GM staff cuts held about to start

Furlough of hundreds expected Tuesday

March 25, 2006|By JIM MATEJA AND RICK POPELY | JIM MATEJA AND RICK POPELY,CHICAGO TRIBUNE

General Motors Corp., reeling from $10.6 billion in losses last year, will fire hundreds of its U.S. salaried employees starting next week, according to people familiar with the plan.

GM's engineering staff has been told all leaves have been canceled. They have been ordered to report for work Tuesday morning - what employees already are calling "Black Tuesday" - with company cars and keys.

GM wouldn't comment on Tuesday's meeting, but insiders said only the engineering staff is affected - for now.

The firings will be followed by another round in April, according to at least three GM people with direct knowledge of the plan who declined to be identified because it hasn't been made public. Those cuts could come in sales and marketing.

GM spokesman Steve Harris had no comment yesterday.

The ailing automaker earlier this week had offered buyouts to its 113,000 hourly workers, with the goal of eliminating 30,000 jobs by 2008. GM has about 36,000 salaried workers, including an unspecified number of contract workers. About 2,800 jobs were cut in 2005, including 500 contract workers.

Since 2000, GM's salaried work force has dropped from 44,000 people, largely through retirement and attrition.

The workers will get GM's salaried severance package with no additional payments, the people said. Hourly workers were offered buyouts of up to $140,000 and retirement incentives.

Chief Executive Officer G. Richard Wagoner Jr. plans to reduce losses by slashing costs and jobs and selling assets while bolstering revenue by redesigning vehicles.

"They're liquidating, they're firing, they're retiring," said Sean P. McAlinden, a labor analyst at the Center for Automotive Research in Ann Arbor, Mich. "This is a GM that's getting in shape much faster than it's ever before in any past restructuring."

Analysts say the timing of white-collar reductions so soon after announcing the union buyouts is significant. It shows the United Auto Workers, the union that represents hourly workers, that the salaried work force is making sacrifices to return North American operations to profitability.

Wagoner said in November that part of the automaker's $7 billion restructuring costs included $1.5 billion to eliminate up to 7 percent of the salaried work force in 2006 through attrition and involuntary separation. But he didn't set a timetable.

Rick Popely and Jim Mateja write for the Chicago Tribune.

Bloomberg News contributed to this article.

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