Six steps to restructure GM.

• Author: Heffes, Ellen M.
• Position: MANAGEMENT - Reprint

Peter Cohan, president of Peter S. Cohan & Associates, and author of eight books including You Can't Change Order (Portfolio), published last November, and again recently, his plan to save General Motors Corp. (Reprinted with permission):

GM should get government help with financing in Chapter 11 once it restructures in a pre-packaged bankruptcy. A restructuring would jettison GM's management team, cut labor costs, close unprofitable dealerships and toss overboard GM's money-losing product lines.

These six steps of a proposed restructuring could save $16 billion a year:

* Allow GM to Merge with Chrysler--but only if Cerberus, which owns Chrysler, sees its equity wiped out--to save $7 billion in annual costs.

* Dump Unprofitable Brands--Cadillac, Chevy and Buick (popular in China) would be the surviving GM brands. This would save $5 billion per year.

* Close Related Dealerships--this would save $4 billion annually.

* Save the Jeep--and merge other Chrysler brands with GM. Specifically, the Dodge Ram and Chrysler's minivan could be combined into the Chevy brand.

* Cut Pay--GM pays about 8,000 people who don't work through the jobs bank and pays those on the job...