DETROIT — General Motors Corp, staying afloat with $13.4 billion in federal rescue loans, announced early Tuesday that it is cutting its worldwide salaried work force by 10,000, or 14 percent, this year and temporarily reducing the pay for a majority of its U.S. white-collar work force.
“These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long term viability,” the company said in a statement.
The Detroit automaker is racing to put together a long-term viability plan to present to the government Feb. 17. It has said it needs to cut its U.S. salaried and hourly work force by as much as 31,500 people through 2012.
“The announcement this week begins implementation of this aspect of the plan,” the company said.
In the U.S., GM’s salaried work force of 29,500 will be cut by about 3,400, or 12 percent, by May 1.
In a statement, GM said the job cuts “will be made using GM separation programs and policies which provide for severance payments, benefit contributions and outplacement assistance.”
The company also said executive employees in the United States will have their base pay cut by 10 percent and “many other” salaried employees will see reductions ranging from 3 percent to 7 percent. The U.S. pay reductions will also go into effect May 1 and will be in effect through the end of the year.
One 20-year GM employee said he heard the news on the radio Tuesday morning but had the day off, so he hadn’t had time to talk to co-workers yet. Anxiety, he said, was already running high before the announcement.
“Frankly, I am still trying to take it all in,” said the employee, who did not want to be identified.
“Everybody is worried and they are concerned,” he said. “It’s really been a situation where you don’t know what’s going to happen. And you are kind of waiting for whatever the next shoe is to drop.”
The employee, who works at the GM Technical Center in Warren, Mich., said his wife works for an automotive parts supplier and her job is also at risk.
“When you look at the economy in general, you know it’s not just General Motors,” he said. “If it was just General Motors, you could look someplace else for a job.”
A white-collar worker at Delphi Corp., which is GM’s largest supplier and has been struggling to emerge from bankruptcy, said Tuesday’s news out of GM further sank the mood at Delphi. He did not want to be identified for fears of repercussions in the current environment.
“Are people on suicide watch? No,” he said. “But they are trying to survive. The news is coming out faster and faster, so people are more apprehensive every day and every week.”
Workers there are also concerned, he said, that Delphi will implement pay cuts similar to the ones GM announced.
“I wouldn’t be surprised to see Delphi, Visteon and others follow suit,” he said.
The job cuts announced at GM follow a slew of job cuts announced at major employers nationwide over the past few months. About 600,000 jobs were lost in January, bringing U.S. unemployment to 7.6 percent. The number of unemployed Americans now stands at 11.6 million.
GM salaried retiree Gerald Patrick, 69, of Shelby Township, Mich., said he thinks the news about the additional GM job cuts comes at a terrible time.
“For every good-paying automotive job that’s lost, I think you have six to 10 other people affected,” he said. “It’s a big snowball, and it just keeps gathering people and jobs and getting bigger and bigger. … It’s getting bigger and getting faster.”
Patrick said somebody needs to step in to stop the job losses from getting any worse.
“We need to do what we can to protect these jobs,” he said. “Something has got to be done.”
(c) 2009, Detroit Free Press. Distributed by McClatchy-Tribune Information Services.