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GM Shedding A Quarter Of Its Work Force

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By TOM KRISHER and DEE-ANN DURBIN

The Associated Press

Published: May 30, 2008

DETROIT - General Motors Corp. will furlough entire shifts of workers at some truck factories and may move them to nearby car plants as it restructures to adjust to a rapidly changing U.S. market brought on by $4 a gallon gasoline.

GM Chairman and Chief Executive Rick Wagoner and top managers are finalizing additional restructuring moves and likely will announce details at the automaker's annual meeting on Tuesday in Wilmington, Del., two people familiar with the plan told The Associated Press. The people requested anonymity because the plan is not finished.

One said production cuts were part of the plan. Neither would give details.

Key to the plan are the 19,000 hourly workers who signed up to leave the company by July 1 through buyout and early retirement offers. GM on Thursday announced the number of takers in the latest round of offers, which amounts to a quarter of the company's U.S. hourly work force.

The world's largest automaker expects to replace some of the workers at a new entry level wage of about $14 an hour, about half the rate of current production workers. The new wage rate for up to 16,000 nonassembly workers is part of the national contract negotiated with the United Auto Workers last year.

"This attrition program gives us an opportunity to restructure our U.S. work force through the entry-level wage and benefit structure for new hourly employees," GM North America President Troy Clarke said in a statement Thursday.

Already GM has announced that it will accelerate indefinite layoffs of one shift each at the Pontiac and Flint pickup truck assembly plants. The layoffs were to begin July 14 due to slow sales of the plants' products, the Chevrolet Silverado and GMC Sierra pickups.

Workers laid off at those plants could be moved to a car assembly factory in nearby Orion Township, where GM is negotiating with the UAW to add a third shift, said Mike Dunn, bargaining chairman of UAW Local 5960 at the Orion plant.

The Orion plant near Pontiac makes the Chevrolet Malibu and Pontiac G6 midsize cars, both of which are selling well as consumers shift from trucks and sport utility vehicles to smaller cars and crossovers.

Malibu sales were up 37 percent in the first four months of this year, and G6 sales increased 22 percent.

Dunn said the additional shift could bring 1,100 jobs to the plant, which currently has 2,780 hourly workers on two shifts.

"We haven't got anything final," he said. "We're always looking to bring work in. We're hoping before the year's out that we can accomplish this goal."

GM has relocated about 175 workers from other factories to the Orion facility in the past few weeks, Dunn said.

It was unclear Thursday if any other pickup truck or SUV factories would be targeted to lose shifts or even be closed. GM spokesman Tom Wilkinson would not comment.

Cobalt sales were up 17 percent through April, but G5 sales were down slightly.

Silverado pickup sales were down 21 percent in first four months of the year.

Lehman Bros. auto analyst Brian Johnson predicted GM will have to cut North American production by 16 percent this year because of weak sales of trucks and SUVs. GM still had a 125-day supply of pickups and a 139-day supply of SUVs at the end of April, Johnson said.

GM shares rose 23 cents to close at $17.38 Thursday.

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