GM offers early retirement to 9,000; recalls 944,000 vehicles for potential fire hazard
30 Aug 2008
Putting into action a plan it announced last month, American automaker General Motors (GM) has announced plans to offer early-retirement incentives to 28 per cent of its American salaried employees, or about 9,000 workers. Employees have 45 days to consider the proposal. (See: GM to cut thousands of jobs, save $15 billion under new restructuring plan)
The latest payroll cuts come on top of a 26-per cent reduction in GM's North American workforce to 133,000 employees, including salaried and hourly jobs, from the end of 2004 through 30 June.
Spokeswoman Deborah Silverman confirmed that Detroit-based GM is discussing the packages with eligible workers, without elaborating. GM's 2,500 salaried workers in Canada aren't part of the offer, the people said. The automaker has 32,000 salaried employees in the country.
The new salaried-worker savings are part of GM's plan to boost liquidity by $15 billion through the end of 2009. GM wants to trim the US and Canadian salaried payroll by 15 per cent, or about 5,175 jobs, people familiar with the plan have said.
The incentives in the retirement offers include an option to roll over lump-sum severance payments into employees' 401(k) plans or Individual Retirement Accounts.
Wagoner has already persuaded 53,000 union workers to accept buyouts or early retirement and announced plans to close more than a dozen North American plants. GM is shifting its emphasis toward more fuel-efficient cars and sport- utility vehicles, away from pickups and larger SUVs. It has also announced major initiatives in the electric vehicles segment. (See: GM to invest $500 million for new small car, Cruze and GM declares Volt ready for testing; additional electric cars in development)
Since announcing a record $15.5 billion quarterly loss earlier this month, the company has announced major investments in developing nations to tide over the stagnant car sales in its major markets. (See: General Motors announces massive $15.5 billion quarterly loss / General Motors setting up $200 million engine facility in Maharashtra / General Motors to invest $445 million in a new plant in Thailand)
In an unrelated development, the company has recalled 944,000 sedans, sport-utility vehicles and pickup trucks worldwide because of a potential short circuit in a system that heats windshield-wiper fluid.
The voluntary recall affects 16 models from 2006 to 2008 that have the system, including Chevrolet Silverado pickups, Chevrolet Tahoe SUVs and Cadillac DTS sedans, the Detroit-based automaker said in a letter posted on the National Highway Traffic Safety Administration's Web site. Of the vehicles, 857,735 are in the US.
