Bailout Watch 378: GM to Sacrifice 1000s of White Collar Jobs

Robert Farago
by Robert Farago

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.

Robert Farago
Robert Farago

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  • Npbheights Npbheights on Feb 08, 2009

    @tireguy. Let us all not forget that GM and Chrysler failed during the George W Bush administration. If he had not used his executive power to dole out billions, this would not be an issue.

  • TireGuy TireGuy on Feb 09, 2009
    npbheights : February 8th, 2009 at 10:30 pm @tireguy. Let us all not forget that GM and Chrysler failed during the George W Bush administration. If he had not used his executive power to dole out billions, this would not be an issue. Sure - although Obama certainly has discussed this with Bush before and agreed to this. What I find curious in this regard is that the real democratic organization - the House and the Senate - do not agree on such measures, and that then the Presidents overrules this, without a real public outcry.
  • SaulTigh I've said it before and I'll say it again...if you really cared about the environment you'd be encouraging everyone to drive a standard hybrid. Mature and reliable technology that uses less resources yet can still be conveniently driven cross country and use existing infrastructure.These young people have no concept of how far we've come. Cars were dirty, stinking things when I was a kid. They've never been cleaner. You hardly ever see a car smoking out the tail pipe or smell it running rich these days, even the most clapped out 20 year old POS. Hybrids are even cleaner.
  • Inside Looking Out Just put ICE there. Real thing is always better that simulation.
  • Inside Looking Out It still cannot oversimulate Telluride.
  • Jeff Doesn't appear to need much and it would be worth the asking price. Keep the straight 6 and keep it all original it is hard to find an almost 70 year old survivor like this. You are not going to race in this car it is meant for cruising and for smaller car shows. Just fix the mechanics including the brakes give it a good wax job and detailing.
  • VoGhost Hmmm. Odd that exactly zero Tesla dealers signed this lobbying letter.