General Motors Corp is offering early-retirement incentives to about 9,000 US salaried employees, or 28 per cent of that workforce, people familiar with the plan said.
GM, the largest US automaker, said July 15 it wanted to cut 20 per cent of its salaried-worker costs in the US and Canada by Nov. 1. The employees have 45 days to consider the proposal, said the people, who asked not to be named because the details haven’t been made public.
Spokeswoman Deborah Silverman confirmed that GM is discussing the packages with eligible workers, without elaborating. GM’s 2,500 salaried workers in Canada aren’t part of the offer, the people said.
Chief Executive Rick Wagoner needs the retirements to get $1.5 billion in salaried-worker cost cuts and meet his goal of raising enough cash to weather the weakest U.S. auto market in 15 years. GM lost $15.5 billion last quarter as buyers shunned its profitable trucks because of $4-a-gallon gasoline.
Wagoner has already persuaded 53,000 union workers to accept buyouts or early retirement and announced plans to close more than a dozen North American plants. GM is shifting its emphasis toward more fuel-efficient cars and car-based sport- utility vehicles and away from pickups and larger SUVs.
The salaried-worker savings are part of GM’s plan to increase liquidity by $15 billion through the end of 2009. GM has 32,000 salaried employees in the U.S.
Chief Financial Officer Ray Young said Aug. 13 that Detroit-based GM is trying to speed up $10 billion in cost cuts over two years so more of the savings come in 2008 and early 2009 than originally planned.
Under the savings plan, GM suspended its quarterly dividend, pared spending on product development and advertising, and delayed payments to a union retiree health fund. GM has lost money the last three years, and record gasoline prices and a weakening economy may extend that streak in 2008.
The automaker is also seeking $2 billion to $3 billion in new financing secured by assets such as foreign subsidiaries and its remaining stake in lender GMAC LLC.
