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GM to cut about 5,100 salaried jobs

July 31, 2008|From the Associated Press

DETROIT — General Motors Corp. plans to cut 15% of its U.S. and Canadian salaried workforce -- or about 5,100 jobs -- by Nov. 1 as part of a plan to slash billions of dollars in costs and help the automaker ride out a slump in U.S. sales.

A GM executive declined to confirm the specific numbers Wednesday but indicated they were generally accurate. The executive asked not to be named because the company had not planned to release the numbers until later.

Word of the cuts came two days before GM planned to release its second-quarter earnings. Analysts surveyed by Thomson Financial are predicting a loss of $2.63 a share on revenue of $44.6 billion amid restructuring costs and plummeting U.S. sales of trucks and sport utility vehicles.

GM announced a $15-billion cost-cutting and cash-raising plan July 15 after its shares hit a 54-year low. The plan includes slashing thousands of salaried and hourly jobs, selling assets and eliminating healthcare for salaried retirees older than 65.

As part of that plan, GM said it would cut white-collar costs in the U.S. and Canada by more than 20%, but it declined to say how many workers would leave. GM President and Chief Operating Officer Fritz Henderson said GM hoped that most of the cuts would be made through attrition, retirements and buyout offers but that the company would consider involuntary layoffs.

GM, Ford Motor Co. and Chrysler all have announced layoffs of salaried workers in recent weeks as the U.S. market stumbles through its slowest year in more than a decade. Ford plans to cut 15% of its salaried costs by Friday, and Chrysler plans to cut 1,000 salaried jobs worldwide by Sept. 30.

GM shares fell 50 cents, or 4.2%, to $11.40.

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