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Go Back   Hummer Forums by Elcova > General Hummer Talk > In the News

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  #1  
Old 11-21-2005, 03:34 PM
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GM to Cut 30,000 Jobs by 2008,
Expects $7 Billion in Savings

A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
November 21, 2005 12:17 p.m.

DETROIT -- General Motors Corp. announced Monday a restructuring of its manufacturing operations in the U.S. and Canada as well as major job reductions as part of a comprehensive plan to return the company to profitability and long-term growth.

In a news release, GM Chairman and Chief Executive Rick Wagoner said the auto maker will eliminate 30,000 manufacturing positions through 2008. GM will also shut down nine assembly, stamping and powertrain facilities and three service and parts operations. The plan is to achieve $7 billion in annual cost reductions by the end of 2006 -- $1 billion above its previously indicated target.

The moves would further GM's effort in North America to streamline its capacity utilization, a major component of reducing structural cost. The announcement represents 5,000 more job cuts than the 25,000 that the auto maker had previously indicated. GM's world-wide work force is about 325,000.

The additional actions will reduce GM's North American assembly capacity by about one million units by the end of 2008, in addition to the previously implemented reduction of one million units between 2002 and 2005. GM sold nine million vehicles in 2004 but has seen its leading U.S. market share steadily erode.

UAW Calls Plan 'Unfair'

The United Auto Workers said in response to the announcement that negotiations with the auto maker would be more difficult.

"Today's action by General Motors is not only extremely disappointing, unfair and unfortunate, it is devastating to many thousands of workers, their families and their communities. While GM's continuing decline in market share is not the fault of workers or our communities, it is these groups that will suffer because of the actions announced today," the union said in a statement.

The UAW said it will do "everything in its power" to enforce job security and protect the interests of the workers impacted by GM's action.

GM has been crippled by high labor, pension, health-care and materials costs as well as by sagging demand for sport-utility vehicles, its longtime cash cows, and by bloated plant capacity. Its market share has been eroded by competition from Asian auto makers led by Toyota Motor Corp. GM lost nearly $4 billion in the first nine months of this year, sparking speculation that the company might have to file for bankruptcy-court protection.

"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," Mr. Wagoner said. "But these actions are necessary for GM to get its costs in line with our major global competitors. In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible."

He added: "We continue to be equally committed to revenue drivers -- introducing compelling new cars and trucks, and executing our revitalized sales and marketing strategy -- and we have received ratification of the agreement with the UAW, which will help significantly to address our health-care cost challenges. We are making steady and significant progress in implementing the plan to turn around our U.S. business."

GM's shares rose less than 1% after the announcement this morning on the New York Stock Exchange.

GM said the assembly plants that will close are in Oklahoma City, Lansing, Mich., Spring Hill, Tenn., Doraville, Ga., and Ontario, Canada. An engine facility in Flint, Mich., will close, along with a separate powertrain facility in Ontario and metal centers in Lansing and Pittsburgh.

Mr. Wagoner said GM also will close three service and parts operations facilities. They are in Ypsilanti, Mich., and Portland, Ore., and one unidentified site. A shift also will be removed at a plant in Moraine, Ohio.

GM plans to achieve much of the job reduction via attrition and early retirement programs. The company said there will be a significant restructuring charge relating to the capacity announcement and the early-retirement program.

Material Costs Also Targeted

Mr. Wagoner said the company has further accelerated its efforts in structural cost reduction, raising the previously indicated $5 billion running rate cost-reduction plan in North America to $6 billion by the end of 2006. In addition, GM continues to pursue its plans to target $1 billion in net material cost savings. In total, the plan is to achieve $7 billion of cost reductions on a running rate basis by the end of 2006.

"Our collective goal remains the same: to return our North American operations to sustained profitability as soon as possible, thereby helping to ensure a strong General Motors for the future," Mr. Wagoner said.

