenging Lexus brands.

According to GMs chairman and CEO Rich Wagoner, performing these actions will allow GM to survive this hard period in the U.S. and come out strong, lean and successful.

Consumers are seeking small, fuel-efficient vehicles to survive the high gas prices, and are protecting themselves by purchasing new car warranties.  GM has to change their thinking to suit customers and weather the storm.