GM to cut 30,000 Jobs & Close several NA Plants

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FOR RELEASE: 2005-11-21 GM North America to Undergo Major Capacity Reduction
Next Significant Step in GM's North American Turnaround Plan
9 Assembly, Stamping & Powertrain Facilities, 3 SPO Facilities
to Cease Operations - Total Reduction of 30,000 Positions Total Cost Reduction Running Rate of $7 Billion by End of 2006
DETROIT - General Motors will undergo a wide-ranging restructuring of its manufacturing operations in the United States and Canada as part of its comprehensive four-point plan to return the company to profitability and long-term growth, GM Chairman and CEO Rick Wagoner announced today.
GM's next step in its North American turnaround plan addresses its ongoing capacity utilization, a major component of reducing structural cost. A total of nine assembly, stamping and powertrain facilities and three Service and Parts Operations facilities will cease operations.
The additional actions will reduce GMNA assembly capacity by about 1 million units by the end of 2008, in addition to the previously implemented reduction of 1 million units between 2002 and 2005. Factoring in the additional capacity from GM's new Delta Township facility in Lansing, Mich., slated to begin production next year, the overall net result will be a GMNA assembly capacity of 4.2 million units. While down 30 percent since 2002, this capacity level will still provide GM plenty of flexibility to anticipate and meet market demand, but in a much more cost-effective manner. A total of 30,000 manufacturing positions will be eliminated from 2005 through 2008.
"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," Wagoner added. "But these actions are necessary for GM to get its costs in line with our major global competitors. In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible.
"We continue to be equally committed to revenue drivers - introducing compelling new cars and trucks, and executing our revitalized sales and marketing strategy - and we have received ratification of the agreement with the UAW, which will help significantly to address our health-care cost challenges," Wagoner said. "We are making steady and significant progress in implementing the plan to turn around our U.S. business."
The following six assembly plant sites will be affected in the years indicated:
Oklahoma City, Okla., will cease production in early 2006. Lansing, Mich., Craft Centre will cease production in mid-2006. Spring Hill, Tenn., Plant/Line No. 1, will cease production at the end of 2006. Doraville, Ga., will cease production at the end of its current products' lifecycle in 2008. The third shift will be removed at Oshawa Car Plant No. 1, in Ontario, Canada, in the second half of 2006. Subsequently, Oshawa Car Plant No. 2 will cease production after the current product runs out in 2008. The third shift will be removed at Moraine, Ohio, during 2006, with timing to be based on market demand. Capacity-related actions affecting stamping, Service & Parts Operations and powertrain facilities include:
The Lansing, Mich., Metal Center will cease production in 2006. The Pittsburgh, Pa., Metal Center will cease production in 2007. The Parts Distribution Center in Portland, Ore., will cease operations in 2006; the Parts Distribution Center in St. Louis, Mo., will cease warehousing activities and will be converted to a collision center facility in 2006; the Parts Processing Center in Ypsilanti, Mich., will cease operations in 2007. One additional Parts Processing Center, to be announced at a later date, will also cease operations in 2007. The competitiveness of all unitizing (packaging) operations at the Pontiac, Drayton Plains, and Ypsilanti Processing Centers in Michigan, as well as portions of the unitizing operations at the Flint, Mich., Processing Center will be evaluated in accordance with the provisions of the GM-UAW national agreement. St. Catharines Ontario Street West powertrain components facility in Ontario, Canada, will cease production in 2008. The Flint, Mich., North 3800 engine facility ("Factory 36") will cease production in 2008. Given the demographics of GM's workforce, the company plans to achieve much of the job reduction via attrition and early retirement programs. GM will work with the leadership of its unions, as any early retirement program would need to be mutually agreed upon. GM hopes to reach an agreement on such a plan as soon as possible.
"These are difficult moves that will affect thousands of dedicated GM employees and families, as well as state and local governments," Wagoner said. "We will work our hardest to mitigate that impact."
There will be a significant restructuring charge in conjunction with this capacity announcement, and also with any related early retirement program. The details of these charges will be provided when available.
Wagoner also said the company has further accelerated its efforts in structural cost reduction, raising the previously indicated $5 billion running rate cost reduction plan in North America to $6 billion by the end of 2006. In addition, GM continues to pursue its plans to target $1 billion in net material cost savings. In total, the plan is to achieve $7 billion of cost reductions on a running rate basis by the end of 2006 - $1 billion above the previously indicated target.
"Our collective goal remains the same: to return our North American operations to sustained profitability as soon as possible, thereby helping to ensure a strong General Motors for the future," Wagoner concluded.
General Motors Corp. (NYSE: GM), the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM today employs about 325,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. In 2004, GM sold nearly 9 million cars and trucks globally, up 4 percent and the second-highest total in the company's history. GM's global headquarters are at the GM Renaissance Center in Detroit. More information on GM can be found at www.gm.com.
###
Forward-looking Statements
In this press release and in related comments by General Motors management, our use of the words "expect, anticipate, design, estimate, forecast, initiative, objective, plan, goal, project, outlook, priorities, target, intend, evaluate, seek, impact" and similar expressions, including references to what the future implementation of our restructuring plan and the tentative health-care agreement with the UAW will achieve, and when, in terms of cost savings and capacity reduction, is intended to identify forward-looking statements. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, actual results may differ materially due to numerous important factors that are described in GM's most recent report on SEC Form 10-K, which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among others, the following: the ability of GM to realize production efficiencies, to achieve reductions in costs as a result of the restructuring and health-care cost reductions and to implement capital expenditures, all at the levels and times planned by management; the pace of product introductions; significant changes in the competitive environment; changes in laws, regulations and tax rates; the ability of the corporation to achieve reductions in cost and employment levels to realize production efficiencies and implement capital expenditures at levels and times planned by management; changes in relations with unions and employees/retirees and the legal interpretations of the agreements with those unions with regard to employees/retirees; shortages of and price increases for fuel; labor strikes or work stoppages; market acceptance of the corporation's new products; additional credit rating downgrades; and changes in economic conditions, commodity prices, currency exchange rates or political stability.
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( The Short Version of the above): "GM builds gasoline hogging, unreliable motorcars and the Japanese & Kia are eating our lunch. GM will continue to build crap cars and trucks that nobody wants and GM Corporate will cut jobs instead of building cars that equal the value of the Honda Civic or Kia Sephia. We will make the Shareholders happy and everyone else can go to hell. Thank You." (Clap! Clap!)
- Shareholders applause as GM advances on the NYSE and the Titanic sinks...
(FORD IS NEXT.......................just wait and see)
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How long will it be before GM and Ford must go the way
of Chrysler and internationalize.
The days of mega domestic corporations is seeing its twilight.
Labor costs alone are degrading GM & Ford's competitiveness,
and what happens when Red China gears up and starts
dumping their cheap auots in the US?
Executive salaries and golden umbrellas are taxing
the big two's resources brutally.
Merging with the likes of Toyota or Nissan appear
to be looming in the future.
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enigmatic wrote:

