GM Set To Trim 1,600 More Jobs
Tuesday, April 21, 2009
General Motors plans to lay off about 1,600 white-collar workers over the next few days, as the auto giant speeds its cost cutting to qualify for additional federal loans.
GM's North America president, Troy Clarke, sent an e-mail to employees yesterday morning, telling them the reduction was necessary to "help ensure the long-term viability of our company." Targeted employees will be told to leave by tomorrow.
"In these unprecedented times, GM is reinventing every aspect of our business, including our organizational size and structure, to create a lean and agile company," Clarke wrote.
GM, which has received $13.4 billion in federal loans, is under immense pressure to cut costs and reduce debt by June 1 to win additional government aid. If GM cannot quickly restructure on its own, the company could be forced to file for bankruptcy.
"This will be a very trying time for the entire GM team, but especially for those employees directly impacted by these actions," Clarke wrote in the e-mail. "Even for those employees staying, it will be difficult to see friends and co-workers leaving our company."
In February, GM announced it would eliminate 3,400 white-collar jobs by May 1, part of its efforts to reduce its worldwide salaried ranks by 10,000. The automaker also has begun separate negotiations with the United Auto Workers, which represents its blue-collar workforce. The company hopes to cut 47,000 jobs overall by the end of the year.
GM said it planned to spare jobs considered critical to its future, including many associated with the Chevrolet Volt, an electric car set to debut next year.
"If you're an electric vehicle engineer, you're less at risk than a marketing or communications person," GM spokesman Tom Wilkinson said.
Wilkinson said laid-off employees will receive severance equal to two weeks pay for every year of service, up to six months. The company will also help workers find other jobs for up to three months.
GM's blue-collar workforce could face even deeper cuts. More than 7,500 workers accepted buyout packages last month. On Friday, GM chief executive Fritz Henderson warned that the company plans to close more manufacturing plants than its original target of 15 facilities by 2014.
"There will be further reductions in manpower, people, that are going to affect communities, affect plants and people on the hourly and salary side of the business," he told reporters.
As part of the government-mandated concessions, the UAW is being asked to reduce GM's $20 billion obligation to a union-run trust that is supposed to fund retiree health care starting next year. The union has agreed that Ford can pay up to half of its cash contribution in company stock. But it has yet to reach a similar agreement with GM or Chrysler.
Yesterday, the UAW e-mailed members to lobby the White House and "insist that workers and retirees must be treated in a fair and equitable manner in any restructuring plans."
"We need President Obama and his auto task force to stand up for the interests of workers and retirees in these restructuring negotiations," the e-mail said.
Michigan Gov. Jennifer M. Granholm said yesterday all parties are making an effort to resolve those problems.
"But that doesn't take away the pain people feel when they get a pink slip and are shown the door," Granholm said at an automotive engineering conference in Detroit. "I want to see that there's a commitment to community and people affected by the shift in focus and dynamics."