18 Nov 2009 GM may cut 10,000 jobs

[Watchman]

Nov 18, 2009
The Singapore Straits Times
GM may cut 10,000 jobs

US carmaker General Motors could cut up to 10,000 jobs as part of its European restructuring plan and hopes to finalise the details within three weeks. --PHOTO: AP


LONDON - US CARMAKER General Motors could cut up to 10,000 jobs as part of its European restructuring plan and hopes to finalise the details within three weeks, a top executive said on Tuesday.

Mr Nick Reilly, interim head of GM's European business, said the company must reduce its production across Europe by between 20 and 25 per cent as part of the 3.3 billion euros (S$6.8 billion) plan.

The company is prepared to put up some of its own cash to help fund the restructuring, but hopes to receive money from European governments too, he added. The company has about 2 billion euros of its own money to invest in the restructuring.

GM scrapped plans to sell Opel to a group led by Canadian auto parts maker Magna earlier this month, casting further doubt over its European operations and risking a confrontation with unions across Europe.

Mr Reilly, a Briton who is in charge of restructuring Opel until ex-GM Europe boss Carl-Peter Forster is replaced, said the new scheme would be less risky for GM than the Magna deal.

GM hopes to continue manufacturing at its UK plants, Ellesmere Port in north-west England and Luton, north of London, he added. Mr Reilly said there may be a chance to 'quite significantly' reduce the 800 British job cuts expected under previous plans.

Mr Reilly said he was trying to finalise details of how much money European governments may be prepared to contribute to the restructuring. The 3.3 billion euros will fund a short-term shake-up and will help meet redundancy payments and investment in the company's product portfolio, he added. -- REUTERS