GM confirms 10,000 more salaried employees to go this year, plus pay cuts
The pain just keeps on coming for workers at General Motors. The company confirmed this morning that it will eliminate 10,000 salaried positions around the world before the end of this year. That will take GM's global white collar staff from 73,000 down to 63,000. Of the 10,000 heads to be cut, 3,400 will be in the United States where the company currently has 29,500 white collar staff. Those jobs will be eliminated by the end of April through another program of buyouts. Those that remain in their jobs after May 1 will be taking home less in pay every week. From May 1 through the end of the year, those in executive positions will see a 10% cut in base pay. Those at lower pay grades will see salary cuts of 3-7%. Whether the cuts remain in place into 2010 will depend on the state of the business at the end of this year. In this economy, a job with 5% less pay is probably better than no job at all, but it still sucks.
[Source: General Motors]
PRESS RELEASE
GM to Reduce Salaried Employment Levels
DETROIT -- GM is notifying its employees that it will reduce salaried employment globally from a current level of 73,000 to approximately 63,000. These reductions are expected to take place in 2009.
These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability. GM outlined the need for the reductions in its restructuring plan submitted to Congress on December 2, 2008. The announcement this week begins implementation of this aspect of the plan.
Salaried employment reductions will vary by global region, depending on the staffing levels in the region and market conditions. Details of the reductions and separation programs will be shared directly by regional leadership with the affected employees.
In the United States, approximately 3,400 of GM's 29,500 salaried employees will be impacted. These reductions will be made using GM separation programs and policies, which provide for severance payments, benefit contributions and outplacement assistance. The majority of the reductions are expected to take place by May 1, 2009.
GM also announced a temporary pay reduction for a majority of U.S. salaried employees. This begins May 1, and will be effective through the end of the year, when it will be reviewed. In the U.S., executive employees will have their base pay reduced by 10 percent, and many other salaried employees will see reductions of 3 to 7 percent.
Other countries are currently reviewing compensation and benefits for salaried employees.
Reader Comments (Page 1 of 2)
Sea Urchin 9:26AM (2/10/2009)
One again, i will call for the CEO to step down. Enough is enough, how long will it take the board to recognize that he is unqualified.
Fritz, is just as bad. GM needs an outsider.
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MKIV 10:47AM (2/10/2009)
CEO change may be in order. However, the problem that GM is in is far beyond the CEO. They need to restructure, negotiate with the UAW and turn that company around so it'll actually make money. Not a small feet after the brand has been destroyed for all these years not to mention all the idiotic business decisions of the past.
Taylor 10:57AM (2/10/2009)
The CEO of a company, whose employees are union based, is pretty much a shill. There's not much that could have been done to stop what's happened.
With these layoffs and paycuts, it's almost as if they "get it" now. Though when production drops 50+%, cutting 15% of your workforce still isn't going to cut it.
Hugh G 9:27AM (2/10/2009)
I remember when GM was the largest employer in the US. Now it's Wal Mart. I guess that shows you where our standard of living is headed. Your kids will not have the same quality of life that we did, thats for sure.
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notYou 10:30AM (2/10/2009)
Don't worry, it's almost over. [cough] "stimulus" [choke] "trillions in debt" [chuckle]
"Welcome to the New America!" -The Late, Great USA.
David 11:57AM (2/10/2009)
Wal-Mart is not the largest employer in the United States. It's the largest company, and the largest *private* employer, but the United States government employs far more people.
Scary.
Todd 9:27AM (2/10/2009)
But Wagner and all the top executives get to keep their jobs?
WTF?!?!?
General Motors Corp. Chairman and CEO Rick Wagoner's compensation package is valued at $15.7 million.
http://en.wikipedia.org/wiki/Rick_Wagoner
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Hugh G 9:31AM (2/10/2009)
Hey Dummy, the current economic crisis and slump in the auto industry is not Wagners fault. With your logic, all the CEO's at Toyota, Honda, Ford, yadda yadda yadda need to go also. Last I checked, everybody was doing poorly right now. Only thing saving Honda and Toyota from axing all kinds of workers is that they have much less in legacy costs to deal with.
