Report: GM needs to slash 50,000 jobs to become competitive
July 7, 1998: 8:37 a.m. ET
NEW YORK (CNNfn) - Already crippled
by two United Auto Workers strikes,
General Motors Corp. reportedly may have
to cut more than 50,000 hourly jobs in the
United States to become as competitive as its
rivals.
Citing sources close to GM (GM),
Tuesday's Wall Street Journal said the
automaker will have to cut an additional 22
percent of its hourly workforce of 224,000,
even though it already has eliminated 64,000
jobs since 1992.
GM has invested billions of dollars in the
past five years on new equipment and
redesigned vehicles that require fewer labor
hours. The Journal said company officials now
feel they need to get a return on that
investment, particularly in the face of a
reinvigorated Ford Motor Co. and the
Daimler-Chrysler Corp. merger.
The Journal said GM proposes to
eliminate jobs as workers quit or retire.
GM's job-cutting plans are a major
source of conflict between UAW and GM
officials as they negotiate strike settlements
at two Flint, Mich., plants, which have now
entered their second month.
The walkouts have idled about 163,000
non-striking hourly workers and have cost
GM about $1.2 billion in the second quarter.
GM and UAW officials met for
negotiations until late Monday amid signs
that both sides are eager to end the strikes.
There has been speculation GM and the
union may agree to settle the strikes before
July 13, when the auto maker's annual two-week
holiday for model changeover ends. Neither
side, however, has indicated it is willing to
give in on key issues.
About 3,400 workers represented by
UAW Local 659 walked off their jobs June
5 at GM's metal-stamping plant in Flint in a
dispute over work rules and productivity. They
were joined six days later by 5,800 peers from
UAW Local 651 at the nearby Delphi East
diversified parts plant.
Union workers at the metal-stamping
facility, the Flint Metal Center, accuse GM of
reneging on pledges to invest $300 million in
plant upgrades and of attempting to slash jobs
or move them out of the country. |
