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BREAKING: 7-15-08 G.M. Announces More Layoffs; Production Cuts: What About S'port Hummer?
Tuesday, Jul 15, 2008 8:27pm
DETROIT, MI From The Times (By: Tom Pace, Talk of the Town) BREAKING: AUTOMOTIVE NEWS 7-15-08 Will the General Motors Hummer truck line in Shreveport, Louisiana survive the latest round of layoffs and production cutbacks announced July 15th by the struggling automaker?
According to The Times article, G.M. said Tuesday, the U.S. auto giant will lay off salaried workers, cut truck production, suspend its dividend and borrow $2 billion to $3 billion to weather a severe downturn in the U.S. market.
GM said the moves will raise $15 billion to help cover losses and turn around its North American operations.
"In short, our plan is not a plan to survive. It is a plan to win," GM Chairman and CEO Rick Wagoner said in a broadcast to employees.
Chief Operating Officer Fritz Henderson said GM wants to reduce its total salaried costs in the U.S. and Canada by 20 percent.
A large chunk of the reduction, he said, would come from cutting health care benefits for salaried retirees. Those people would get a pension increase from the company's overfunded pension fund to help compensate for Medicare and supplemental insurance, the company said.
Several thousand jobs will be cut through normal attrition and retirements, and through early retirement and buyout offers, Henderson said. The company could resort to involuntary layoffs but does not want to, he said.
GM has 40,000 salaried employees in the U.S. and Canada.
Henderson said the company intends to reduce its truck production capacity by 300,000 units, 150,000 more than it announced at its annual meeting in June.
The company will speed up closures of its truck and sport utility vehicle factories in Janesville, Wis.; Oshawa, Ontario; Silao, Mexico; and Moraine, Ohio, and it will make thousands of job cuts at other truck assembly and parts factories, Henderson said.
He would not say if further plants will be closed, and said the company still must negotiate further cuts with the United Auto Workers.
GM said it will suspend its $1 annual dividend immediately, which will improve liquidity by $800 million through 2009. It's the first time the company has suspended its dividend since 1922.
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Chief Operating Officer Fritz Henderson said GM wants to reduce its total salaried costs in the U.S. and Canada by 20 percent.
A large chunk of the reduction, he said, would come from cutting health care benefits for salaried retirees. Those people would get a pension increase from the company's overfunded pension fund to help compensate for Medicare and supplemental insurance, the company said.
Several thousand jobs will be cut through normal attrition and retirements, and through early retirement and buyout offers, Henderson said. The company could resort to involuntary layoffs but does not want to, he said.
GM has 40,000 salaried employees in the U.S. and Canada.
Henderson said the company intends to reduce its truck production capacity by 300,000 units, 150,000 more than it announced at its annual meeting in June.
The company will speed up closures of its truck and sport utility vehicle factories in Janesville, Wis.; Oshawa, Ontario; Silao, Mexico; and Moraine, Ohio, and it will make thousands of job cuts at other truck assembly and parts factories, Henderson said.
He would not say if further plants will be closed, and said the company still must negotiate further cuts with the United Auto Workers.
GM said it will suspend its $1 annual dividend immediately, which will improve liquidity by $800 million through 2009. It's the first time the company has suspended its dividend since 1922.
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