KLR 9:51AM (2/10/2009)
Honda and Toyota have been cutting workers and production - just not much in the US. They know if they start cutting much in the US they'll have a political nightmare.
Honda recently started a four month shutdown in Great Britain and Toyota has offed all of it's "temporary" workers. Toyota is also having scheduled shutdown days. One day last week they shut down all but one of their lines in Japan.
bssplayr 10:27AM (2/10/2009)
Wasn't it recently announced that senior execs from companies benefitting from the bailout program were limited to $500K in compensation?
notYou 10:32AM (2/10/2009)
bssplayr: "Wasn't it recently announced that senior execs from companies benefitting from the bailout program were limited to $500K in compensation?"
It wasn't retroactive. Even though the Great One's grandstanding led you and a zillion others to think otherwise, but that's ChiBlagoland politics for ya...
I also think the requirement was limited to banks only, but I could be wrong there...
montoym 9:49PM (2/10/2009)
quote from NotYou: -
"I also think the requirement was limited to banks only, but I could be wrong there..." -
That and the money GM got was not from the TARP funds nor was it a bailout. It's a loan they will be paying back unlike the money given to the banks.
Plus, not to go too far off topic, but the Big 3's CEO's already agreed to work for $1/yr anyhow.
Additionally, the $500K/yr limit for the banking execs is just to make the public feel better anyhow. Those execs will still be receiving other benfits and stock options etc. which will make it such that their total compensation will likely be unchanged. But, when you tell everyone that they aren't making more than $500K, then everyone is happy(blind to the facts, but happy).
kpogoda 1:55PM (2/10/2009)
So how will this get people buying cars? More and more people are becoming unemployed and getting salary cuts. This is a vicious cycle we are in.... Let's hope it ends soon or else the standard of living in this country will go down the tubes rather quickly.
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Gavin 9:42AM (2/10/2009)
Hmmm...Aren't there about 10,000 employees in total that work for Saturn? (Me being one of them...)
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Polly Prissy Pants 9:48AM (2/10/2009)
I wonder why they keep trickling out these layoff announcements instead of just coming up with a plan and going with it. A few thousand here, a few thousand there, seems like every day there's a new announcement about layoffs in this company. It really makes me wonder whether there is some master plan or if they're just winging it from 9 to 5 each day.
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n_r_child 10:01AM (2/10/2009)
Or they continually make adjustments as continuing economic conditions warrant. After all, if the economy comes back, you need sufficient workers (good workers, though) to create good products- and GM is not in a position to survive without good products. Hell, even great products might not ensure its survival, so I can see why they are being careful.
Polly Prissy Pants 10:12AM (2/10/2009)
"Or they continually make adjustments as continuing economic conditions warrant."
How has their financial situation and the economy really changed over the past 6 months? Somebody at GM has to get a vision for what they want the company to be and take decisive action to get it there. Operating with no long term plan is what got them where they are today.
notYou 10:46AM (2/10/2009)
Polly Prissy Pants: "How has their financial situation and the economy really changed over the past 6 months?"
I was going to reflexively scold you and say that 6 months ago things weren't anywhere near as bad as they are now but...
Looking at the numbers:
http://www.autoblog.com/2008/08/01/by-the-numbers-july-2008/
July 2008 had GM -32%
http://www.autoblog.com/2009/02/03/by-the-numbers-january-2009-not-so-happy-new-year-edition/
January 2009 has GM -48%
Hmmm, so they got another 50% worse in the interim. While that's not as bad as I originally thought it was going to be, that's still enough to warrant that their situation and reaction is ongoing and developing.
If I had to guess, they probably couldn't imagine it being any worse than -32% in Jul08...
(ps: I love/hate that nick...)
Avinash machado 9:57AM (2/10/2009)
At the way this is going, in a few months GM will have fewer employees than a mom and pop store.
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jc 10:55AM (2/10/2009)
The United States is going bankrupt.
Years of unchecked greed and moral sloth are taking their toll.
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