August 3, 2009 / 3:25 PM / 8 years ago

GM readies deeper cuts as 6,000 workers leave

<p>The U.S. flag flies at the Burt GM auto dealer in Denver June 1, 2009. RTEUTERS/Rick Wilking</p>

DETROIT (Reuters) - More than 6,000 General Motors Co workers took buyout offers in the company’s first month after emerging from bankruptcy, and it plans to cut its hourly workforce by another 7,500 through the end of 2009.

GM, which exited bankruptcy on July 10 with U.S. government funding, said Monday that the latest round of buyouts brought the total number of its U.S. factory workers to 48,000 -- down sharply from about 114,000 only three years ago.

GM aims to reduce its U.S. hourly employment to about 40,500 by the end of the year as it slashes costs under a restructuring directed by the Obama administration.

GM spokesperson Sherrie Childers Arb said that the company does not plan to offer a new round of buyouts and will look to achieve the cuts through layoffs or by transferring workers into open positions.

The announcement came as the No. 1 U.S. automaker posted a 19 percent drop in U.S. sales for July from a year before -- an improvement over declines of about 35 percent through the first half of the year, boosted by the U.S. government’s “Cash-for-Clunkers” incentives to trade gas guzzlers for new, greener ones.

The latest job cuts add to the thousands of positions lost in the downturn for U.S. automakers that began in 2005 and forced both GM and Chrysler Group LLC to restructure under Chapter 11 bankruptcy protection.

Since 2006, about 66,000 U.S. hourly workers -- more than half of its factory workforce -- have left GM through buyouts and retirement packages as the automaker has scrambled to reduce costs in the face of slowing sales and mounting losses.

The company, now more than 60 percent owned by the Treasury, also plans to cut its white-collar workforce more than 20 percent, or 6,000 jobs, this year. Executive ranks will be cut 35 percent.

GM lost $31 billion in 2008, taking its total losses to $82 billion in the last four years. It lost its ranking as the top global automaker by vehicle sales worldwide in 2008 when it was outsold by Toyota Motor Corp.

“One of the very tough, but necessary, actions to position the company for long-term viability and success is to reduce our total U.S. workforce, both hourly and salaried employees,” said Diana Tremblay, GM vice president of labor relations.

Most of the hourly workers left the company on August 1, GM said.

Reporting by Soyoung Kim, Editing by Gerald E. McCormick and Gunna Dickson

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