Published: July 16, 2008 01:18 am            

GM: Salaried jobs, retiree health care, production to be cut

By KATIE MERX

Detroit Free Press

DETROIT — General Motors Corp. announced Tuesday it would cut salaried jobs, salaried retiree health care and 150,000 additional units of truck production, as its sales plummet because of a weak U.S. economy and high gasoline prices.

Delphi spokeswoman Claudia Piccinin said it was too early to tell what effect the GM cuts would have for workers at the Lockport plant, but said Delphi would adjust its production schedule based on its customer demand and production.

GM’s 20 percent reduction of salaried employees is something that will affect all GM plants, including the Tonawanda Powertrain facility. But this early in the planning, there’s no way to tell exactly how many people will be leaving each individual plant, said GM spokesman Dan Flores.

“We’re doing this through attrition and early retirements,” Flores said. “These are going to be voluntary activities, not mandatory separations.”

The company’s goal is to have those salaried positions cut before Nov. 1, Flores said.

GM also plans to immediately suspend dividends on its common stock and is considering selling assets and raising cash in global markets.

The goal is for the company to conserve and raise $15 billion through 2009 in an effort to survive the sales slump.

“We need to read and react as soon as possible to the market condition ... we have a big job to do,” Chairman and Chief Executive Officer Rick Wagoner said. “Our focus is led day to day around what actions we can take to build a stronger liquidity base.

“We are highly confident we have ample cash and liquidity through 2009,” Wagoner said.

The company’s future will depend on whether it can produce more fuel-efficient vehicles, because demand for trucks has fallen drastically from a few years ago, GM officials said.

”Our goal is to be the fuel economy leader,” Vice Chairman Bob Lutz said.

Wagoner said the company is undergoing an assessment of its broad global assets for possible sale, which is expected to generate $2 billion to $4 billion in cash. The company will also access global markets as the opportunity presents itself, to raise between $2 billion and $3 billion of financing.

With sales strong in Central and Eastern Europe, including Russia, GM should continue to be aggressive in marketing overseas.

        

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