Perhaps you should consider GM's and Ford's current international operations before making a statement like that.

So? That doesn't apply to either Ford or GM.

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GM can't afford to buy anyone. No one would buy them with their existing union contracts. I expect someone to buy them in chap 11 (couple of years) and dump the union.
--
Jerry



"enigmatic" < snipped-for-privacy@aim.com> wrote in message
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enigmatic wrote:

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I will agree with you that executive salaries and umbrellas are out of line. When is the last time you heard of one of these executives being fired for poor performance. However labor cost are only a part of the problem. The unions have had a rough time organizing the satellite companies of Nissan, Toyota and Mercedes, primarily because these companies are located in the good old boy states that have the so called right to work law. The damn fools working for these companies have been brain washed and threatened by there management into beleiving that the union isn't in there best intrest.
We neeed to put and end to the so called free trade agreements the Senators and Representatives that push this junk should be shoot for treason. If you took the time to study what free trade is you will find that it really is an extension of Reganomics and the trickle down effect. It didn't work then and it doesn't work now. There is no such thing as free trade and never will be.
You point out trading with Red China. We as a country should be ashamed of our selves trading with them. It was the lack of a good industrial base that brought about the downfall of Russia as a communist country. It is time to wake up to the fact that we are at war with the third world countries and they are winning because we are allowing our inducstrial base to be moved offshore. Another thing I would like to point out is that at the present time there in excess of 35,000 paid lobbyists in Washington influence peddling to our legislators. This has to stop and our officials have to get back to representing the American People and this country. It should be illegal for any foreign government or corporation to lobby in Washington. It is illegal in most foreign countries.
The bottom line is that the autoworkers aren't over paid. Most of the gains that they have made where thru cost of living raises. If the rest of the country had received these raises as they should have everyone would have been better off. Another thing this country needs is a National Health Care program so that are companies can compete, even good old Red China has a National Health Care Progra.
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Ave. pay is 65 per hour for unskilled labor - overtime is much greater. All health care and drugs paid for at pretty much 100% (includes retirees). Guaranteed full pay and benefits for 2 years in the case of layoffs. I know some PHD's who would like contracts like this. IMO GM will not survive, because the unions are spoiled and will not give in that much.
--
Jerry


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Where does this $65 per hour figure come from? When I retired in Feb, I was getting $31.00 per hour. If the 65 figure is to be believed, my benefits cost GM $34.00 per hour, or $68,000 per year based on a 2000 hour work year!

