Video: GM To Cut Salaried Workers, Production
Posted Jul 15, 2008 @ 9:41 am
This morning, CEO Rick Wagoner announced a plan for GM to conserve and raise $15 billion over the next year to help the company weather the weak US economy and slumping vehicle sales. The plan includes cutting salaried workers, reducing executive salaries, reducing salaried worker health care and slashing truck production. Wagoner also said that the company hasn't ruled off using some of their global assets to raise cash.
Keep reading for more details and to see a video of Wagoner's announcement...
Top executives at the company will see their cash compensation drop off between 75-84%. This could mean that stock options will increase, which should provide a good incentive for executives. If they fail to turn GM around, their stock options become worthless.
The rest of the salaried employees won't see pay cuts, but their pay will be frozen until the end of 2009. The total number of salaried employees will also be reduced through attrition, early retirements and mutual separation programs.
Retirees older than 65 will no longer receive health care after Jan 1, 2009. Instead, they will receive a larger pension.
Truck production will be cut by an additional 150,000 units (bringing the total production cuts to 300,000).
GM will also reduce engineering spending to 2006 and 2007 levels, which is lower than the company had originally planned.
The company will also defer $1.7 billion in payments for the UAW retiree health care fund.
GM hopes that the combination of these sweeping changes and the sale of some undisclosed assets will save the company about $15 billion.
Category: Sales and Financial
Comments (4)
This morning, CEO Rick Wagoner announced a plan for GM to conserve and raise $15 billion over the next year to help the company weather the weak US economy and slumping vehicle sales. The plan includes cutting salaried workers, reducing executive salaries, reducing salaried worker health care and slashing truck production. Wagoner also said that the company hasn't ruled off using some of their global assets to raise cash.
Keep reading for more details and to see a video of Wagoner's announcement...
Top executives at the company will see their cash compensation drop off between 75-84%. This could mean that stock options will increase, which should provide a good incentive for executives. If they fail to turn GM around, their stock options become worthless.
The rest of the salaried employees won't see pay cuts, but their pay will be frozen until the end of 2009. The total number of salaried employees will also be reduced through attrition, early retirements and mutual separation programs.
Retirees older than 65 will no longer receive health care after Jan 1, 2009. Instead, they will receive a larger pension.
Truck production will be cut by an additional 150,000 units (bringing the total production cuts to 300,000).
GM will also reduce engineering spending to 2006 and 2007 levels, which is lower than the company had originally planned.
The company will also defer $1.7 billion in payments for the UAW retiree health care fund.
GM hopes that the combination of these sweeping changes and the sale of some undisclosed assets will save the company about $15 billion.
Category: Sales and Financial
Comments (4)
Comments
There are 4 comments
| Posted By rick @ Jul 15, 2008 |
| hopefully this works! |
| Posted By det9 @ Jul 15, 2008 |
| damn, guess i'm not gettin a pay raise this year! |
| Posted By dee @ Jul 15, 2008 |
| Are they replacing the retirees? |
| Posted By alex @ Jul 15, 2008 |
| ha, yeah they should replace the retirees with non-union retirees! |
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