Bailout Watch 378: GM to Sacrifice 1000s of White Collar Jobs
It’s T minus 11 days before Congress does the thumbs-up thumbs-down thing on the artist formerly known as the world’s largest automaker. GM is up shit creek without a paddle. The United Auto Workers aren’t going to agree to parity with the transplant assembly workers, as required. The bondholders aren’t going to exchange debt for equity, as required. The company doesn’t have a clue what to do about its brands or products, as required. There is no way whatsoever for GM to prove to your elected officials that it has a hope in hell of repaying the $13.4b loans already made—never mind the $100b or so needed to keep the ailing American automaker in business for another year. So GM CEO Rick Wagoner is doing the only thing he knows how to do, that he can do: cutting expenses. This time, it’s white collar workers for one simple reason: that’s all that’s left. Bloomberg tells of the $14m per year CEO’s decision to throw his remaining management to the wolves . . .
The company will include the plans in a Feb. 17 progress report to the U.S. government, said the people, who asked not to be named because the plan isn’t public. The total may match the more than 5,000 salaried positions eliminated last year, the people said. GM started offering buyouts to 62,000 union workers this week and is in talks with the United Auto Workers about trimming benefits.
“They need to be very aggressive,” said Dennis Virag, president of the Automotive Consulting Group Inc. in Ann Arbor, Michigan. “They need to prove they can be viable. To do that, they need significant cutbacks of both salaried and union workers.”
Horseshit. The key to success: take in more money than you spend. While GM’s CEO has been a ruthless cost-cutter, Wagoner and his mob have done sweet FA to increase GM’s ability to earn what’s commonly known as profit. It’s time to cut bait and fish.
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