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.
"Regardless none of us want to see people suffer... "
I disagree. There are many here who delight in union workers suffering. They view a union worker's existance as an affront to them.
The people to blame here are the union leaders, and corporate management. If I ask for $100/hr and you agree to pay it, then you go broke, it's my fault? No, you are supposed to know what you can pay, my job is to do what you pay me for, right? Unless you hired me as your business manager, that's the only way I can see the employee being to blame for taking what's offered.
Management never held the line, and didn't care if they had to raise prices to compensate for overpaying unions.
Unions got too powerful, and too corrupt, but management didn't fight.
Regardless who is to blame, this is a sad story for all of us. GM is big, very big. And the loss of jobs will affect the economy in a big way. Might want to move some of your portfolio into bonds.
"I find it odd that foreign auto companies come here, are unionized, and they make a good profit."
I don't think they all are unionized, are they? (e.g. the ones down south).
Anyway, even if they were all unionized and under the same contract, it wouldn't catch up with them until a lot of their employees started retiring.
That's the way it is w/ the old American car makers. They were able to promise those guys the moon as long as it was "later on somtime". Now that later on is here, they'll end up dumping their unfunded liabilities on the US gvt via PBGC.
"What do union haters make of that?"
They never acknowledge it. They continue on with their venom of how the union is the same thing as communism.
If you mention the GM plant in California that was closed down, and Toyota reopened it, and made a profit, they won't even address that point. They continue to blame the workers, (who happen to be their neighbors), and root for the jobs to go to China, (which happens to be communist).
Idiots who favor hate over logic. And I re-iterate, are just as un-American as DU'ers.
The middle class of America is being destroyed bit by bit and the sheep see only their own welfare.
If GM goes bankrupt, the likely scenario is that they will dump their pension liabilities on the taxpayers. The major airlines will do the same.
You got this exactly right. Some of these morons think it is better to provide jobs in a communist country than seek to provide jobs in America.
It was once said that the Mafia, the government and big business are all the same. Please add communism to the mix and remove the Mafia. Only the Mafia works for the benefit of its family. American government and big business work to do the most damage possible by doing as much business with communist china as possible.
Somehow many people on FR have the idea that the purpose of the U.S. constitution is to provide business with as much profit as possible without any consideration as to the damage done to our nation's welfare and security.
"If GM goes bankrupt, the likely scenario is that they will dump their pension liabilities on the taxpayers. The major airlines will do the same."
Seems to me there are 2 classes of union bashers here:
Business owners who hate any and all unions. Even if they currently don't deal with a union. The other type is the guy who isn't in a union, and is jealous of what union employees have.
Either of those two groups is so filled with hate, they don't see the ramifications. They look forward to buying a $17k Trailblazer, and figure that it will offset the tax burden, (it won't).
See, you'll have the pension funds abandoned due to bankrupcy. You'll have people who become unemployed and won't recover from the blow, and will remain on the public dole. You'll have people who do pick themselves up, but go to another job making a fraction of what they formerly made, (therefore, pay less taxes).
To be sure, there will be some who prosper at an alternate form of income generation. They will be the minority.
In the meantime, our enemy, China, will grow richer and stronger. Don't forget for one second that China is not a friend. Their system is as incompatible with ours as the muslim system, (sharia law), is. China is communist, don't forget it.
None of that matters, our fellow FReepers are just giddy looking forward to that $17k Trailblazer. (Which won't happen, GM will maintain prices and increase profits short term with their Chinese labor).
I asked him what he saw as adequate pay for labor. I got no answer.
Unions are bad??? Yes many are. However if one reads history, this country had only a tiny middle class until unions arrived.
Andrew Mellon raged at Henry Ford because he was paying his workers $5 a day. Ford was told that laborers had no need for money, only enough pay for subsistence.
My question about GM (and Ford)...did the management and the unions
sleepwalk through the 1980s?
They must have been too busy planning on how to get rich off GM, even if
they killed it...
while the rest of us watched and learned from the Chrysler/Iacocca saga.
And believe that they have no right to strike. When countered with the concept that a man has the right to withhold his labor because forced work is slavery, they fall silent with a commensurate blank look on their face.
Clarify?
Unions have out lived their usefulness. They are committing murder in the State of California, they condone illegal immigration, and take their members money and use it for political causes, mostly liberal.
"When countered with the concept that a man has the right to withhold his labor because forced work is slavery..."
It's called "quitting"; no one is forced to work anywhere in America.
No argument with the above. My concern is the argument someone (can you say Carl Levin, Debbie Stabbenow?) is gong to make, and soon that the PGBC must be bailed out with taxpayer funds. If we take a foolish agreement made between myopic management and blind unions, which was never sustainable, and then transfer it as an obligation to a non-party (to the collectively bargained suicide pact)we will be destroying justice and our economy.
What middle class there was at the time was gone. What was left was the ruling elite and the unwashed masses, who could be shot on the slightest pretext.
I hate to see unions gone.
we're already headed there with unions. Illegal immigrations is pulling wages down, buying power is being eroded, and nothing is being done to protect the middle class.
Amen...There is another thread just posted where GM says that.
The supermarket workers that used to have great benefits and higher wages, are now being hired in at minimum wage and having to pay the union benefits with that.
What is the benefit?????
"Breaking on Bloomberg and Reuters. GM will cut 30,000 jobs in massive restructuring. More...."
thats hardly the same article.
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