I, like so many people who have been following General Motors’ fortunes for some time, am wondering what the company’s long term plan of action is in the face of historic losses, plant closings, and unrelenting and widening competition. Besides the U.S. job cuts, General Motors Canada said it plans to slash its hourly work force to from 10,300 currently to 4,400 by 2014 years.

Quite frankly, the North American market is currently unprofitable for the company while GM holds its own, even thrives, in many markets beyond our borders.

File For Bankruptcy? — It is time to play hardball with recalcitrant unions and government authorities who don’t understand that GM is playing on an uneven field. Toyota, Honda, Nissan, and Hyundai all build cars in the U.S. None of them are saddled by huge legacy costs, i.e. health and pension benefits, local tax burdens, etc. Yes, GM negotiated their contracts in good faith, however the market has changed tremendously over the past several decades and is wholly unfavorable to the way GM has been doing business since then. In addition, GM often operates at a disadvantage in foreign markets as local laws limit their ability to effectively sell their vehicles.

Build Small Cars — The need to build small cars is now and the future for GM.

The Divisions Many think that GM has too many divisions, I agree. Can GM keep selling what works for them in the past or new direction needed for GM?

1. Cadillac – GM’s luxury division is riding high and no changes need to be made. Keep producing distinguishable high quality luxury cars and Cadillac will continue to compete against the likes of Lexus, Mercedes, BMW, and Infiniti. Cadillac outsells Lincoln by more than 2 to 1 and the division performs well in all consumer quality and satisfaction surveys.

2. Buick – As the “near luxury” division for GM, Buick must create a viable alternative to Cadillac without sacrificing quality or confusing consumers. Bring back in a “halo” model like the Regal to show Buick’s youthful side.

3. Pontiac – April 27, 2009, GM To Cut 21,000 US Jobs, Shed PontiacGeneral Motors says it will cut 21,000 U.S. factory jobs by next year and phase out its storied Pontiac brand as part of a major restructuring effort. (Pontiac’s performance image is gone for good.)

4. Chevrolet – Keep up what you have, but rely on imports to fill the lower end of the market. Redo the Impala to help it compete successfully against the Chrysler 300, Toyota Camry, and Honda Accord. Yes, keep the Camaro!

5. Saturn – Moving in the right direction, Saturn should chiefly sell cars that are Opel inspired. Give the car a more European flair and the division will succeed. The Sky is a knock out and the Opel inspired Aura is a vast improvement over the old “L” Series model. Keep the strong dealer network in place and Saturn will compete successfully against Hyundai, Honda, Toyota, Nissan, and others.

6. Saab – GM’s Swedish division is floundering and may be cut. Better yet, let the division sell upscale versions of Opel models and please do not throw out the Swedish touch: safety and durability. Unfortunately, GM hasn’t been as kind to its Swedish company as Ford has been to its Volvo subsidiary.

7. GMC – Between Chevy and GMC, no manufacturer sells more passengers trucks then this division. Likely, nothing will change, but coming out with a more capable small pick up truck would go along way in helping GMC and Chevy. Also, redo the Equinox to be a real battler against the Ford Escape and Toyota RAV4.

8. Hummer – GM’s niche division is the Hummer and little needs to be changed other than to add an H4, a compact Hummer. The hummer may also be gone soon. With the H4, give the division something to go with that can battle the Jeep Wrangler. Hummer will always be perceived as the company’s gas guzzling company, but it is also profitable for the corporation.

Personally, I do not want the bankruptcy route to be exercised as I know that so many suppliers would be left out in the cold, jobs lost, and goodwill would take a hit for at least the short term. Still, aggressive action – even beyond plant closings and layoffs – must be considered otherwise GM will be relegated to operating as a second rate player in North America while pursuing its fortunes abroad. In my opinion, neglecting the profitable North American market would be a shame and very costly.

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