For the past five months, since its former CEO addressed Congress and asked for aid for the first time, GM (GM) has been chopping costs based on the domestic light vehicle market producing 12 million units in sales. That was never a realistic number. So far in 2009, the run rate of sales is under 10 million.
GM's new management has finally come to the conclusion that it will have to cut costs to match revenues for the lower sales figure. Even with union and creditor support, getting expenses down based on the reality of domestic vehicle purchasing trends is the only way GM will stay out of bankruptcy.