General Motors will cut 25,000 U.S. jobs by 2008 in an effort to bring the struggling auto giant out of its slide, chairman and chief executive Rick Wagoner revealed. Speaking to the company's annual shareholder meeting, Wagoner said the overhaul will mean the closing of assembly and component plants in an effort to reach annual savings of about $2.5 billion. Wagoner said the move is aimed at reversing the "poor performance" for the North American division of the auto group that lost $1.3 billion in the first quarter.
He said the aim of the plan is "to pick up the pace in reducing our cost, and improving our quality. With little pricing opportunity, we know we can't return to adequate levels of profitability without an extremely competitive cost structure, and without being among the very best in quality."
"Going forward, in order to achieve full capacity utilization based on conservative volume planning scenarios, we expect to close additional assembly and component plants over the next few years, and to reduce our manufacturing employment levels in the U.S. by 25,000 or more people in the 2005 to 2008 period," Wagoner said Tuesday. "We project that these capacity and employment actions will generate annual savings of approximately $2.5 billion."
The chief executive said GM would continue talks with the United Auto Workers in an effort to "reduce our health care cost disadvantage" against other global automakers." We have not reached an agreement at this time, and, to be honest, I'm not 100% certain that we will, but all parties are working hard on it, in the spirit of addressing a huge risk to our collective futures while providing greater security and good benefits for our employees," he said.
Copyright Agence France-Presse, 2005
