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GM eliminates 10,000 jobs as deadline nears
Source: Agencies |
February 11, 2009, Wednesday
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Print Edition
Print Edition
GENERAL Motors Corp said yesterday that it will cut 10,000 salaried jobs, citing the need to restructure itself with a government deadline looming and amid some of the worst sales in the United States auto industry's history.
The Detroit-based auto maker said that it will reduce its total number of salaried workers to 63,000 from 73,000 this year. About 3,400 of GM's 29,500 salaried US jobs are expected to be eliminated.
The company's statement said that the separations would be done through GM's severance plan, so there would be no buyout or early retirement packages as GM had offered in the past.
In its plan to Congress submitted late last year, GM said work force reductions would be necessary in order for it to be viable in the long term. Most of the cuts are expected to take place by May 1.
GM said the cuts will vary by regions depending on staffing levels and market conditions.
In addition, GM said that it will cut the pay of most of its salaried US workers beginning May 1 and continuing at least through the end of the year at which time the pay cuts will be evaluated.
The pay of executive employees in the US will be cut by 10 percent, while other salaried workers will see cuts of 3 percent to 7 percent, GM said.
GM faces a deadline on Tuesday to present to the government a plan showing that it can become viable. The plan is required by the terms of US$9.4 billion in low-interest government loans to the wounded auto maker, which is seeking another US$4 billion from the Treasury Department.
To prove its viability, it must show an ability to repay the loans and prove "positive net present value."
The Detroit-based auto maker said that it will reduce its total number of salaried workers to 63,000 from 73,000 this year. About 3,400 of GM's 29,500 salaried US jobs are expected to be eliminated.
The company's statement said that the separations would be done through GM's severance plan, so there would be no buyout or early retirement packages as GM had offered in the past.
In its plan to Congress submitted late last year, GM said work force reductions would be necessary in order for it to be viable in the long term. Most of the cuts are expected to take place by May 1.
GM said the cuts will vary by regions depending on staffing levels and market conditions.
In addition, GM said that it will cut the pay of most of its salaried US workers beginning May 1 and continuing at least through the end of the year at which time the pay cuts will be evaluated.
The pay of executive employees in the US will be cut by 10 percent, while other salaried workers will see cuts of 3 percent to 7 percent, GM said.
GM faces a deadline on Tuesday to present to the government a plan showing that it can become viable. The plan is required by the terms of US$9.4 billion in low-interest government loans to the wounded auto maker, which is seeking another US$4 billion from the Treasury Department.
To prove its viability, it must show an ability to repay the loans and prove "positive net present value."
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