GM Slashing 10,000 White-Collar Jobs, Cutting Pay

By Kendra Marr
Washington Post Staff Writer
Wednesday, February 11, 2009

With its federal restructuring deadline looming, General Motors said yesterday it would cut 10,000 white-collar jobs.

The job reductions will trim GM's salaried workforce to 63,000 from 73,000 worldwide this year. In the United States, about 3,400 of GM' s 29,500 salaried employees will be let go.

Many of the reductions will take place by May 1. At the same time, the base pay of higher-level U.S. executives will be lowered by 10 percent, while other salaried employees will face cuts of between 3 and 7 percent.

"These are extremely challenging times for the global auto industry and for General Motors -- certainly the toughest I have seen in my 30-plus years with the company," GM chief executive G. Richard Wagoner Jr. said in an e-mail to U.S. executives. "In response, we are taking a number of necessary actions to position the company for long-term viability and success. Our viability plan is very aggressive and requires significant sacrifices -- from all GM stakeholders, including management, employees, unions, suppliers, dealers, investors and debt holders."

GM must present its restructuring plan to the government Feb. 17. The company has received $9.4 billion in aid from the Treasury Department, and expects to get $4 billion more if its strategy satisfies the government.

Both GM and Chrysler plan to continue meeting with the United Auto Workers and bondholders in the coming days. The Treasury Department, meanwhile, has hired two law firms with bankruptcy experience to advise it on the restructuring, stoking fears that the companies could be pushed into bankruptcy.

But Sen. Carl M. Levin (D-Mich.) said he has been assured that the hiring of these consultants is not an indication that administration officials plan to press GM or Chrysler into such action. "Bankruptcy is not an option," he said. "It's a nonstarter."

Wagoner was on Capitol Hill yesterday to meet with the congressional leaders who will oversee legislation involving the auto industry: Rep. Henry A. Waxman (D-Calif.), chairman of the House Energy and Commerce Committee; Rep. Edward J. Markey (D-Mass.), chairman of the Select Committee on Energy Independence and Global Warming; and Sen. John D. Rockefeller IV (D-W.Va.), chairman of the Senate Commerce, Science and Transportation Committee.

"I had a constructive discussion with Mr. Wagoner," Waxman said in a statement. "The automobile industry is and must remain a vital part of our economy. The future of the American auto industry lies in developing a new generation of clean cars that will provide new jobs and reduce the threat of global warming. Reviving the auto industry is an area where good economics and good environmental policy go hand in hand."

In its first restructuring plan in December, GM told Congress that by 2012 the company aimed to reduce its U.S. workforce -- 96,537 salaried and hourly workers in 2008 -- by at least 22 percent. "The whole irony is the whole bailout was to save jobs, but the only way to continue is to operate much smaller and cut jobs," said Gary N. Chaison, professor of industrial relations at Clark University in Worcester, Mass.

The U.S. salaried workforce, from management to engineers to technical specialists, already has shrunk considerably from its high of 44,000 people in 2000.

GM spokesman Tom Wilkinson declined to say where current cuts would come from, but indicated that the company would reinforce its core brands: Chevrolet, Cadillac, GMC and Buick. In December, the company told Congress that it hoped to sell its Saab division, turn Pontiac into a niche brand and begin discussions with Saturn dealers to fold or sell the division. "We're looking to align our resources behind areas of the business critical to the viability of the company," he said.

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