GM Eliminates 500 White Collar Jobs

General Motors said March 28 it was eliminating the jobs of 500 salaried employees, including engineers and technicians, as the automaker continued its downsizing in the wake of a $10.6 billion loss in 2005.

The news of salaried layoffs at engineering centers such as GM's Proving Ground in Milford, Michigan and the company's technical center in Warren, Michigan, come less than a week after the struggling carmaker offered buyouts to 113,000 blue collar workers.

The cutbacks are in line with the turnaround plan laid out in November which included plans to cut the salaried workforce of 36,000 by 7% in 2006, GM spokesman Robert Herta said.

The layoffs announced March 28 represent about 20% of the cuts planned this year. In January, GM eliminated the jobs of 500 contract employees.

Earlier this week, GM sales and marketing executives acknowledged that the company's market share will drop by one full point during the first quarter. Part of the decline was due to a specific strategic decision to reduce cut-rate sales to rental fleets. The decision to scale back the rental-car business and incentives should boost the average transaction price of the cars it does sell, said Mark LaNeve, GM vice president for sales, service and marketing.

GM also planned to reduce its advertising budget this year as part of its effort to reduce costs, he said. Last year, GM's advertising budget exceeded $2 billion dollars, according to trade publications. LaNeve said GM planned to save "hundreds of millions of dollars" in cutting back on promoting the big, nationwide incentive programs that had characterized the company's marketing effort in recent years.

Copyright Agence France-Presse, 2006

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