GM preparing cuts in contract workforce

Amy Wilson
and Robert Sherefkin

Automotive News | September 30, 2008 - 12:01 am EST

DETROIT — General Motors will begin cutting U.S. contract workers as early as next week.

The reduction in GM’s contract staffing is part of a bigger effort to reduce the automaker’s overall costs, sources familiar with the initiative told Automotive News. The number of contract workers who will be dismissed is unclear, but it could be several hundred, one source said.

GM spokesman Tom Wilkinson acknowledged that the automaker will have some contract cuts coming up, but declined to provide details.

Separately, the automaker is trimming its salaried job costs by 20 percent. To meet that goal, GM needs to eliminate about 15 percent of its U.S. salaried jobs — or about 5,000 of the 32,000 positions that exist today, a source said.

The goal also includes other cost reduction actions such as eliminating health care coverage for U.S. salaried retirees older than 65.

GM is trying to trim the salaried jobs through voluntary means. In late August, retirement offers went out to salaried employees. The sign-up deadline for that program is early October. Participants would leave the company by Nov. 1.

If GM fails to meet its cost reduction goal with the voluntary program, executives may consider involuntary job cuts, a source said.