General Motors is drastically cutting costs as it tries to ride out the current auto market slump, which is expected to ease by around 2010. The ailing carmaker is burning through approximately $1 billion in cash per month, a figure that it is hoping to reduce by downsizing its workforce, reducing benefits and delaying important new models.

An inside source at GM has now revealed to BusinessWeek that the upcoming Chevrolet Cruze compact car may be delayed by up to a year, giving it a 2011 debut. The Chevrolet Cruze is set to play a major role in bringing GM back into competition with Japanese manufacturers, however the delay is necessary to cut costs and stay afloat until 2010.

Additionally, the next-generation Chevrolet Malibu may also be held back for around six months until 2013. While delaying these important new car programs is vital for GM to stay fiscally solvent, they must now strike a balance between cutting costs and developing new vehicles.

Cost cutting measures have also put other GM models on hold, including the Cadillac CTS Coupe and the Buick LaCrosse. Both were set to debut at next month’s Los Angeles Auto Show in November, but will now be making their inaugural appearances at the Detroit Auto Show early next year.

In terms of other operating costs, GM is also expected to lay off up to 5,000 employees, as well as cut 401(k) contributions for a number of its workers.

GM CEO Rick Wagoner is counting on the company's cost cutting measures to raise around $15 billion, the amount required to keep it operating even if total vehicle sales fall to 14 million units in the United States. While last year the U.S. market bought over 16 million vehicles, only 13.4 million vehicles are expected to be sold next year.