GM to Slash Workforce, Brands in Bid for $18 Billion in Loans

General Motors said on Dec. 2 it will slash its U.S. workforce by nearly a third and shed brands as it urged lawmakers to rescue it from total collapse with $18 billion in loans.

The company said it will reduce its U.S .workforce from the current level of 96,537 people to between 65,000 and 75,000 salaried and unionized workers by 2012 and cut the number of U.S. plants to 38 in 2012 from 47 in 2008.

The automaker said it would need $12 billion to cover operating costs through the end of 2009 and also requested a revolving credit line of six billion dollars to "provide liquidity should a severe market downturn persist."

The automaker vowed to repay the loan by 2012 should overall U.S. auto sales remain at or above 12 million vehicles a year.

GM, which has warned it could run out of cash as early as January, presented a restructuring plan to Congress which it said will allow the company "to operate profitably at industry volumes between 12.5 and 13 million vehicles."

"This is substantially below the 17 million industry levels averaged over the last nine years, so it is considered to be a reasonably conservative assumption for gauging liquidity needs," GM said.

The automaker said it would accelerate its current plans to cut manufacturing and structural costs and would significantly reduce the debt on its balance sheet.

"The plan calls for shared sacrifice, including further reduction in the number of executives and total compensation paid to senior leadership," GM said, noting that chairman and CEO Rick Wagoner had agreed to reduce his salary to a symbolic one dollar a year.

"The plan also requires further changes in existing labor agreements, including job security provisions, paid time-off, and post-retirement health-care obligations," GM said.

Common stock dividends will remain suspended during the life of the loans, GM said.

It said it was exploring "alternatives" for the Saturn brand and would "focus its product development and market efforts on four core brands - Chevrolet, Cadillac, Buick, and GMC."