Mr. Wagoner said last month the auto maker would announce plant closures by year end to get its capacity in line with U.S. demand. GM plants currently run at 85% of their capacity, lower than North American plants run by its Asian rivals. The plant closings aren't expected to be final until GM's current contract with the UAW expires in 2007.

On top of its other woes, the auto maker could be facing a strike at Delphi Corp., its biggest parts supplier, which filed for bankruptcy protection last month. GM spun off Delphi in 1999 and could be liable for billions in pension costs for Delphi retirees. GM also is under investigation by the U.S. Securities and Exchange Commission for accounting errors.

Last week, after the auto maker's shares fell to their lowest level in 18 years, Mr. Wagoner sent an e-mail to employees saying the company has a turnaround strategy in place and has no plans to file for bankruptcy.
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  #2  
Old 11-21-2005, 03:34 PM
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GM to Cut 30,000 Jobs by 2008,
Expects $7 Billion in Savings

A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
November 21, 2005 12:17 p.m.

DETROIT -- General Motors Corp. announced Monday a restructuring of its manufacturing operations in the U.S. and Canada as well as major job reductions as part of a comprehensive plan to return the company to profitability and long-term growth.

In a news release, GM Chairman and Chief Executive Rick Wagoner said the auto maker will eliminate 30,000 manufacturing positions through 2008. GM will also shut down nine assembly, stamping and powertrain facilities and three service and parts operations. The plan is to achieve $7 billion in annual cost reductions by the end of 2006 -- $1 billion above its previously indicated target.

The moves would further GM's effort in North America to streamline its capacity utilization, a major component of reducing structural cost. The announcement represents 5,000 more job cuts than the 25,000 that the auto maker had previously indicated. GM's world-wide work force is about 325,000.

The additional actions will reduce GM's North American assembly capacity by about one million units by the end of 2008, in addition to the previously implemented reduction of one million units between 2002 and 2005. GM sold nine million vehicles in 2004 but has seen its leading U.S. market share steadily erode.

UAW Calls Plan 'Unfair'

The United Auto Workers said in response to the announcement that negotiations with the auto maker would be more difficult.

"Today's action by General Motors is not only extremely disappointing, unfair and unfortunate, it is devastating to many thousands of workers, their families and their communities. While GM's continuing decline in market share is not the fault of workers or our communities, it is these groups that will suffer because of the actions announced today," the union said in a statement.

The UAW said it will do "everything in its power" to enforce job security and protect the interests of the workers impacted by GM's action.

GM has been crippled by high labor, pension, health-care and materials costs as well as by sagging demand for sport-utility vehicles, its longtime cash cows, and by bloated plant capacity. Its market share has been eroded by competition from Asian auto makers led by Toyota Motor Corp. GM lost nearly $4 billion in the first nine months of this year, sparking speculation that the company might have to file for bankruptcy-court protection.

"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," Mr. Wagoner said. "But these actions are necessary for GM to get its costs in line with our major global competitors. In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible."

He added: "We continue to be equally committed to revenue drivers -- introducing compelling new cars and trucks, and executing our revitalized sales and marketing strategy -- and we have received ratification of the agreement with the UAW, which will help significantly to address our health-care cost challenges. We are making steady and significant progress in implementing the plan to turn around our U.S. business."

GM's shares rose less than 1% after the announcement this morning on the New York Stock Exchange.

GM said the assembly plants that will close are in Oklahoma City, Lansing, Mich., Spring Hill, Tenn., Doraville, Ga., and Ontario, Canada. An engine facility in Flint, Mich., will close, along with a separate powertrain facility in Ontario and metal centers in Lansing and Pittsburgh.

Mr. Wagoner said GM also will close three service and parts operations facilities. They are in Ypsilanti, Mich., and Portland, Ore., and one unidentified site. A shift also will be removed at a plant in Moraine, Ohio.

GM plans to achieve much of the job reduction via attrition and early retirement programs. The company said there will be a significant restructuring charge relating to the capacity announcement and the early-retirement program.

