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.
That it is. A strike is essentially, "quitting en masse". Now they are going to be "fired en masse"
At the time it had the exact same title. It use to be that the mods preferred people to use the already established thread. If you scroll through the link, you'll find an early version of this article attached at post 61. But I'm not the one who makes the rules, I just pointed out that the subject and even the title were duplicates. It's up to the mods to decide what to do with that.
I owned a GM car once, a used GTO in 1973.
union yes but the big one is GOVERNMENT
I am a GM employee and I agree
To bad they stopped making the Prism which is basically a Toyota Corolla
I did a lot of reserach before I bought mine and I am pleased, reliable, very good gas mileage
Oh, if it were that simple...
GM needs to move all operations offshore, so they will no longer have to deal with greedy, American union members; aka the "UAW". (Only then will cars become affordable, again.)
My family has been a small Ford dealer since 1953. There was a time that the unions were much too strong. Ford and GM caved to their demands because they were selling all they could produce, and foreign competition was non existent. That all changed in the l970s. With the oil embargos, a shot was fired over the domestics bow. Protectionism allowed the domestics time to get their house in order. They failed. Not because they continued to cowtow to unions demands, but because they failed to recognize the importance of reinvesting in product that would find success in the market place.
Then came the internet. GM and Ford management perceived an opportunity to dismantle the dealer network. Do away with marketing costs, and keep all the profits for themselves. Nasser, Wolfgang Reitzel, and jet setters who had no clue about retailing cars, took over Ford and GM. Billions, I said BILLIONS, were lost in unwise investments. Greed, unmitigated greed. Small rural dealers, the ones that knew their customers, went to church with, and coached their children in baseball, were offered money to go out of business. While they represented a small percentage of total new sales to the company, they represented the stablilizing factor in customer loyalty. Bottom line is, unions have ceased to be the reason Ford and GM are losing market share. It's product. Price is not the issue. Pretty cars cost no more to produce than butt ugly ones. Ford and GM allowed their cars to become "old" in the market place because they were making $15,000 a copy on SUVs. Greed. Poor foresight. Poor management. And now, we all know, "they rest of the story".
Remind me not to buy a GM product in the next couple years built by a bunch of pizzed off workers.
I'm afraid that the '2006 recession is to a good start....
Walmart is the opposite to unions. And what do you get?
The working poor; healthcare subsidised by the local government (and all of us).
Which one is 'better' for America ?
"Which one is 'better' for America ? "
I'll give you the standard FReeper reply:
WalMart because:
#1 - I hate unions.
#2 - Working poor? Too bad, get a second, or third job, I did.
#3 - I hate unions.
#4 - It will push people to be more competitive.
#5 - I hate unions.
#6 - I can get cheap crap at WalMart, so if it's good for me, it's good for America.
And finally,
#7 - I hate unions.
/ < heavy sarcasm >
That line of thought is pretty scary, but exists in great numbers here.
"I find it odd that foreign auto companies come here, are unionized, and they make a good profit."
Who says they are unionized?? ...Toyoya, Nissan and the like finds ways to use non-union labor, to squeeze everthing from the unprotected worker.
It didn't work out so well in Canton, Mississippi, did it?
Can't keep up with all of the plants.
I see that the Canton plant makes the Titan, and the Armada, but they shipped the production of the Quest to China because they tailored that product for the Chinese market.
And your point is?
In the long run, it will be GOOD for the economy.
In a capitalistic society, the obsolete, overpaid jobs need to evaporate -- so that capitol and labor can be redeployed toward more productive work.
For these jobs to remain at GM would represent an inefficient drag on the economy and insure the eventual bankruptcy of the company -- which may yet happen.
That doesn't mean that 30,000 (or more) households aren't going to suffer. But it does mean that, down the road, 30,000 (or more) households are going to profit from more productive work.
It's a pain in the ass to be out of work, I know. But it's not the end of the world...
"In the long run, it will be GOOD for the economy.
In a capitalistic society, the obsolete, overpaid jobs need to evaporate -- so that capitol and labor can be redeployed toward more productive work. "
The jobs are overpaid, but they aren't obsolete.
I have no research, but here is my perception, (feel free to correct me if you have contradicting facts): Most of these displaced workers are undereducated. Most have families and bills. Most will not find jobs that come close to replacing their current income.
If you accept those premises, then it's not too difficult to believe that many of these people will end up on welfare, (increasing our tax burden). Another significant segement of these people will default on their financial obligations. (And businesses will pass that cost onto us as well).
So, there you have drag on the economy, without positive impact. And that's good?
I know the government can't, and shouldn't fix the management at GM. I'm just saying this is painful, and it mystifies me how people in America can see this as good?
When these jobs show up in Mexico, and China, and your company has 500k less potential clients, that will be good too?
Protectionism isn't the total answer. GM got it in the 80s and pissed it away. I don't know the answer. But I know this isn't good.
But, for whatever reason, we have 30,000 ultimately insupportable jobs at stake. At some point, they have to go away. In most economic circumstances, it's better to pay the price sooner rather than later. Bear the short-term pain, whatever it is, in favor of the long-term benefit.
It's not the first time a major employer (or industry) has suffered a major dislocation and subsequent downsizing. And, after every one of them, we've still ended up with something close to full employment at healthy wage levels (and a few new millionaires who made the most of their opportunity).
That is, so long as Jimmy Carter wasn't running the show...
This is terrible news for GM..
The Japanese seem to be surging to the lead..
But
I still think Bush needs to take a look at the hidden tarrifs(tax subsidies) and price protections the Japanese provide their automakers in Japan.
And why are our southern states giving huge tax payer subsidies to these Japanese plants?
Can you imagine Osaka giving GM a chunk of money to build a plant there?
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