DETROIT, (AP):
GENERAL MOTORS Corp. (GM) will eliminate 30,000 jobs and close nine North American plants by 2008 as part of an effort to get production in line with demand and position the world's biggest automaker to start making money again after absorbing nearly US$4 billion in losses so far this year.
The announcement Monday by Rick Wagoner, GM's chairman and chief executive officer, represents 5,000 more job cuts than the 25,000 that the automaker had previously indicated it planned to cut.
United Auto Workers union leaders called the cuts "extremely disappointing, unfair and unfortunate." The 30,000 job cuts represent about nine per cent of GM's global work force of about 325,000 people.
"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," Wagoner told employees. "But these actions are necessary for GM to get its costs in line with our major global competitors. In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible."
The plan will cut the number of vehicles GM is able to build in North America by about 1 million a year by the end of 2008. GM will be able to build about 4.2 million vehicles a year in North America, down 30 percent from 2002.
GM said assembly plants will close in Oklahoma City, Lansing, Mich., Doraville, Ga., and Ontario, Canada. GM also listed Spring Hill, Tenn., as a plant closing even though one production line will remain open there. A shift also will be removed at a plant in Moraine, Ohio.
"Personally, I've been speculating this would come down the pike for a while, and I've been trying to look for work elsewhere," said Bob Tyrrell, 45, who has worked the second shift at the Oklahoma City plant since 1979. "I didn't think it would be this quick or this drastic."
Mike O'Rourke, president of United Auto Workers Local 1853 in Spring Hill, said GM leaders need to change approaches to be successful. "They need to design cars that sell," O'Rourke said.
An engine facility in Flint, Mich., will close, along with a separate powertrain facility in Ontario and metal centres in Lansing and Pittsburgh.
Wagoner said GM also will close three service and parts operations facilities. They are in Ypsilanti, Mich., and Portland, Ore. One other site will to be announced later.
GM said the plan is to achieve US$7 billion in cost reductions on a running rate basis by the end of 2006 -- US$1 billion above its previously indicated target.
Cuts are expected to come through attrition and early retirement programs. The company said it would take a "significant" restructuring charge in conjunction with the changes and any related early retirement program. Details of those charges would be released later, GM said.
