GM will cut 4,000 salaried workers
General Motors Corp. started providing details to salaried and executive employees Tuesday about severance and early retirement offers as the automaker moves to cut about 4,000 jobs by Oct. 1.
The cuts are part of GM's sweeping restructuring while in Chapter 11 bankruptcy and will slash salaried ranks 20 percent and executive employees almost 35 percent. Although GM is seeking volunteers, involuntary job losses are expected, according to the automaker.
Most of the job cuts will hit workers in southeastern Michigan, which is already reeling from pending GM factory closures and the blue-collar jobs that will be lost. The automaker said June 1 it is eliminating an estimated 8,900 jobs at five area plants as part of broad manufacturing cuts in several states.
Tuesday's announcement also put hard numbers behind the percentage cuts to the white-collar work force outlined by GM President and CEO Fritz Henderson last week.
"They are retaining the workers they need and discarding the ones they can't afford," said analyst Aaron Bragman of IHS Global Insight. "They have to survive the next couple of years to even think about a long-term strategy. This is about getting the enterprise healthy."
The automaker had launched plans earlier this year to cut 3,400 salaried jobs, and the new cuts mean GM will eliminate more than 6,000 white-collar jobs by the end of this year. GM started the year with 29,650 white-collar workers and wants to have 23,500 at the end of 2009, GM spokesman Tom Wilkinson said.
Staff will have two options:
• Accept a severance package that gives salaried workers up to six months pay and benefits; executive employees can qualify for up to a year's worth.
• Take an early retirement incentive that, for example, would let an eligible worker retire at 58 with benefits they would have received at age 62.
Many of the targeted employees are tied to plants scheduled to close or brands that will be sold or eliminated, Wilkinson said. GM is selling the Saab, Saturn and Hummer brands and phasing out Pontiac.
"The ideal goal is to reshape the staff to support the new company," Wilkinson said. Detroit News