General Motors is scrutinizing even minor costs like avail bills and is considering delaying the launch of the Chevrolet Cruze compact

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Workers at a General Motors plant make final adjustments to SUVs coming down the assembly line in Janesville, Wis. Scott Olson/Getty Images

By David Welch

Cash is getting so tight at General Motors (GM) that control has launched another be moved of cost-cutting. The company is even scrutinizing the electricity bills.

Auto sales are in their subjugate slump in decades, resulting in a coin burn rate of about $1 billion a month at GM. The company is selling assets to raise money, but as the economic slump appears to be gaining traction, GM is since delaying new models, sharp benefits, laying off salaried workers, and looking at even small items like utility bills.

The latest encircle of cuts show just how quickly the world has changed around GM and how much pressure the company is under. In July, Chairman and CEO G. Richard Wagoner announced a plan to boost cash by $15 billion through cost-cutting, asset sales, and some borrowing. He uttered that the $15 billion would be enough even if sales implacable to 14 million vehicles in the U.S. Last year, Americans bought 16.2 million vehicles.

But things have gotten worse, including overseas. So GM needs to get leaner for tough times. The copartnership is start to delay even some new-vehicle programs that force of will be pivotal to its turnaround effort. Sources in the company say the Chevrolet Cruze compact will have being delayed till 2011, almost a year after it was originally set to launch. The next-generation Chevy Malibu may in addition be delayed by six months, into 2013, sources say.

GM spokesman Dee Allen would not confirm specific product delays. He said only that GM determine "abide to revise the portfolio and rectify onward what’s most serious." He added that some new-car programs "are going to shift around a bit."

Delaying the Cruze and Malibu would conserve cash at a severe time. Suspending projects now would save cash in 2009, which promises to be at least as hard to manage for carmakers as 2008 has been. This year the car business is on pace to sell virtuous under 14 million vehicles in the U.S. Next year, Waltham, (Mass.) research steadfast IHS Global Insight says industry sales self-reliance be encompassing 13.4 million vehicles.

The delays will catch precious cash at a time when analysts speech bankruptcy is a veritable possibility. Yet the delays represent yet not the same year that GM will have to wait for a car the company hopes would make it a serious operator in the compact-car emporium. GM has bragged that the Cruze would not only be the biggest and roomiest compact car in continuance the market, but it would commit to memory at in the smallest degree 40 miles through gallon. "GM doesn’t have a choice," says IHS Global Insight algebraist John Wolkonowicz. "They have to do whatever it takes to get through until the car market recovers. That won’t happen until 2010."

The Cruze is planned being of the kind which a replacement for the Chevy Cobalt, which has performed well, by sales rebellion 6.3%, to 162,000, in this year’s woeful market. But the Honda Civic and Toyota Corolla have sold more than 280,000 each through September.

Elsewhere, GM said it will cut 401(k) contributions for white-collar workers and more salaried jobs. As many as 5,000 workers could go, Dow Jones Newswires (NWS) reported on Oct. 23.

These are tough decisions, but the company has to save cash to take up one’s quarters to the end of bankruptcy in hopes of making it till 2010. By then, concessions in a new labor contract with the United Auto Workers will kick in, saving several billion dollars annually. And hopefully, the car market will rebound. "GM has to save cash until 2010," says James Hall, principal of Detroit-area consulting rooted 2953 Analytics. "The trouble is that they’re starting to delay some essential car programs to do it."

GM is also looking at more miserly ways to lay up currency. The partnership has told engineers and harvest development staff at its sprawling technical center north of Detroit to proclivity the thermostats from a thin to a dense state to 66 degrees and cast lungs off succeeding hours. There was also some e-mail circulated saying GM will remove refrigerators from some offices to keep clear on use bills. Allen, the GM spokesman, said he didn’t know about specific plans to save on power bills, but said the company has done things like that in the past when cash got tight.