Tuesday, June 07, 2005
Breaking More Downsizing: GM Plans to Cut 25,000 U.S. Jobs by 2008
GM Plans to Cut 25,000 U.S. Jobs by 2008
By JOHN PORRETTO, AP Auto Writer 3 minutes ago
WILMINGTON, Del. - General Motors Corp. plans to eliminate 25,000 jobs in the United States by 2008 and to close plants as part of a strategy to revive its struggling North American operations.
Speaking to shareholders at GM's 96th annual shareholder meeting in Delaware Tuesday morning, Chairman and Chief Executive Rick Wagoner said the capacity and job cuts will generate annual savings of roughly $2.5 billion.
Wagoner revealed the cutbacks as he laid out a four-step strategy to revive GM's North American business, the biggest and most troubling part of the world's largest automaker.
He noted that the company's current $1,500 per worker health-care expense puts GM at a "significant disadvantage versus foreign-based competitors," and said GM has conducted "intense discussions" with the unions about how to reduce health-care costs.
General Motors shares rose 47 cents, or 1.6 percent, to $30.89 in early trading on the
New York Stock Exchange.
Billionaire investor Kirk Kerkorian's offer to purchase 28 million GM shares at $31 apiece, boosting his stake to about 9 percent from 4 percent, expires later today.
In the cost-reduction area, Wagoner said it was vital for the company to improve efficiency at its manufacturing plants. He said that plant closings and idlings in recent months have reduced assembly capacity in North America from 6 million in 2002 to 5 million by the end of this year.
It was not immediately known which GM plants would be closed.
"Let me say up front that our absolute top priority is to get our largest business unit back to profitability as soon as possible," Wagoner said.
Messages were left Tuesday morning with the United Auto Workers' and a GM spokeswoman for manufacturing issues.
GM has already closed several facilities this year. The company shut a factory in Linden, N.J., in April and a factory in Baltimore in May, affecting around 2,000 employees. The company also closed two plants in Lansing, Mich., last month, although those 3,500 employees are expected to find work at other GM facilities in the city.
AP Auto Writer Dee-Ann Durbin in Detroit contributed to this report.
On the Net,
General Motors Corp.: http://www.gm.com