General Motors' efforts to accelerate cuts to its salaried work force helped the company's stock rebound yesterday.
DETROIT — General Motors’ efforts to accelerate cuts to its salaried work force helped the company’s stock rebound yesterday, a day when GM was one of the few automotive stocks to increase.
GM is trying to cut up to 2,000 salaried positions in the first half of the year through early-retirement offers, said an official familiar with the situation. The move is an apparent acceleration of a plan already disclosed by the automaker.
News that GM had begun making early-retirement offers apparently bolstered investors’ confidence that the automaker is acting quickly to stay on top of the situation.
GM spokesman Robert Herta would not release specific targets for salaried job cuts, but said they would be in line with past years. The company’s salaried ranks have fallen by 1,000 or 2,000 workers in each of the past few years.
Most Read Stories
- Seattle home too toxic to enter sparked a bidding frenzy — now we know why VIEW
- Cheating hubby needs to reset attitude toward ‘affair baby’ | Dear Carolyn
- Swedish CEO resigns in wake of Seattle Times investigation
- Jay Inslee for president? Governor’s profile is on the rise
- Seattle cop accused of doing drugs with strip-club dancer, slipping names of crime victims to Q13 anchor
Herta said GM has made several difficult decisions affecting salaried workers and executives recently, including canceling merit increases and reducing the company contribution to an employee stock-purchase program from 60 cents on the dollar to 20 cents, effective April 1.
Yesterday, GM shares gained $1.07, or 3.7 percent to $29.69. Other automotive stocks, including DaimlerChrysler, Toyota and most suppliers, were down for the day.
Among the buyers: GM Chairman and Chief Executive Officer Rick Wagoner, who bought 50,000 shares for almost $1.5 million, according to a filing with the Securities and Exchange Commission.
“This is a personal investment decision for me and it demonstrates my confidence in the long-term prospects for General Motors,” Wagoner said.
GM shares had plunged almost 14 percent last Wednesday, when GM cut its outlook for the year and warned that it would likely post a substantial loss in the first quarter. The stock fell a total of 17.1 percent for the week.
Job cuts at GM are nothing new. Without resorting to a sudden and painful North American restructuring plan, like the one to take 12,000 jobs out of its money-losing European business, GM has quietly and efficiently cut 45,000 jobs from its U.S. work force alone from 2000 through 2004.
In 2001 and 2002, DaimlerChrysler’s Chrysler Group and Ford announced plans to revive their businesses that included aggressive product plans and tens of thousands of job cuts.
With 324,000 employees, GM now has fewer workers worldwide than Ford, which also owns the Hertz rental-car business, and lists more than 324,000 employees.
GM came into the year expecting to break even in the first quarter and earn $4 to $5 a share, excluding one-time items, for the year.
Wednesday, GM said it would likely lose $1.50 a share in the first quarter, excluding one-time items, and earn only $1 to $2 a share for the year.
GM cancels some 2008 cars
General Motors said yesterday it is canceling a planned worldwide line of V-8-powered rear-wheel-drive cars scheduled for North America in 2008 to concentrate resources on models that will go on sale earlier.
GM is shifting personnel and funds from North American versions of models to be built off its “Zeta” platform, spokesman Pat Morrissey said yesterday.
The resources are being shifted “to two product programs closer to launch,” Morrissey said, without providing specifics.
Chief Executive Rick Wagoner said last week that the automaker is making changes to allow new versions of its largest pickups to be introduced sooner than planned.