Troubled US automaker General Motors is planning to cut white-collar jobs in the United States because of rising financial problems, a source close to the situation said Thursday.
The source confirmed a letter published in the online The Wall Street Journal on Thursday from GM chief executive Rick Wagoner and chief operating officer Fritz Henderson.
Addressed to US-based GM executives, the letter said its voluntary employee buyout program to cut costs was incapable of countering the negative fallout from the global financial crisis on the North American and western European markets.
“The global economic outlook remains very concerning. As a result, actions are being taken throughout GM's global operations to address our increasing need to conserve cash,” wrote Wagoner and Henderson.
“Here in the US, we need to reduce our salaried and contract workforce by even more than we anticipated. In this regard, we expect to initiate involuntary separations in some areas of the business, late this year and early in 2009.”
The letter did not say how many jobs would be eliminated.
Wagoner and Henderson also unveiled changes in salaried employee benefits, including the suspension of a stock savings match and other reimbursement programs.
“We regret needing to take these actions, but they are necessary based upon current business conditions,” they said.
In the 2008 voluntary departure program that was nearing its end, more acceptances than initially expected had been received, they said.
The new austerity measures come as the largest US automaker scrambles to fight a sharp slowdown in the US economy that has slammed the auto industry.
GM and its two major rivals Ford and Chrysler are under pressure as US consumers radically shifted away from their gasoline-guzzling vehicles this year amid high gas prices.
The company has undertaken a vast restructuring program since 2005, shutting factories and renegotiating labor union contracts to cut costs.
Since 2005, GM has piled up more than 66 billion dollars in losses, shed 30,000 blue-collar jobs and 4,000 salaried employees.
It currently employs 74,000 blue-collar workers and 4,000 white-collar workers worldwide.
Speculation has mounted on unconfirmed media reports that GM is in tie-up talks with Chrysler because of its financial problems.
Contacted by AFP, GM said it would announce in early November the results of its buyout program, and declined to say whether international jobs would be cut.
“GM, like most corporations, continues to align its resources with its business needs to create a more competitive company for the long term,” said Tom Wilkinson, a GM spokesman.
“We will continue to assess our overall staffing needs,” he added. “Any decisions or actions will be shared directly with employees.”
