GM cutting 10,000 jobs; Nike another 1,400 (Lead)February 11th, 2009 - 11:15 am ICT by IANS
GM, which is preparing to present a long-term viability plan to the US Treasury Department next week, said Tuesday that the cutbacks are part of the restructuring plan it submitted to Congress Dec 2 when it first asked Washington for federal assistance.
The company had said at the time that it intended to cut its US staff by between 22 percent and 33 percent by 2012. It also plans to cut the pay of its remaining US salaried staff.
GM received $9.4 billion in federal loans in order to allow it to stay out of bankruptcy, and expects to receive another $4 billion in federal loans after its Feb 17 submission to the Treasury Department.
GM said worldwide salaried staff would be cut to 63,000 from 73,000, and that 3,400 of its 29,500 salaried staff in the US will be affected. This job reduction will not include voluntary buyout offers, however.
The majority of the salaried staff reductions are expected to take place by May 1. Staff who remain after May 1 will have their salaries reduced for the rest of the year, with executives having their base pay reduced by 10 percent and many other salaried employees having their pay cut between three percent and seven percent.
GM gave no estimate as to how much money these layoffs and pay cuts would save the company. But this is only part of the cost-cutting the company needs to present to Treasury next week.
GM and Chrysler LLC, which received $4 billion in federal loans last year, need to show the government they have agreements to shed two-thirds of their unsecured debt, and to bring their labour costs in line with those at non-union US auto plants operated by rivals such as Toyota Motor and Honda Motor.
Nike said Tuesday that it could cut up to four percent of its workforce to reduce costs as it restructures its business. Up to 1,400 jobs out of about 35,000 globally could be cut.
“In light of the current economic climate, it is more essential than ever to sharpen our focus on the consumer to maximize opportunities for product innovation and brand management in the marketplace,” Nike President and Chief Executive Mark Parker said in a statement.
Tags: 22 percent, auto plants, economic climate, federal assistance, federal loans, gm, honda motor, labour costs, layoffs, may 1, nike, rivals, salaried employees, salaried staff, staff reductions, term viability, toyota motor, treasury department, unsecured debt, us treasury department