GM to slash up to 31,500 jobs in US
General Motors told lawmakers that it plans to cut up to 31,500 more jobs in the United States, as it confronts a severe slump that has it begging Congress for an 18-billion-dollar bailout.india Updated: Dec 03, 2008 09:51 IST
General Motors told lawmakers on Tuesday that it plans to cut up to 31,500 more jobs in the United States, as it confronts a severe slump that has it begging Congress for an 18-billion-dollar bailout.
GM said it planned to reduce its total US employment from the current level of 96,537 people to between 65,000 and 75,000 salaried and unionized workers by 2012.
The total number of US plants would be cut to 38 in 2012 from 47 in 2008.
GM has already slashed its workforce nearly in half from the 2000 levels of 191,465 people. The company operated 59 powertrain, stamping and assembly plants in the United States in 2000.
The job cuts were detailed in a report GM presented to Congress in hopes of securing government-backed, low-cost loans.
GM said it expects to be "fully competitive" with Toyota on wage costs for "both current workers and new hires" by 2012 due to "additional changes to be negotiated" with its main union, productivity improvements, turnover rates and the planned cuts.
A landmark labor agreement reached last year has lowered GM's total costs for new workers to 25 to 35 dollars an hour compared with Toyota's average US labor cost of between 45 and 50 dollars per hour, GM said.
"The operating and capital restructuring elements will significantly improve the company's profitability and cash flow for the long term, and enable full repayment of any temporary federal assistance by 2012" in the event US auto sales remain at or above 12 million vehicles a year, GM said in the plan.
GM forecast its labor costs for union workers in the United States would drop to 4.5 billion dollars a year in 2012 from 8.1 billion dollars in 2008 and 18.4 billion dollars in 2003.
North American structural costs are forecast to fall to 23.2 billion dollars or 24.8 percent of revenue in 2012 from 30.3 billion dollars or 33.9 percent of revenue in 2008 and 39.6 billion dollars or 32.2 percent of revenue in 2004.
The bulk of the reductions will be achieved by 2010 when the full benefit of recent changes in GM's retiree healthcare and pension expenses are realized.
"This is a significant and important change to the company's long-term viability, GM said, adding that it has spent over 103 billion dollars on retiree healthcare and pension expenses in the past 15 years.
This massive obligation crowded out "investment otherwise made in quality, safety, fuel efficiency and innovation" and "decimated GM's balance sheet, resulting in negative stockholder equity of about 60 billion dollars as of September 30, 2008."