GM to Slash 10,000 Salaried Jobs

[Dragon]

http://business.theglobeandmail.com/servle...y/Business/home

BREE FOWLER

The Associated Press

February 10, 2009 at 12:32 PM EST

DETROIT — General Motors Corp. is planning to slash another 10,000 salaried jobs by May, saying the cuts are unavoidable with a government restructuring deadline looming and industry-wide sales in one of the worst downturns in history.

The Detroit-based auto maker said Tuesday it will reduce its total number of white-collar workers by 14 per cent to 63,000. About 3,400, or 12 per cent, of GM's 29,500 salaried U.S. jobs will be eliminated and other jobs will be cut in other regions of the world depending on staffing levels and market conditions.

The company also has 2,000 white-collar employees in Canada but the number of positions to be cut at the Canadian subsidiary wasn't immediately known.

“We will not announce a specific number relative to the impact on GM Canada, but it is clear that our operations here will be affected in addition to previously announced salaried reductions associated with the closures of both the Oshawa Truck and Windsor Transmission facilities,” company spokesman Stew Low said in an e-mail to The Canadian Press.

Mr. Low added that pay cuts that will be applied to most of the salaried employees who remain will be in addition “to significant reductions already announced to GM salaried benefits in Canada.”

In its plan to Congress submitted late last year, GM said it would have to reduce both salaried and hourly positions so that the company could become viable for the long term.

The company said it plans to reduce its total U.S. work force from 96,537 people in 2008 to between 65,000 and 75,000 in 2012, but it did not specify how many of the surviving jobs would be salaried or hourly.

GM has dramatically downsized both its salaried and hourly work forces in recent years. Since 2000, GM's salaried work force has shrunk by 33 per cent from its 2000 high of 44,000 people.

At the same time, the number of hourly workers has plunged by more than half — to about 63,700 people at the end of last year from 133,000 in 2000.

Most of the cuts announced Tuesday are expected to take place by May 1.

The company's statement said there would be no buyout or early retirement packages as GM had offered in the past, but laid-off employees will get severance pay, benefit contributions and other assistance.

GM spokesman Tom Wilkinson would not say exactly where the U.S. cuts would come, but he said the auto maker will continue to staff areas such as electric vehicle development that it expects to be important going forward.

“The goal is to put our people in the areas that are critical to our future success,” Mr. Wilkinson said.

GM also said it will cut the pay of most of its salaried U.S. workers effective May 1. The pay cuts will be reevaluated at the end of the year, GM said.

The pay of U.S. executive employees will be cut by 10 per cent, while other salaried workers will see cuts of three per cent to seven per cent, GM said.

GM faces a Feb. 17 deadline to present a plan to the U.S. government showing the wounded auto aker can become viable.

GM has received $9.4-billion (U.S.) from the Treasury Department and expects to get $4-billion more, but the government can demand repayment March 31 if it determines the company can't become viable.

The company is required to show the government it can achieve “positive net present value,” which means that the present value of a company's expected net cash flows exceeds the initial investment in the company.

The loan terms also require bondholders to swap part of the company's debt for equity. The UAW also must make concessions that will reduce labour costs to the level of Japanese automakers' plants in the U.S.

GM's plan also will include shuttering additional factories, according to people familiar with the plans.

In Canada, the federal and Ontario governments have said they're willing to provide the equivalent of 20 per cent of what the U.S. government provides — about $4-billion (Cdn.) — to help subsidiaries of the Detroit Three auto makers, although conditions are attached.

One of the conditions is that the auto makers and employees represented by the Canadian Auto Workers union negotiate new, lower labour costs. The CAW has said it's willing to talk and help the auto makers survived but also advanced its own set of preconditions.

CAW president Ken Lewenza, whose union represents workers at the Canadian subsidiaries of General Motors, Ford and Chrysler, said that car dealers, bond holders, shareholders, executive wages and benefits all must take a hit along with unionized workers.

He added that GM's salaried, non-union workers have already been affected and will undoubtedly feel additional pain.

