GM to cut 25,000 jobs by '08

[HenryTo]

Aims to cut 25,000 jobs (13.8%) out of a total of 181,000 in North America by 2008 - just after the current union contract ends. GM is okay for the next couple of years but there will need to be drastic concessions from the union or else.
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GM to cut 25,000 jobs by '08
CEO says automaker plans unspecified number of plant closings.
June 7, 2005: 9:54 AM EDT

NEW YORK (CNN/Money) - Embattled automaker General Motors Corp. anticipates an unspecified number of plant closings in the next three and half years to cut U.S. employment by 25,000 workers, Chairman and CEO Rick Wagoner told shareholders Tuesday.

The head of the world's No. 1 automaker did not give any details other than to say GM needs to cut capacity by the end of 2008.

He said the company's goal is to trim U.S. capacity so that the company gets to 100 percent utilization or better.


GM (up $0.58 to $31.00, Research) also announced plans to buy more components from suppliers outside the United States, and reported it couldn't yet be sure if it would win needed health care cost reductions from the United Auto Workers union.

A spokesman for the union wasn't immediately available for comment.

GM's UAW contract essentially forces it to pay employees during the life of the contract, even the hourly worker's plant is closed and he or she is laid off. But those protections only run through fall of 2007, when the current four-year pact with the union ends.

GM's Web site says it now has about 181,000 employed in North America, including plants in Canada and Mexico.

Wagoner said GM is committed to trying to win union approval for health care cost savings under the current labor agreement, but added that he couldn't promise shareholders he'd be successful.

"In recent weeks, we have been in intense discussions with the UAW and our other unions focused on a cooperative approach to significantly reduce our health care cost disadvantage," he said. "All parties are working hard on it, in the spirit of addressing a huge risk to our collective futures while providing greater security and good benefits for our employees."

Wagoner said that, for now, GM is committed to trying to trim health care costs in cooperation with the union. His prepared remarks did suggest that there are other options available to the company to save on health care if the union does not agree to changes, although he added, "I don't believe that it serves a useful purpose to speculate on that."

[nodoodahs]

This month, everyone's a GM employee! Of course, next month, we're all laid off!

http://news.moneycentral.msn.com/ticker/article.asp?Symbol=US:GM&Feed=AP&Date=20050602&ID=4859416

GM to Offer Employee Discount to Everyone

All Associated Press NewsDETROIT (AP) - In an attempt to boost sluggish sales, General Motors Corp. said Wednesday it will offer the same discount it gives to its employees to anyone who buys a new GM car or truck in the next month.

The program includes all GM vehicles except the Chevrolet Corvette and GMC medium duty trucks, the world's largest automaker said. The offer runs June 1 to July 5.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[HenryTo]

A lot of drastic changes will continued to be made at GM - you can be sure of that.
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Kerkorian stake in GM now at 7.2%
By Padraic Cassidy, MarketWatch
Last Update: 9:59 AM ET June 8, 2005

NEW YORK (MarketWatch) - Shares of General Motors Corp. jumped early Wednesday as investor Kirk Kerkorian said his Tracinda Corp. had raised its stake in the automaker to 7.2%.

General Motors (GM: news, chart, profile) led all Dow Jones Industrials Average components, advancing $1.27 to $32, or up 4.4%.

Tracinda offered to buy up to 28 million shares at $31 each, and by the 5 p.m. deadline Tuesday, the Kerkorian-led investment unit had acquired about 18.9 million shares.

It now owns 40.9 million shares of GM, up from 22 million, or 3.9%.

General Motors, hit by falling sales, soaring costs and recent credit downgrades, said Tuesday it will cut at least 25,000 jobs in the U.S. by 2008 to generate $2.5 billion in annual savings.

Along with the job cuts, which target about 13.8% of GM's U.S. work force, the company plans to close additional assembly and component plants to fully utilize capacity as part of a four-step plan to get GM North America back to profitability. See related story.

Shares of the No. 1 U.S. automaker rose about 1% after the announcement Tuesday.

[HenryTo]

Looks like the CEO of Toyota is just telling it like it is:
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Toyota chief fears GM, Ford demise
CEO says U.S. policy may turn against Japanese automakers if American carmakers collapse.
June 8, 2005; Posted: 7:05 a.m. EDT (1105 GMT)

OSAKA, Japan (Reuters) - The outspoken chairman of Toyota Motor Corp. said on Wednesday he feared the possibility that U.S. policy could turn against Japanese auto makers if local giants such as GM and Ford were to collapse.

"Many people say the car industry wouldn't revisit the kind of trade friction we saw in the past because Japanese auto makers are increasing local production in the United States, but I don't think it's that simple," Hiroshi Okuda told a news conference.

"General Motors Corp. (Research) and Ford Motor Co. (Research) are symbols of U.S. industry, and if they were to crumble it could fan nationalistic sentiment. I always have a fear that that in turn could manifest itself in policy decisions," he said, speaking as the head of the nation's biggest business lobby, the Japan Business Federation.

Okuda, who as chairman is removed from the automaker's day-to-day operations, raised eyebrows and invited criticism on both sides of the Pacific when he said two months ago that Toyota should think about ways in which it could aid U.S. auto makers -- such as by raising product prices -- as they reel under massive health-care costs and sliding sales.

In the latest sign of tough times at Detroit's Big Two, GM Chief Executive Rick Wagoner told shareholders Tuesday of plans to cut at least 25,000 manufacturing jobs and close more U.S. assembly and component plants over the next few years.

Both GM and Ford have been cutting back output as they lose sales to Asian brands led by Toyota, which now controls 13.4 percent of the U.S. car market, the world's biggest.

Asked what he thought of GM's latest restructuring plan, Okuda said: "If you think about GM's current output volume and vehicle lineup, laying off 25,000 to 30,000 employees is inevitable."

GM, the world's biggest auto maker followed by Toyota, lost $1.1 billion in the first quarter and is riding out its worst financial crisis in more than a decade. It has been closing and idling plants over the past four years and will have cut its annual North American assembly capacity to 5 million vehicles by the end of this year from 6 million in 2002.

Meanwhile, top Japanese auto makers are adding jobs and assembly lines in North America to meet growing demand there, prompting executives, including Toyota President Fujio Cho, to dismiss concerns that their success would reignite a political backlash.