Posted on 11/21/2005 7:00:40 AM PST by traumer
DETROIT (AP) -- General Motors Corp. will eliminate 30,000 manufacturing jobs and close nine North American assembly, stamping and powertrain plants by 2008 as part of an effort to get production in line with demand and return the company to profitability and long-term growth.
The announcement Monday by Rick Wagoner, chairman and CEO of the world's largest automaker, represents 5,000 more job cuts than the 25,000 that the automaker had previously indicated it planned to cut.
GM said the assembly plants that will close are in Oklahoma City, Lansing, Mich., Spring Hill, Tenn., Doraville, Ga., and Ontario, Canada. A shift also will be removed at a plant in Moraine, Ohio.
An engine facility in Flint, Mich., will close, along with a separate powertrain facility in Ontario and metal centers 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.
"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."
GM said the plan is to achieve $7 billion in cost reductions on a running rate basis by the end of 2006 -- $1 billion above its previously indicated target.
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.
Any early retirement program would require an agreement with its unions, which GM said it hopes to reach soon.
GM shares rose 18 cents to $24.23 in early trading on the New York Stock Exchange. Its shares traded below $21 last week at an 18-year low.
Wagoner said last month the automaker would announce plant closures by the end of this year to get its capacity in line with U.S. demand. GM plants currently run at 85 percent of their capacity, lower than North American plants run by its Asian rivals. The plant closings aren't expected to be final until GM's current contract with the United Auto Workers expires in 2007.
GM has been crippled by high labor, pension, health care and materials costs as well as by sagging demand for sport utility vehicles, its longtime cash cows, and by bloated plant capacity. Its market share has been eroded by competition from Asian automakers led by Toyota Motor Corp. GM lost nearly $4 billion in the first nine months of this year.
The automaker could be facing a strike at Delphi Corp., its biggest parts supplier, which filed for bankruptcy protection last month. GM spun off Delphi in 1999 and could be liable for billions in pension costs for Delphi retirees.
GM also is under investigation by the U.S. Securities and Exchange Commission for accounting errors.
Last week, after the automaker's shares fell to their lowest level in 18 years, Wagoner sent an e-mail to employees saying the company has a turnaround strategy in place and has no plans to file for bankruptcy.
GM is not the only U.S. automaker faced with the need to cut costs.
Last week, Ford Motor Co. told employees it plans to eliminate about 4,000 white-collar jobs in North America early next year as part of a restructuring plan. Ford said the cuts will be made in part through attrition and elimination of some agency and contract positions.
The plans were outlined Friday in an e-mail to employees from Mark Fields, president for the Americas.
The cuts will be in addition to 2,750 North American salaried jobs that Ford earlier said it wanted to cut by the end of 2005. Ford started the year with about 35,000 salaried workers in North America.
Dearborn-based Ford reported a third-quarter loss of $284 million, including a loss of $1.2 billion before taxes in North America.
Union Yes.
Good by Detroit - hello China... !
wto,nafta
search - I did "30,000"
No way the demigods in congress who harassed the profitable oil biz will investigate how their laws and regs are impacting the auto biz and its employees investigating, perhaps, how anticompetitive union practices will force auto parts companies out of the country rather than allowing them to adapt to changing conditions.
We have two operating assembly plants is Lansing now,
the new Cadillac plant which just opened 3-4 years ago.
Also small plant that makes specialty cars like the Chevy SSR
We have another assembly plant that is currently under construction with 2006 production scheduled
So possibly the small SSR plant.
We do have a parts plant also.....hmmmmmm I wonder but I imagine its the small plant
Saturn plant is in Spring Hill
Look for the Union label............
Union death wish materializes.
They're giving people plenty of notice if the plants won't be closed until 2007. Perhaps some can move to the non-union plants that are operating in the south.
"Good by Detroit - hello China... !"
I expected the gleeful giggles on this thread.
I hope you all remain gleeful and continue giggling when the economy slows significantly.
Or would you have me believe that GM can cut 30k jobs, and we can have the cascading effects of other jobs lost, and it's GOOD for the economy?
Some of you are as anti-American as the folks at DU.
Unions are totally to blame, management is the good guys, always. Lock the doors and let the Chinese do it for 80 cents an hour.
"Unions are totally to blame, management is the good guys, always."
Amazing how people see this, isn't it?
No accountability for the morons who agreed to stupid union demands.
No recognition that with stupid management, doesn't matter what you pay the workers, they will eventually be back where they are now.
I used to stongly favor GM cars. It's a shame, I doubt I'll ever buy another.
Gold star for you!
Regardless none of us want to see people suffer... ( well unless it is clinton and their ilk) But the same can be said every time the union got an agreement to pay unskilled labor 40-50 dollars and hour. They were the gleeful ones. They couldn't give a crap if they pushed the cost of owning a vehicle up 5 fold over the last 20 years. It was a false economy that they were paying into and they cut their own throats by driving the costs up so much that the corps look international for cheap labor.
What do union haters make of that?
Those 30,000 jobs will translate into 500,000 by the time the dust settles. It's going to be a bumpy ride and Ford won't announce it's restructuring until January.
Don't try logic with some of these people. It just doesn't work. They can't see beyond their viseral hatred.
Just like DU'ers.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.