“America’s economy is on the right track” ~Bush 6/4/05
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**NEW YORK (CNN/Money) - General Motors Corp. is cutting 25,000 jobs and closing an unspecified number of plants over the next 3-1/2 years, CEO Rick Wagoner told shareholders Tuesday, as the world’s largest automaker struggles to stem huge losses. **
Wagoner, who is also chairman of GM, did not offer more details other than to say the troubled automaker needs to cut capacity by the end of 2008.
The 25,000 jobs represent about 17 percent of GM’s U.S. work force, which includes 111,000 unionized employees and another 39,000 salaried staff.
Speaking at GM’s annual shareholders meeting in Wilmington, Del., Wagoner said the company’s goal is to trim capacity so that plants are running full out. He noted that the cuts announced Tuesday and other moves this year will reduce its production capacity to 5 million cars and trucks by year-end, down from 6 million in 2002
Cutting jobs and closing plants ain't gonna cut it for GM. They need to design better cars, that actually sell. They are only taking care of one part of the equation.
I don’t think this is equivalent to the sky falling. Analysts noted that the 25,000 jobs to be cut between now and the end of 2008 is about equal to “the normal attrition rate” experienced by GM over the last couple of years.
A Reuters release earlier today pinpointed much of the main problem.
***"A benchmark annual report on North American manufacturing operations released last week ranked GM last among leading automakers in assembly plant capacity utilization. ******The report, prepared by Harbour Consulting of Troy, Michigan, said GM used 85 percent of its North American plant capacity in 2004, compared with 107 percent at Toyota Motor Corp. ***
So what you’ve got here is a union trying to protect 111,000 union jobs when the company has no need for 111,000 assembly workers. As a result, GM loses $1.1 billion in the first quarter.
