New GM Still Tightening Belt

New General Motors is open for business, but the company's bankruptcy went so fast its management cuts haven't caught up.

"Today marks the beginning of a new company," one with fewer cars and fewer management layers, CEO Fritz Henderson told reporters on a conference call Friday morning, shortly after the automaker emerged from a lightning fast 40-day-bankruptcy. "This is all about flattening the organization," he said. "Business as usual is over at General Motors."

Henderson said GM will eliminate jobs as high-ranking as the presidency of GM North America, which he will add to his responsibilities, and the elimination of regional presidents and strategy boards. He was vague about the future role of some current executives, noting that some details are lacking because even GM was taken by surprise by the rapidity of the court process. "We planned for a bankruptcy of 60 to 90 days," he said. "We wanted to have it ready to go by July 31."

As part of the overhaul, two senior leadership forums, the automotive strategy board and the automotive product board, will be replaced by a single eight-member executive committee that will meet frequently and make decisions, which Henderson indicated will occur far more rapidly than in the past.

The changes are part of previously announced plans to reduce the number of U.S. executives by 35% and overall U.S. salaried employed by 20% by the end of the year.

Despite the ongoing management restructuring, Henderson said the focus shifted Friday from reorganizing to selling cars. He said GM can "transfer from the battle field triage of the bankruptcy process to the day to day norm of our new company."

Immediate new initiatives will include an experiment in selling cars on line, in cooperation with eBay ( EBAY), and a thinning out of top management.

One thing in GM's favor is that "most Americans want this company to succeed -- I know that speaks volumes, many volumes, about the potential of this company," said new Chairman Ed Whitacre. But "don't misunderstand," he added. "There's still a lot of work to be done."

New GM includes valuable assets like Chevrolet, Cadillac, Buick and GMC. The bad assets remain in a second company, called Motors Liquidation, which will go through a more conventional, slower Chapter 11 bankruptcy, in which assets are sold and liabilities are liquidated over a period of years.

For the time being, existing shares of GM ( GMGMQ), linked to Motors Liquidation, will continue to trade on the Pink Sheets. Although they are worthless, the shares were trading late Thursday morning at $1.14, up 36.2%. Meanwhile, shares in Ford ( F) were trading at $5.72, up 1.6%.