GM to cut 5,000 jobs from salaried ranks

7/31/2008

DETROIT - General Motors Corp. plans to cut its U.S. salaried work force by 15 percent, eliminating about 5,000 jobs by year's end as part of a plan to cut costs by $10 billion by the end of 2009, company officials said yesterday.

The company already has announced significant cuts toward its restructuring.

On July 15, the company disclosed a plan to save $10 billion. Part of the plan was suspension of its quarterly dividend.

GM has lost money the last three years, and record gasoline prices and a weakening economy may extend that streak this year.

Also part of the July 15 announcement was the plan to cut its white-collar costs by more than 20 percent including eliminating health care coverage for salaried retirees eligible for Medicare and raises for salaried employees through 2009.

Those moves will save the company $1.5 billion.

In total, the Detroit Three automakers are trimming nearly 10,000 white-collar jobs this year in addition to the more than 25,000 eliminated since 2000 in North America.

GM has about 32,000 U.S. salaried workers. It also plans to cut 15 percent of its Canadian salaried work force and plans to complete those job cuts also by the end of the year.

Offers to leave the company voluntarily are expected to be made in the next month or so, with a probable decision deadline of October.

GM sales fell 18.5 percent in June and are off 16.5 percent for the year.

The company is to report second-quarter earnings tomorrow.