Material Costs Also Targeted

Mr. Wagoner said the company has further accelerated its efforts in structural cost reduction, raising the previously indicated $5 billion running rate cost-reduction plan in North America to $6 billion by the end of 2006. In addition, GM continues to pursue its plans to target $1 billion in net material cost savings. In total, the plan is to achieve $7 billion of cost reductions on a running rate basis by the end of 2006.

"Our collective goal remains the same: to return our North American operations to sustained profitability as soon as possible, thereby helping to ensure a strong General Motors for the future," Mr. Wagoner said.

Mr. Wagoner said last month the auto maker would announce plant closures by year end to get its capacity in line with U.S. demand. GM plants currently run at 85% of their capacity, lower than North American plants run by its Asian rivals. The plant closings aren't expected to be final until GM's current contract with the UAW expires in 2007.

On top of its other woes, the auto maker could be facing a strike at Delphi Corp., its biggest parts supplier, which filed for bankruptcy protection last month. GM spun off Delphi in 1999 and could be liable for billions in pension costs for Delphi retirees. GM also is under investigation by the U.S. Securities and Exchange Commission for accounting errors.

Last week, after the auto maker's shares fell to their lowest level in 18 years, Mr. Wagoner sent an e-mail to employees saying the company has a turnaround strategy in place and has no plans to file for bankruptcy.
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  #3  
Old 11-21-2005, 03:38 PM
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A Closer Look at GM's Plans
November 21, 2005 11:28 a.m.

General Motors' wide-ranging restructuring of its manufacturing operations in the U.S. and Canada is part of its plan to return the company to profitability. The world's largest auto maker says it wants to eliminate 30,000 manufacturing positions through 2008. GM will also shut down nine assembly, stamping and powertrain facilities and three service and parts operations. GM employs about 325,000 people world-wide.

Six assembly plant sites:

• Oklahoma City, Okla., will cease production in early 2006.

• Lansing, Mich., Craft Centre will cease production in mid-2006.

• Spring Hill, Tenn., Plant/Line No. 1, will cease production at the end of 2006.

• Doraville, Ga., will cease production at the end of its current products' lifecycle in 2008.

• The third shift will be removed at Oshawa Car Plant No. 1, in Ontario, Canada, in the second half of 2006. Subsequently, Oshawa Car Plant No. 2 will cease production after the current product runs out in 2008.

• The third shift will be removed at Moraine, Ohio, during 2006, with timing to be based on market demand.


Capacity-related actions affecting stamping, Service & Parts Operations and powertrain facilities include:

• The Lansing, Mich., Metal Center will cease production in 2006.

• The Pittsburgh, Pa., Metal Center will cease production in 2007.

• The Parts Distribution Center in Portland, Ore., will cease operations in 2006.

• The Parts Distribution Center in St. Louis, Mo., will cease warehousing activities and will be converted to a collision center facility in 2006.

• The Parts Processing Center in Ypsilanti, Mich., will cease operations in 2007. One additional Parts Processing Center, to be announced at a later date, will also cease operations in 2007.

• The competitiveness of all unitizing (packaging) operations at the Pontiac, Drayton Plains, and Ypsilanti Processing Centers in Michigan, as well as portions of the unitizing operations at the Flint, Mich., Processing Center will be evaluated in accordance with the provisions of the GM-UAW national agreement.

• St. Catharines Ontario Street West powertrain components facility in Ontario, Canada, will cease production in 2008.

• The Flint, Mich., North 3800 engine facility ("Factory 36") will cease production in 2008.
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Old 11-21-2005, 03:40 PM
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GM Press Release
November 21, 2005 10:27 a.m.

GM North America's Four Point Turnaround Plan

DETROIT, Nov. 21 /PRNewswire/ -- Following is a brief update and summary of the other key elements of the GMNA turnaround plan beyond structural cost reductions.

