By Mark Huffman
ConsumerAffairs.com
April 20, 2009
General Motors, fighting what may ultimately be a losing battle to
stay out of bankruptcy, has announced it's eliminating 1,600 salaried
jobs this week in an effort to stem the flow of red ink.
The staff reduction was announced back in February, with this weeks pink slips representing about half the planned reduction in white collar jobs. In an email to employees, Troy Clarke, President of GM North America called it "a very trying time for the entire GM team, especially for the employees impacted by this action."
While GM further reduces its operations in the U.S., it is apparently considering an expansion of its manufacturing business in China. Bloomberg News quotes a top GM executive at the Shanghai auto show as saying the company is likely to build a new auto plant in China, though he didn't say when.
Nick Reilly, the company's Asia-Pacific president, said operations in China are profitable. In fact, while Americans haven't been buying GM's — or anyone's — cars lately, the Chinese can't seem to get enough of them. GM is the largest foreign automaker doing business in China, and has seen no let up in demand for its vehicles, especially after the Chinese government passed a large stimulus bill.
GM said it expects to double its sales in China over the next five years. It currently sells about a million vehicles a year.
USA Today reported last week that GM is considering ways to avoid bankruptcy, and they include shutting down their unprofitable Pontiac and GMC brands. The company is already looking for buyers for its Saab, Hummer and Saturn divisions.
The company has resisted the step of filing for bankruptcy protection, with company executives expressing the fear that consumers would avoid GM cars even more. President Obama earlier this month took the extraordinary step of announcing that the government would back new car warranties on any U.S. carmaker that declared bankruptcy.
