GM Cost-Savings Plan Calls For Greater Outsourcing

By Agence France-Presse General Motors Corp. is planning to ship $48 million worth of white-collar work abroad this year as part of a broad cost-savings program, officials confirmed March 23. The work includes tasks such as computer-aided planning of future factory layouts and will be sent to Canada and India, according to GM spokesman Dan Flores who confirmed the details of a leaked report. The sum represents less than 1% of the company's multi-billion dollar annual manufacturing budget, but is sharply up from last year, when GM outsourced $3.5 million of work to lower-cost locations. The move is part of a broader cost-savings program that aims to slash GM's manufacturing costs by 25% by the end of 2005, as it strives to keep up with "competitors who are driving relentlessly to reduce costs," the authors of the report said. Flores pointed out that the work, which has gone primarily to Canada in the past, is not being taken away from its U.S. employees. "It is work that was being done by suppliers, or it is new projects," he said. Forrester Research, an independent technology researcher, predicts that at least 3.3 million service jobs and $136 billion in wages will shift outside the United States to low-cost countries by 2015. Copyright Agence France-Presse, 2004