“I don't think we've had two consecutive days in a row where there hasn't been bad news in the auto industry. But when you announce 10,000 job losses globally, there's going to be an impact in Canada. It's inevitable,” Mr. Lewenza said.

He added that “significant cuts” have already been made to GM's salary groups in Canada and they are at “the bare minimum.”

GM has yet to announce its fourth-quarter and full-year 2008 financial results, but analysts expect the automaker's losses to total in the billions of dollars for both periods.

GM reported a $2.5-billion (U.S.) loss in the third quarter alone and said it burned through $6.9-billion in cash during that period, adding to urgent warnings that it would run out of cash without government aid.

[Robert Hall]

That's a lot of empty cubicles and offices. Sounds like a lot of Not Good as far as GM's future.

[daves87rs]

That's a lot of empty cubicles and offices. Sounds like a lot of Not Good as far as GM's future.

[regfootball]

if anyone can tell me of any industry which isn't cutting, I'd be happy to hear it.

[SAmadei]

if anyone can tell me of any industry which isn't cutting, I'd be happy to hear it.

Prostitution? ;-)

Actually, I imagine the unemployment office is hiring.

[GXT]

if anyone can tell me of any industry which isn't cutting, I'd be happy to hear it.

I saw a list of the most recession proof jobs. I believe these were the top three:

1) Public sector

2) Health Care

3) IT

[Robert Hall]

I saw a list of the most recession proof jobs. I believe these were the top three:

1) Public sector

2) Health Care

3) IT

Sounds plausible...from what I've heard, the unemployment rate for my thing is about 3% in the Denver metro and a bit higher in Phoenix. I've been talking w/ recruiters about lining up my next gig when my current contract ends, there are still a lot of job postings out there for my thing.. I get daily updates from Dice, Monster, etc for Phoenix, Denver and other metros I like, and the picture still looks better than '01-02 after the dot.bomb bubble burst.

[hyperv6]

Well the goverment with their $700 Billion are looking to creat a lot of jobs and many are not in the public sector. More Goverment jobs that just employee people but add little to our economy.

That may hurt things as adding more govement jobs is not going to make investors happy.

The wife works for the Gov and the waste there has been crazy for years. It is insaine what they spend money on and keep asking for more.

Anyone notice the safer we make our cars the lower quality the elected officals become? I guess that is what happens wen you mess with natural selection? It has been a decline for years.

I have always said Airbags, Helmet laws and Seatbelt laws have stopped the thining of the heard.

Edited February 11, 2009 by hyperv6

[Robert Hall]

Well the goverment with their $700 Billion are looking to creat a lot of jobs and many are not in the public sector. More Goverment jobs that just employee people but add little to our economy.

That may hurt things as adding more govement jobs is not going to make investors happy.

The wife works for the Gov and the waste there has been crazy for years. It is insaine what they spend money on and keep asking for more.

My current gig is with a government (city) client, and it's been eye-opening. A lot of zombies work there, just hanging around biding time until retirement and a pension, it seems. They are content maintaining their COBOL programs and seem to show no interest in doing the cool, modern technology stuff that contractors like myself are building.

[hyperv6]

My current gig is with a government (city) client, and it's been eye-opening. A lot of zombies work there, just hanging around biding time until retirement and a pension, it seems. They are content maintaining their COBOL programs and seem to show no interest in doing the cool, modern technology stuff that contractors like myself are building.

The wife deals with county and city admin people. They do little and vote themselfs cars, housing funds and trips that really have little to do with work. It is so bad they don't hide it as no one is holding them accountable. The run under the surface to the point the public never notices.

If it is that bad on the lower levels you can figure how much worse it is as the rank in goverment goes up.

[Dragon]

I saw a list of the most recession proof jobs. I believe these were the top three:

1) Public sector

2) Health Care

3) IT

not necessarily. public sector employment up here fell 1.2% last month. while the unions like CUPE might keep large layoffs form happening, new hires will probably go down.