Health-care Cost Reductions

On Oct. 17, GM announced a far-reaching agreement with the UAW that will introduce a series of changes to the hourly retiree health-care plan. As part of the agreement, pending court approval, active hourly employees will contribute financially to this health-care plan. As a result, GM will continue to provide competitive health-care benefits to its hourly employees and retirees, but at a significantly lower cost. The agreement is projected to reduce GM's retiree health-care liabilities by approximately 25% of the hourly liability, or about $15 billion, and cut the company's health-care expense by about $3 billion on an annualized, pre-tax basis. Annualized cash savings will be approximately $1 billion a year.

Product Renaissance

GM North America will continue with its aggressive product assault on all vehicle segments. To target key growth segments with the right products, GM earlier this year increased capital expenditures, with the vast majority of that increase going toward future car and truck programs. This increased investment will allow GM to average 15 all-new entries a year in the North American market for the foreseeable future.

We remain committed to a diversified portfolio of hybrid cars and trucks, including hybrid versions of the Saturn VUE, Chevrolet Malibu, and the next generation of GM full-size pickups and SUVs. We also will continue to lead in the implementation of other fuel savings technologies, such as Displacement on Demand and six-speed transmissions. GMNA also will expand its offerings of ethanol-capable vehicles (E85 fuel).

To help drive additional sales in the future, the product plan includes a heavy emphasis on high-growth segments, such as "crossovers," compact and luxury SUVs, large pickups and entry luxury cars.

Starting in January, GM will begin rolling out more than a dozen all-new versions of its full-size SUVs for Chevrolet, GMC and Cadillac, to be followed in late 2007 with the availability of GM's advanced two-mode hybrid powertrain. In the same year, GM will begin rolling out an entire new lineup of full-size pickups, another segment in which GM is the industry leader.

GM's strategy also builds on its recent move to create a single, global product development organization, which will permit the company to better leverage its considerable design and engineering resources around the globe. By taking full advantage of its unique global footprint and that of its global partners, GM will more effectively be able to address emerging trends and markets, and take advantage of its creative talent base around the world.

Sales & Marketing

GM also laid out a focused strategy designed to improve significantly the company's performance in the retail marketplace.

This strategy includes strengthening GM's automotive brands, marketing that emphasizes the inherent value of GM cars and trucks, completing GM's distribution channel strategy, and aggressively targeting markets where GM has underperformed against the competition.

GM's newest products continue to attract new customers. Chevrolet introduced two new cars this year that rank among the top 10 best-selling cars in the industry: the Impala and Cobalt. The Buick LaCrosse is conquesting sales at impressive rates with 24% of its customers citing Toyota, Honda and Nissan as second choice and 50% claiming a non-GM brand as a second choice. The Pontiac G6 retail sales in October were up 100% versus October 2004. And the HUMMER brand has posted the largest% increase (up 86% in 2005) of any GM division, with the H3's successful launch.

GM brands have focused more on consumer benefits in advertisements this year, moving away from the deal-only ads that focused largely on monthly payments. For instance, Chevrolet ads spend more time addressing segment- leading fuel economy, safety and product quality.

The dealer-channel strategy is progressing well. There are over 200 Chevrolet dealers implementing the brand's image program. At HUMMER, over 70% of the dealerships will be consistent with that brand's image vision by the end of 2005. Cadillac has nearly 200 dealerships completed or in progress, representing 60% of the brand's sales, and nearly all Saab dealerships are consistent with that brand's image vision. By the end of 2005, 60% of Pontiac, Buick and GMC sales will be from combined dealerships.

As part of the move toward emphasizing the value of GM cars and trucks, GMNA will continue to adjust suggested retail prices to more closely match actual transaction prices, manage inventories and resale values more closely, and focus strongly on improving retail sales.

In addition, GM will specifically address certain regional markets in the United States in which GM's potential has not been fully realized. This more targeted approach to incentives, advertising, and promotion is expected to result in significant volume and share gains in these markets.
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