Business Leap Frontier

Motor giant General Motor (GM) desperately tries to cut cost and stave of bankruptcy, as for that the announced plans to close up 1100 of its dealership in US. It also plans to cut ties with 470 dealers of Saturn, Hummer and Saab. GM is also negotiating with the unions to reduce wage cost.

Meanwhile on Thursday, the rival of GM, Chrysler said that it would closing 789 US dealers as part of a massive restructuring program.

GM said that

the 1,100 underperforming and very small sales volume US dealers…will be advised that GM does not see them as part of its dealer network on a long-term basis.

Mark LaNeve, the vice president of North American sales for the carmaker explained

It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient,

GM now has 6246 dealers in US and they are planning to cut the number to 3605 by the end of next year. The car makers are hopping that the move will reduce cost. However, others argue that dealerships, as permits, are not a cost to the company and produce much needed revenue. Mr. LaNeve said that many of the dealers selling less than 35 vehicle annually.

Japanese electronics giant, Hitachi Ltd suffered its worst-ever yearly net loss for the financial year 2008 that finished in March.

The company said its gross loss for the third economic quarter totaled 4.14 billion dollar (371 billion yen), evaluated to a 12.5 billion total revenue a year earlier. Shares of Hitachi Ltd fall 17 per cent to their lowest in twenty-nine years after it shocked shareholders with a record 7.8 billion dollar yearly loss warning. Tuesday, in a statement Hitachi said,

The economic outlook also remains unpredictable against a backdrop of concerns about slowing economic growth in China and emerging markets, the yen’s run up and falling share prices.

The company offered a cost-cutting program that also failed to fill confidence for a quick recovery.  In January, Hitachi declared job cuts of up to seven thousands as part of its rehabilitation plan. The company said it looks for 200 billion yen in savings by closing unbeneficial businesses and reformation factories.