http://www.washingtonpost.com/wp-dyn...700478_pf.html

Apparently Wagoner plans to cut costs by downsizing approximately 25,000 jobs in an attempt to save about $2.5B annually. Also of interest his emphasis on the high health care cost of its union employees. GM's NA unit must be worse off long term than I thought. Do any of you feel that this move is a harbinger of worse things to come or rather a good strategic move to shore up a sagging business unit? IOW's, are these cuts enought to right the ship and stop the bleeding or is something more drastic in order?

 

I would think that that many jobs with a 3 year heads-up, a lot of those cuts could come through attrition (Not replacing people who retire/quit).

 

I think GM leadership is on the right track. Seeing GM stock up 2% today makes me think I'm not the only one ...though the announcement probably didn't surprise too many shareholders.

 

Also, all those jobs might not be lost. The positions may be eliminaed but workers moved to diffrent positions. Either that or they are going to move even more production offshore. That would suck. I agree with the health costs, something has to be done to bring them into alignment with the rest of the world.

 

What they are saying today is that many will be offered early retirement. Apparently there are more than 25,000 at G.M. near retirement age right now.

 

If they do start axing people, they need to start at the top.

 

http://money.cnn.com/2005/06/07/news...ex.htm?cnn=yes

Note the quick pole and the results at the bottom.

Randy

 

GM needs shrink as a company. They need to eleminate their overcapacity. That saddly includes laying people off.

 

HAHA. Thats one way for GM to cut health insurance.

Sometime the UAW will learn in a hurry. They are not competing for jobs just here in america. They are competing for Jobs across the world. Everyone in IT knows what this is like. As a resault we dont nearly make as much money was we did in the mid 90s. If the UAW cares about its members it will adjust its demands accordenly. But they dont, and they wont. 10 years from now all american cars will be made in Korea.

 

Keep buying the Hyundais, the Kias, the Toyotas....it is reaaaally helping our nation's economy!!!

 

GM is doing their cuts over a pretty long period of time. Compare that with Daimler's slaghter of Chrysler's workforce a few years ago, almost all concentrated within 2 years.

Don't cry for the workers. They get extremely good packages, and alot of benefits base on how long they were with the company, so they are hardly going to end up on the streets.

One thing that does intrest me in all this. If GM is cutting about 20% of it's North American workforce, that means that GM is adjusting for a smaller permanent market share, not a growth. In other words, they are setting up to be profitable selling at the current level or less as they are now.

 

Either that, or they have so much overlap and "legacy positions" from when their market share was 30%+ or more that they are just trimming down to more realistic levels.

I guess it all depends on if they have enough to do the work now...... or waaaaaaaay to many hands in the pot (which, at least from a decision makers standpoint, it seems like there is ALWAYS too many hands in the pot...)

 

You have to be able to walk before you can get in front of the world and run circles around the competition. I think this is a good move. Hopefully the UAW will only make the prerequisite squawks about it, and not actually put up a fight.

 

I remember reading an article in BusinessWeek that dealt w/GM's troubles and it quoted an analyst who said that GM would be much more profitable if it's market share were closer to 20% (vs. the current 24%). Here it is:

http://64.233.167.104/search?q=cache...&hl=en&start=1

I'll bet that they planning for this eventual outcome with this recent announcement.

 

Very bad. That means they are just giving up the market share to Toyota. Nothing makes me sadder then a company that does not make 1 vehicle I would buy being number one in the US.