GM cutting more white-collar jobs and employee benefits

John Neff — Thu, 23 Oct 2008 17:22:00 EST

Filed under: Hirings/Firings/Layoffs, GM, Earnings/Financials

Back in July, General Motors announced its plan to reduce salary spending by 20% and its white-collar workforce by 15% or 5,100 jobs. Those workers are out of a job on November 1st, but a new round of job cuts means even more empty cubicles for the world's largest automaker. The Detroit News is reporting that GM plans to lay off more white-collar workers despite having already reached its goal of reducing the company's salaried workforce by 5,100 jobs. While a specific number of how many more jobs would be cut wasn't given, a letter sent to GM execs confirms that more pink slips will be handed out by the end of this year and into early 2009. To further reduce spending, GM is also canceling certain employee benefits including its 401k matching program, tuition reimbursement and adoption assistance programs. All of these spending cuts are meant to help GM weather the storm until the auto industry bounces back from its own recession. We're sure that's little consolation to the men and women who are out of a job in the mean time, but with fewer and fewer people buying new cars and trucks, GM has little choice.

[Source: The Detroit News]

GM cutting more white-collar jobs and employee benefits originally appeared on Autoblog on Thu, 23 Oct 2008 17:22:00 EST. Please see our terms for use of feeds.

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GM to cut 20% in overall white collar costs, cut truck production by over 300k

Chris Shunk — Tue, 15 Jul 2008 09:25:00 EST

Filed under: Hybrid, SUV, Truck, Hirings/Firings/Layoffs, GM

GM CEO Rick Wagoner announced sweeping organizational challenges designed to cut costs by $15 billion by the end of 2009. The Detroit automaker is looking reduce costs in an increasingly difficult market that could drop to 14 million units per year with fewer SUVs and trucks leaving dealer lots. Among the cost cutting measures, GM plans on reducing organizational costs by $10 billion, and another $5 billion by selling assets and working in the capital markets. Here are some of the highlights from the press conference:

Reduce salaried employee expenses by 20 percent through retirements, voluntary separations, buyouts, and other separation initiatives
Cut all salaried retiree health care after age 65, and use the over funded retirement fund to increase pension pay
No raises through 2009
Executive discretionary bonus elimination
Reduce sales and marketing expenses through reductions in events, motorsports, and ad spending
Cut truck production by 300k units by 2009
Reduce product development budget for 2009 to $7b by delaying launches of next generation trucks and SUVs and cutting V8 development
Increase spending on alternative powertrains
Push back blue collar retirement VEBA payment from 2008 to 2010, saving $1.7b
Eliminate stock dividend payouts effective immediately to save $800m
Raise $4 billion to $7 billion through asset sales and financing using some $20 billion in assets as collateral
Continue review of the Hummer brand

GM is under quite a bit of pressure right now, and with stocks sliding to $9.63 per share, the General didn't have the luxury of waiting until its August shareholder meeting to unveil its plans. Now it's up to Wall Street to determine whether $15b in savings is enough to turn things around.

UPDATE: Wagoner addressed GM employees and shed some light on what products are in the pipeline.

The Chevrolet Cruze will begin production in the U.S. in 2010
The Chevrolet Equinox will go into production in May of 2009, equipped with a direct-injected 2.3-liter four-cylinder engine.
The Cadillac CTS coupe has been green lit and is coming in the summer of '09.
The Cadillac CTS Sportswagon will be on the market in next spring.
The next Cadillac SRX, inspired by the Provoq concept, will go on sale globally in 2009.
The rear-wheel-drive Buick Invicta will be released in the U.S. next spring.
The Saab 9-4X is on its way in late 2009.

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GM to cut 20% in overall white collar costs, cut truck production by over 300k originally appeared on Autoblog on Tue, 15 Jul 2008 09:25:00 EST. Please see our terms for use of feeds.

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