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GM to fire professional workers

Bloomberg
Published: February 07, 2009, 23:00

Southfield, Michigan: General Motors Corp, trying to cut enough costs by a March 31 deadline to keep $13.4 billion in US aid, is readying a plan to fire thousands of salaried employees, people familiar with the plans said.

The company will include the plans in a February 17 progress report to the US government, said the people, who asked not to be named because the plan isn't public.

The total may match the more than 5,000 salaried positions eliminated last year, the people said. GM started offering buyouts to 62,000 union workers last week and is in talks with the United Auto Workers about trimming benefits.

"They need to be very aggressive," said Dennis Virag, president of the Automotive Consulting Group Inc in Ann Arbor, Michigan.


GM is facing increased pressure to slash expenses after the Detroit automaker's US auto sales fell 49 per cent in January. GM and Chrysler LLC have a February 17 deadline for a progress report on their efforts to restructure their businesses, return to profit and repay $17.4 billion in US loans by the end of 2011. GM spokeswoman Renee Rashid-Merem said the company had no comment on the contents of the progress report. UAW spokesman Roger Kerson had no comment.

Last month, the company forecast US industrywide sales this year of 10.5 million cars and light trucks, compared with 13.2 million last year and an average of 16 million this decade.

GM said it expects global sales will fall to 57.5 million autos from 67.1 million last year, or about 10 per cent worse than a December forecast for global sales.

GM managers are looking for positions to eliminate in all departments worldwide as global demand shrinks, said the people. The automaker may announce some actions prior to the February 17 report, the people said.