I pay 50% of all office visits. One of the three prescriptions I take is not covered by my GM health insurance. I pay $130.00 per month for that out of my pocket.

Whose fault is it that the PhD's chose a low paying field?

How much should we give? For 40 years, GM told me I would receive these benefits. For 40 years I was promised a pension when I retired. That pension is $1800.00 per month, BTW.
One of the plants closing is the Flint, MI, Powertrain North plant where the 3800 V6 is built. They have 633 hourly employees and 102 salary, per today's Detroit papers. That's 6.2 hourly for every salary employee. In the plant I worked in, in the same complex, one department has 1 supervisor for every 4 employees. The plant I used to work in recently eliminated the 2nd shift. All the 2nd shife supervisors were moved to the day shift. There were NO salary cuts. I know that topheavy management is not part of the problem, though. It's always the greedy workers on the plant floor.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Retired Shop Rat: 14,647 days in a GM plant. Now I can do what I enjoy: Large Format Photography
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PHILIPHD
I don't dispute what You say, but how much more
pressure can Ford and GM take? Korean vehicle
prices are even hurting the Japanese import sales.
I protested NAFTA- a certain disaster- when it first
was implemented and I was right, but let's face the
facts. Most likely the Chinese industries are being
bankrolled by American investors.
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More than that, GM, Ford, Chrysler, VW, etc. are building up Chinese car manufacturing capability to ship cars to the USA. GM is already importing cars from Korea.
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Toyota is building a plant in China to make cars and trucks for the US market, as well according to Automotive News
mike
wrote:

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Pay for work done I agree, but high pay for sitting home is killing a shrinking GM.
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Technically, the plants are not closing - they are just shutting down. They cannot close them without union approval. Also, the workers get paid even though they are not working. Great job - right?
--
Jerry



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Not in any union I've ever been a member of. Those guys will be on furlough, with recall rights as per their seniority. Drawing unemployment until they find another job or get recalled to GM. But certainly not drawing a paycheck from GM. I've never been a UAW member but I can't imagine what you're saying here is true.
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IT'S TRUE!!! They get their regular pay. GM got suckered into these ridiculous contracts when times were good.
--
Jerry



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The full salary and benefits end in Oct 2007. At that time these folks can go on unemployment.
--
Jerry



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wrote:

Actually, Jerry's right. The current UAW contract forbids GM from actually cutting anyone from its payroll until 2007. Right now, from a pure cost perspective, the only way GM will be saving money is through not having to pay non-related labor costs associated with operating the affected plants.
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snipped-for-privacy@email.com wrote:

Plus avoiding the storage costs on unsold production.
I'm in the market for a replacement for my '95 Chrysler. After looking at a few GM models- no way. Not even those Korean build models. Current Chrysler and Ford cars don't meet my requirements either.
I saw a cars that do suit me at Toyota and Honda. How come they produce the cars I could be happy with? I'm talking function here; not quality.
I expect many of the laid off GM workers could get employment down the road at Toyota or Honda.
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wrote:

I honestly can not see how people can find a Honda or Toyota an attractive vehicle. I have never seen one I would purchase. Same for Kia. Sure, GM has some ugly-as-sin looking hulks, but they also produce what I think are the most beautiful cars on the planet. Well, the ones normal people can afford anyhow ;-)
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attractive
has
the
afford
I used to think the way you do at one time 80 K.
Then I bit the bullet and purchased a pre-owned 3 year old Honda Civic sedan with 35K on the clock for my daughter to use at college. That was 11 Years ago. That Honda is still going strong and apart from a brake job, a new muffler and routine oil changes and a coolant flushing, the car has NEVER been in the shop even once for a major repair. It's now got 160K on the clock and still starts and runs like a Singer sewing machine. The body has aged and it "ain't pretty" like it used to be but it still runs 4 my daughter and she loves it.
I wish that I could say the same for my wife's Ford Tarus sedan (..scrapped and replaced with a Honda Accord last year) and my GM truck which has had 2 major engine service procedures before it reached 80K miles.
I would like to "buy American" via a Ford or a GM product, but the likelyhood is very low at this time as I have found that Honda builds a far more reliable car that Detroit. The only exception to the rule is Subaru, my neighbor has an Outback Wagon that has been plagued by oil leaks and cooling system problems from day one. My mechanic echoed the same, saying that Subaru's engines all have known problems with blown gaskets and oil leaks and not to touch a Subaru product of any kind with a 10' pole. My next truck just may be that Honda pickup their now making. It may be more plastic than metal but if it's anything like my daughter's ultra-reliable Civic it looks like it will be a keeper.
It's a damm shame Ford and GM can't design and build cars and trucks which are just as reliable in the long term as Honda. Subaru is another story however and their crap might as well have a GM logo affixed to it.
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