Matt
03-24-2006, 09:24 AM
http://www.detnews.com/apps/pbcs.dll/article?AID=/20060324/AUTO01/603240380
Brett Clanton and Sharon Terlep / The Detroit News
WARREN -- General Motors Corp. is expected to cut hundreds of U.S. salaried workers as early as Tuesday as part of a sweeping turnaround of its North American auto business.
The cuts are expected across a broad range of divisions, from engineering and sales and marketing, and would be the latest in a string of downsizing moves by the automaker.
GM officials will not confirm any plans for layoffs but the automaker's employees have been abuzz for more than a week with speculation about the move.
"Of course, everybody's worried because we think it's going to be somewhat random," said Zach Verkerke, a salaried employee at GM's Technical Center in Warren. "At least, that's the word so far."
In November, GM said it would trim its U.S. salaried work force of 36,000 employees by 7 percent this year. The reduction includes both GM and contract employees and will be made through attrition and involuntary separation, GM spokesman Robert Herta said. But the automaker has not laid out a timeline for the cuts.
GM is reducing its work force after posting a $10.6 billion loss last year and lagging sales of its profitable SUVs and a spike in raw material prices.
The automaker has focused its turnaround efforts on its money-losing North American division, with plans to trim $1 billion of its nearly $6 billion annual health care tab, slashing parts costs and overhauling sales and marketing.
On Wednesday, GM reached a deal with the United Auto Workers to offer more than 100,000 early retirement packages to hourly workers as part of a plan to cut 30,000 North American factory jobs by 2008.
Prior to the restructuring, GM had been slashing white-collar jobs to become more competitive with rivals and to bring staffing levels in line with its falling U.S. market share. Since 2000, the automaker has cut 32 percent of its U.S. salaried work force, or about 5.5 percent a year.
That's why news of another round of layoffs is not surprising, said David Healy, industry analyst with Burnham Securities.
"They have to accelerate all areas of cost cutting," Healy said. "They're overstaffed on the white-collar side. Whether it's blue-collar or white-collar, it's got to come. No Fortune 500 company has ever had to shrink to the extent that GM does."
In preparation for what some workers are dubbing "Black Tuesday," GM has reserved conference rooms to break the news to workers at its Milford proving grounds, Warren Technical Center and Renaissance Center headquarters, employees said.
Employees say they have been told to cancel vacations and be at their offices on Tuesday. They also say they have been asked to bring in their company cars, and are hearing that extra security will be added at affected sites.
At some sites, workers are trading dark jokes about their fate, telling colleagues to take their laptops when they leave for the night. Some are quietly looking for new jobs, while others are frozen with indecision.
"There's a lot of talk all over about this thing," John Volpe, an engineer at GM's Warren Tech Center with 20 years of experience, said while leaving the facility on Thursday. "Everybody's just trying to work hard. But it's kind of wait and see right now."
On Thursday, GM also denied a report that it would announce engineering job cuts in Europe next week, saying the division went through its restructuring last year.
The latest salaried cuts are expected to be limited to the automaker's U.S. operations, with some workers estimating the total number of job losses could surpass 1,200.
In January, GM laid off 500 salaried contract workers, many of them engineers and designers. Workers at the time said they were stunned at how swiftly the ax fell, with some getting calls at home telling them their services were no longer needed and having their health benefits abruptly discontinued. It is unclear if more contract workers will be included in the upcoming cuts.
You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.
Brett Clanton and Sharon Terlep / The Detroit News
WARREN -- General Motors Corp. is expected to cut hundreds of U.S. salaried workers as early as Tuesday as part of a sweeping turnaround of its North American auto business.
The cuts are expected across a broad range of divisions, from engineering and sales and marketing, and would be the latest in a string of downsizing moves by the automaker.
GM officials will not confirm any plans for layoffs but the automaker's employees have been abuzz for more than a week with speculation about the move.
"Of course, everybody's worried because we think it's going to be somewhat random," said Zach Verkerke, a salaried employee at GM's Technical Center in Warren. "At least, that's the word so far."
In November, GM said it would trim its U.S. salaried work force of 36,000 employees by 7 percent this year. The reduction includes both GM and contract employees and will be made through attrition and involuntary separation, GM spokesman Robert Herta said. But the automaker has not laid out a timeline for the cuts.
GM is reducing its work force after posting a $10.6 billion loss last year and lagging sales of its profitable SUVs and a spike in raw material prices.
The automaker has focused its turnaround efforts on its money-losing North American division, with plans to trim $1 billion of its nearly $6 billion annual health care tab, slashing parts costs and overhauling sales and marketing.
On Wednesday, GM reached a deal with the United Auto Workers to offer more than 100,000 early retirement packages to hourly workers as part of a plan to cut 30,000 North American factory jobs by 2008.
Prior to the restructuring, GM had been slashing white-collar jobs to become more competitive with rivals and to bring staffing levels in line with its falling U.S. market share. Since 2000, the automaker has cut 32 percent of its U.S. salaried work force, or about 5.5 percent a year.
That's why news of another round of layoffs is not surprising, said David Healy, industry analyst with Burnham Securities.
"They have to accelerate all areas of cost cutting," Healy said. "They're overstaffed on the white-collar side. Whether it's blue-collar or white-collar, it's got to come. No Fortune 500 company has ever had to shrink to the extent that GM does."
In preparation for what some workers are dubbing "Black Tuesday," GM has reserved conference rooms to break the news to workers at its Milford proving grounds, Warren Technical Center and Renaissance Center headquarters, employees said.
Employees say they have been told to cancel vacations and be at their offices on Tuesday. They also say they have been asked to bring in their company cars, and are hearing that extra security will be added at affected sites.
At some sites, workers are trading dark jokes about their fate, telling colleagues to take their laptops when they leave for the night. Some are quietly looking for new jobs, while others are frozen with indecision.
"There's a lot of talk all over about this thing," John Volpe, an engineer at GM's Warren Tech Center with 20 years of experience, said while leaving the facility on Thursday. "Everybody's just trying to work hard. But it's kind of wait and see right now."
On Thursday, GM also denied a report that it would announce engineering job cuts in Europe next week, saying the division went through its restructuring last year.
The latest salaried cuts are expected to be limited to the automaker's U.S. operations, with some workers estimating the total number of job losses could surpass 1,200.
In January, GM laid off 500 salaried contract workers, many of them engineers and designers. Workers at the time said they were stunned at how swiftly the ax fell, with some getting calls at home telling them their services were no longer needed and having their health benefits abruptly discontinued. It is unclear if more contract workers will be included in the upcoming cuts.
You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.