Re: General Motors to cut 25,000 jobs
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. ***
***“We need to get to 100 percent capacity utilization or better,” Wagoner said. A plant can get above 100 percent capacity utilization when overtime is factored in." ***http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-06-07T205020Z_01_N07424837_RTRIDST_0_BUSINESS-AUTOS-GM-DC.XML
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.