myles
08-06-2005, 04:21 AM
GM plans to cut 25,000 jobs in US
General Motors is planning to cut 25,000 jobs in the US as it tries to recover from poor performance there.
The US car giant is to shut down parts and assembly plants in an attempt to save $2.5bn (£1.4bn) a year.
The cutbacks were announced by chief executive Rick Wagoner as part of a four-step plan to return the firm to financial health.
The carmaker, the biggest in the US domestic market, made a loss of $1.3bn for the first three months of 2005.
The loss would have been even larger without healthy profits on GM's financial services arm.
The company has already announced plans to cut 12,000 jobs from its European units, including Saab and Opel.
Tuesday's announcement saw GM shares gain 2.3% to $31.11.
SUV shortfall
In a "state of the business" speech to investors, Mr Wagoner said his plans could see more than 25,000 jobs disappear by 2008.
The firm's most recent performance had seen GM fall short of its expectations for market share, he acknowledged.
In addition, sales of lucrative sports utility vehicles (SUVs) were flagging in favour of smaller cars on which the firm earns slimmer profits, as high fuel costs hit home
To recover, he said, GM needed to slim down and strengthen its eight brands with better quality and lower costs.
'Intense discussions'
The plan calls for North American manufacturing capacity to fall from six million units a year to five million.
It also sees a focus in North America on Chevrolet and Cadillac, with the other six marques - GMC, Pontiac, Buick, Saturn, Saab and Hummer - focused on targeted niche markets.
Mr Wagoner also noted GM's high historic healthcare costs - as much as $1,500 per vehicle produced.
GM had been in "intense discussions" with unions for weeks in the hope of reaching a deal on health costs.
Although he warned that the discussions could yet fall apart, he promised to do everything possible - including extending the time devoted to talks - to avoid a breakdown.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4070556.stm
Published: 2005/06/07 16:51:07 GMT
General Motors is planning to cut 25,000 jobs in the US as it tries to recover from poor performance there.
The US car giant is to shut down parts and assembly plants in an attempt to save $2.5bn (£1.4bn) a year.
The cutbacks were announced by chief executive Rick Wagoner as part of a four-step plan to return the firm to financial health.
The carmaker, the biggest in the US domestic market, made a loss of $1.3bn for the first three months of 2005.
The loss would have been even larger without healthy profits on GM's financial services arm.
The company has already announced plans to cut 12,000 jobs from its European units, including Saab and Opel.
Tuesday's announcement saw GM shares gain 2.3% to $31.11.
SUV shortfall
In a "state of the business" speech to investors, Mr Wagoner said his plans could see more than 25,000 jobs disappear by 2008.
The firm's most recent performance had seen GM fall short of its expectations for market share, he acknowledged.
In addition, sales of lucrative sports utility vehicles (SUVs) were flagging in favour of smaller cars on which the firm earns slimmer profits, as high fuel costs hit home
To recover, he said, GM needed to slim down and strengthen its eight brands with better quality and lower costs.
'Intense discussions'
The plan calls for North American manufacturing capacity to fall from six million units a year to five million.
It also sees a focus in North America on Chevrolet and Cadillac, with the other six marques - GMC, Pontiac, Buick, Saturn, Saab and Hummer - focused on targeted niche markets.
Mr Wagoner also noted GM's high historic healthcare costs - as much as $1,500 per vehicle produced.
GM had been in "intense discussions" with unions for weeks in the hope of reaching a deal on health costs.
Although he warned that the discussions could yet fall apart, he promised to do everything possible - including extending the time devoted to talks - to avoid a breakdown.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4070556.stm
Published: 2005/06/07 16:51:07 GMT