GM's Pre-Congress Hail Mary... Cuts & Hikes (GM)

Jobs

Published: February 10, 2009 9:04 am

General Motors Corp. (NYSE: GM) is doing almost whatever it can to get aggressive in cost cuts and streamlined operations ahead of its first post-bailout review next week. Some of the cuts were known, and some are much greater than expected.

GM (GM) now says that it expects a rise in production in the second quarter from a lower target in Q1. This might catch many bears and doom and gloomers off guard, but the company said specifically that this is not a signal of demand recovering. This is more to an “inventory balancing.”

The company is also cutting its salaried positions by 10,000 down to a level of 63,000. Some of this was telegraphed in December and more recently, but that is more than 10% of the workforce and more than many would have guessed. It looks like 3,400 of those cuts are US-based cuts and most will be made by May 1.

There also appears to be some temporary pay cuts for a majority of salaried employees. That will take place from May 1 to Year-End.

This has shares up 2.5% at $2.90 in early trading.

Jon C. Ogg
February 10, 2009

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