GENERAL Motors yesterday revealed that it is to lay off salaried workers, cut lorry production, suspend its dividend and borrow $2-3 billion (£1-2bn) to weather a severe downturn in the US market.
GM said the moves would raise $15bn to help cover losses and turn around its North American operations, including $10bn from internal cost-cutting and $5bn from selling some assets and borrowing against others.
"In short, our plan is not a plan to
survive. It is a plan to win," GM chairman and chief executive Rick Wagoner said in a broadcast to employees.
GM's shares fell as much as 6 per cent to a new 54-year low of $8.81, then rebounded to $9.94 in early trading yesterday – up 56 cents from Monday's close.
Chief operating officer Fritz Henderson said GM wanted to reduce its total salaried costs in the US and Canada by more than 20 per cent.
A large chunk of the reduction would come from cutting health care benefits for salaried retirees.
Several thousand jobs will be cut through normal attrition and retirements, and through early retirement and buyout offers, Henderson said.
The company could resort to involuntary layoffs but did not want to, he said.
Wagoner said the company has not made early retirement offers to salaried workers for three or four years, and he would expect good acceptance of new offers, helping GM to reach its cost-cutting goal.
GM has 40,000 salaried employees in North America.
Henderson said the company intends to reduce lorry production capacity by 300,000 units, 150,000 more than it announced in June.
The company will speed up previously announced closures of some lorry and sport utility vehicle factories.
The full article contains 294 words and appears in The Scotsman newspaper.
