General Motors Corp. announced a sweeping reorganization that will eliminate of 30,000 jobs and close nine assembly, stamping, and powertrain facilities and three service and parts operations facilities.
The world’s largest automaker will reduce its assembly capacity by about 1 million units by the end of 2008, in addition to a previously implemented reduction of 1 million units between 2002 and 2005, the company stated.
The 30,000 manufacturing positions — more than a quarter of the company’s North American workforce, according to Reuters — will be eliminated between 2005 and 2008, GM added. This is the largest U.S. layoff since Kmart’s January 2003 announcement that it would eliminate 37,000 jobs, added the wire service, citing employment consulting firm Challenger, Gray & Christmas.
The company stated that it plans to achieve much of its job-reductions goal via attrition and early retirement programs.
“These actions are necessary for GM to get its costs in line with our major global competitors,” said chairman and chief executive officer Rick Wagoner, in a statement. “They are an essential part of our plan to return our North American operations to profitability as soon as possible.”
The company reportedly plans to achieve $7 billion of cost reductions by the end of 2006 — $1 billion above its previously indicated target. It also warned of a “significant restructuring charge” resulting from the capacity announcement and with any related early retirement program, and added that details of these charges will be provided when available.
GM’s stock, which last week plunged to its lowest level in 18 years, climbed more than 2 percent in pre-market trading.