Dee-Ann Durbin, The Associated Press
July 30, 2008 - 7:10 p.m.
DETROIT - General Motors Corp. plans to cut 15 per cent of its U.S. and Canadian salaried workforce - or around 5,100 jobs - by means of Nov. 1 as part of a plan to slash billions of dollars in costs and help the automaker ride out a slump in U.S. sales.
A GM official declined to confirm the specific poetry Wednesday but indicated they were in most cases accurate. The official asked not to subsist named because the company had not planned to release the numbers until later.
GM Canada spokesman Stew Low also declined to comment, saying the company hasn’t announced any new cuts.
Word of the expected cuts came two days before GM plans to release its second-quarter earnings report. Analysts surveyed by Thomson Financial are predicting a loss of $2.63 per share on revenues of US$44.6 billion amid plummeting U.S. truck and sport utility vehicle sales and restructuring costs.
GM’s sales outside North America grew 10 per cent in the first half of this year thanks to strong growth in Russia, Brazil and other emerging markets. But it wasn’t sufficiency to keep Toyota Motor Corp. from taking the sales lead, or to set-off losses at abiding-place. GM’s U.S. sales ruthless 16 per cent in the first six months of this year, sharper than the industrywide decline of 10 by cent.
GM also is expected to incur heavy losses because of its share in GMAC Financial Services, that before-mentioned this week it was suspending leasing incentives in Canada on this account that of a steep drop in used vehicle values. GMAC, which is partly owned by GM, is scheduled to report earnings Thursday.
GM announced a $15 billion cost-cutting and cash-raising plan July 15 after its shares hit a 54-year low. The automaker said it planned to cut thousands of salaried and hourly jobs, sell assets, interrupt its dividend and eliminate health perplexity for salaried retirees over age 65.
As part of that plan, GM said it would cut white-collar costs in the U.S. and Canada by more than 20 per cent, but it wouldn’t affirmation how divers workers would leave. GM president and chief operating magistrate Fritz Henderson said GM hoped most of the cuts would be made through attrition, retirements and buyout offers, however that the company would consider involuntary layoffs.
Earlier this summer, General Motors announced it was chopping thousands of blue-collar jobs and shutting down several plants, including a truck assembly operation in Oshawa, Ont. that employs 2,600 workers, as the company copes with a big globule in sales of gas guzzling SUVs and trucks.
GM, Ford Motor Co. and Chrysler LLC all have announced salaried layoffs in recent weeks as the U.S. place of traffic stumbles through its slowest year in more than a decade thanks to high gas prices and a weak economy. Ford plans to cut 15 per cent of its salaried costs by dint of. Friday, while Chrysler LLC plans to cut 1,000 salaried jobs worldwide by Sept. 30.
The deteriorating U.S. market has forced layoffs at other automakers as well. Nissan North America Inc. also offered buyouts to on all sides 6,000 salaried and continually employees at its two Tennessee plants Wednesday. Toyota is maintenance nearly 5,000 workers on the job despite U.S. plant shutdowns but has laid off 700 temporary workers in recent months.
GM’s cuts are part of a multiyear downsizing viewed like the company struggles to arrange to its shrinking U.S. market have a portion of. GM had 44,000 U.S. salaried workers in 2000; that had dropped to 32,000 by the end of last year. The society’s U.S. hourly work force dropped by greater quantity than half to 57,000 last year, and an additional 19,000 hourly workers took buyouts this month.