The party's over, now the real cutting, consolidation and closings begin at General Motors.

President and politician Obama went directly to the point during his auto industry announcement. The way the industry got to its latest crisis is because of management.

“The pain being felt in places that rely on our auto industry is not the fault of our workers, who labor tirelessly and desperately want to see their companies succeed. And it is not the fault of all the families and communities that supported manufacturing plants throughout the generations. Rather, it is a failure of leadership – from Washington to Detroit – that led our auto companies to this point,” he said.

In a reaction to the President’s explicit criticism, newly appointed GM CEO Fritz Henderson said, “Over the next 60 days, we will work around the clock, with all parties, to meet the aggressive requirements that have been set by the Task Force, and to make the fundamental and lasting changes necessary to reinvent GM for the long-term.”

What this means is that there are more, many more cuts coming at GM. More brands will have to go. More operations will have to be eliminated in the U.S.

GM faces similar challenges and the same solutions in Canada and Europe, where skeptical national governments and the European Community central government have not committed to helping it. In fact, they have been  just as publicly critical of the ailing maker. Fritz Henderson was recently thrown out of a meeting with the patrician German economic minister Karl-Theodor zu Guttenberg and told not to come back until he had a better plan for Opel.

And within minutes of the of the President’s speech, Canada mirrored his position.

“The plans submitted by General Motors and Chrysler to the government of Canada, do not go far enough to ensure the long-term viability of these companies,” said Tony Clement, Canada’s industry minister. Like the U.S., Canada will provide some short-term financing until a better plan is arrived at.

The question is what can GM do to make its already heavily reworked plan better?

During the last three years GM has reduced structural costs by 23%, reduced production capacity by 24% and workers by 47% — all to no avail. GM has closed 12 manufacturing facilities in the U.S. between 2000 and 2008; an additional 14 facilities are due to go by 2012. The United Auto Workers union has already agreed to major wage reductions and relieved the company of paying cash for 50% of retiree health care liabilities.

The Saab, Hummer and Saturn brands have no future at GM, and Pontiac is relegated to a small niche. All told, nameplates are due to be reduced to 36, down 25% from last year. GM’s dealer count is also projected to be further reduced, from 6,246 in 2008 to 4,700 by 2012, and to 4,100 by 2014.

Well, enter plan B, as in bigger cuts.

It looks like the company will have no choice but to eliminate more brands and consolidate its sales and marketing operations further. Does GM really need Chevy and GMC truck lines? And you have to look at the two broad distribution channels it wanted to retain in the U.S. Does the Buick-Pontiac-GMC channel and its overhead make sense any longer? A streamlined product lineup comprised of Chevrolet, Cadillac and say Buick could work. I fully realize how difficult this would be, with more factory and dealership closings as a result, and more, many more white collar job loses.

How is GM Europe going to maintain its Chevrolet, Vauxhall and Opel brands and 300,000 jobs? Fritz Henderson said last month that only a government bailout could save it? “There is no “Plan B,” he said at the Geneva Motor show. The answer is — it can’t any longer. Sales, marketing and brands need to be consolidated there, and in Asia-Pacific as well.

Then there’s the toughest one of all — the bondholders. As originally outlined in the GM viability plan, approximately $27 billion in unsecured public liabilities currently on the company’s balance sheet would be converted to a combination of new debt and equity, for a net debt reduction of at least $18 billion. This swap was supposed to happen by late March, but the bondholders have rejected — and continue to reject — swapping debt for equity in GM. Thus far, the President’s threat of bankruptcy, where the bondholders would lose all, hasn’t made them blink, let alone tender the financial instruments.

“GM will address the tough issues to improve the long-term viability of the company,” Henderson insists, “including the restructuring of the financial obligations to the bond holders, unions and other stakeholders.”

Then he repeated the President’s threat with his own 180-degree reversal of his previous position: “Our strong preference is to complete this restructuring out of court. However, GM will take whatever steps are necessary to successfully restructure the company, which could include a court-supervised process,” Henderson concluded.

Well, fasten your safety belts; this isn’t going to be a pretty ride along the highway to a new era of prosperity at GM. First, the road is going  to get lot rougher.