GM cutting 25,000 jobs.

[TeamCasey]

http://www.msnbc.msn.com/id/8129876/

GM to slash jobs, close more plants
CEO says 25,000 manufacturing positions to be cut

The Associated Press
Updated: 9:58 a.m. ET June 7, 2005


WILMINGTON, Del. - General Motors Corp. plans to eliminate 25,000 jobs in the United States by 2008 and to close plants as part of a strategy to revive its struggling North American operations.

Speaking to shareholders at GM’s 96th annual shareholder meeting in Delaware Tuesday morning, Chairman and Chief Executive Rick Wagoner said the capacity and job cuts will generate annual savings of roughly $2.5 billion.

Wagoner revealed the cutbacks as he laid out a four-step strategy to revive GM’s North American business, the biggest and most troubling part of the world’s largest automaker.

Wagoner focused on priorities for clarifying the role of each of GM’s eight brands, intensifying efforts to reduce cost and improve quality and continuing to search for ways to reduce skyrocketing health care costs.

He noted that the company’s current $1,500 per worker health-care expense puts GM at a “significant disadvantage versus foreign-based competitors,” and said GM has conducted “intense discussions” with the unions about how to reduce health-care costs.

Billionaire investor Kirk Kerkorian’s offer to purchase 28 million GM shares at $31 apiece, boosting his stake to about 9 percent from 4 percent, expires later today.

In the cost-reduction area, Wagoner said it was vital for the company to improve efficiency at its manufacturing plants. He said that plant closings and idlings in recent months have reduced assembly capacity in North America from 6 million in 2002 to 5 million by the end of this year.

It was not immediately known which GM plants would be closed.

“Let me say up front that our absolute top priority is to get our largest business unit back to profitability as soon as possible,” Wagoner said.

Messages were left Tuesday morning with the United Auto Workers and a GM spokeswoman for manufacturing issues.

GM has already closed several facilities this year. The company shut a factory in Linden, N.J., in April and a factory in Baltimore in May, affecting around 2,000 employees. The company also closed two plants in Lansing, Mich., last month, although those 3,500 employees are expected to find work at other GM facilities in the city.

[Johnny Footstool]

I just saw a commercial yesterday that said GM is extending its employee discount to everyone in America. I thought that was a pretty nice sales technique.

I guess this is the reason they can afford to do it. :thumbdown

[macro]

Could part of the reason for this be that people are becoming more and more aware that they can get a more reliable vehicle from places like Georgetown, Kentucky?

[macro]

Originally Posted by Johnny Footstool

I just saw a commercial yesterday that said GM is extending its employee discount to everyone in America. I thought that was a pretty nice sales technique.

I guess this is the reason they can afford to do it. :thumbdown

I suspect it's a gimmick. We were shopping for a new Ford a couple of years ago and the dealer asked if we would be buying on the A-plan (or whatever Ford calls their employee discount). When we told him that we weren't Ford employees he said that he might be able to get us the discount anyway. Then again, he might have been planning to tell us we were getting the employee discount while padding that difference elsewhere in the selling price.

We decided to buy used, instead. We ended up selling our car on Auto Trader for $1200 more than any dealer would offer and bought off Auto Trader from a very nice couple in Indy for about $1800 less than dealers wanted for a similar vehicle. For those keeping score, that's $3,000 more that we have in our bank account today.

[RedsBaron]

I believe Ford calls its employee discount the "X plan"-it was offered to me a couple of years ago by a dealer who knew I could get a GM discount because our firm did legal work for GM.

[919191]

I can get a supplier discount that I hear is pretty nice because my employer owns a company that produces an adhesive GM uses, but I haven't used it.

[GIK]

Ford discounts: "X-plan" is for suppliers (and dealers will sometimes offer this to customers, although they technically aren't supposed to) and "A-plan" is for employees (which no one off the street should be getting).

[Red Leader]

This news tremendously hurts our company's business. We have more GM customers than any other manufacturer. Probably wouldn't be a bad idea for me to update the resume again. We also receive the GM Supplier discount through our company. It allows us to buy GM vehicles at 1% below dealer invoice. Of course, we have discount purchase programs through Ford, Nissan, Chrysler, VW/Audi, Isuzu, and Subaru.

[macro]

Originally Posted by GIK

Ford discounts: "X-plan" is for suppliers (and dealers will sometimes offer this to customers, although they technically aren't supposed to) and "A-plan" is for employees (which no one off the street should be getting).

It may have been the X-plan instead of the A-plan that we were offered.

[KronoRed]

Hope it's not too serious on your company RL.

[Red Leader]

Originally Posted by KronoRed

Hope it's not too serious on your company RL.

We supply computer hardware / software for over 14,000 car dealerships, around 8300 of which are GM dealers. I don't think my job will be directly effected, but the stock options we get every year probably won't be too useful this year.

[Red in Chicago]

what are the odds that with them offering the gm discount to everyone, that the interest rates they charge will be increased? the other day when i was pricing a new saab online, it had a 9% interest rate prefilled in the box and i couldn't change it. maybe this field has been modified since, but why would anyone pay 9% interest rates

[GIK]

Interest rates are on the rise. 0% isn't really common any longer and a 6-7% rate is actually "good" for a 60 month term now (and no, I don't work at a dealership).

[SunDeck]

Both Ford and GM both seem to be in pretty deep trouble. Scaling back really seems like the only way GM can survive. They just can't sell enough of what they are building. Maybe some of their new designs will help, but man, not from what I've seen. Most of the new stuff is just goofy.

[LvJ]

Wrong thread.