LOS ANGELES — General Motors' (GM) Cadillacs and Hummers may be icons of extravagance, but a cash crunch is forcing frugality on the automaker, from paper clips to auto shows.
GM puts its poverty on center stage by its obvious absence from media events at the Los Angeles Auto Show starting this week. It canceled a multiday series of events, including unveiling of a new Buick and Saab and parties and seminars around the show.
GM also has canceled the lavish, star-studded GM Style event showcasing music, fashion and cars that would have kicked off the North American International Auto Show in Detroit. Last January's show featured Kid Rock, Mary J. Blige and food and drinks galore under a tent outside the convention hall.
While those moves may be symbolic next to the billions GM says it needs to survive, GM officials say they are sparing no cost that can be cut, especially as it lobbies Congress now for a federal bailout. Among the cuts:
•Reduced office supplies. GM used to stock for every possible stationery need. No longer. "The office supply cabinets have only the bare minimum now — inexpensive pads, a few roller-ball pens and wooden pencils," spokesman Tom Wilkinson says.
•No raises. White-collar workers won't get bonuses, raises or 401(k) retirement savings matches.
•Pricier company cars. As of last summer, executives had to pay $100 more a month to use a company car and can't rotate to new ones as often.
Those cuts are small compared with some of GM's bigger moves: cutting union workers by half and managers by a third since 2000, ending retiree health care and offering early retirement incentives to 3,600 salaried workers last fall.
"While it may not amount to that much money, it (conveys) a sense of consistency and a clear message" to employees, says turnaround specialist Van Conway in Birmingham, Mich. It also reassures taxpayers that money won't be wasted if there's a bailout.
GM said last week that it will be at its cash minimum by the end of the year. With $16 billion on hand, GM says it will fall short of the level it needs to keep operating sometime next year. Chrysler and Ford Motor have made big cuts, too, and say they are also scrutinizing every expense.
Chrysler spokeswoman Mary Beth Halprin cites things such as no bonuses and more e-mail, less paper mail.
"We're cracking down," Ford spokesman Mark Truby says. There will be no holiday parties, less travel and less use of overnight delivery. Ford is going ahead, however, with a launch party for the new Mustang this week at the Los Angeles show.
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