GM to Cut Work Force Again in 2005

DETROIT – General Motors Corp. (GM), the world's biggest automaker, plans to trim its U.S. work force again in 2005, part of an ongoing effort to reduce costs, chairman and chief executive Rick Wagoner (search) said Monday.

GM has trimmed its U.S. payroll every year since 2000, company figures show.

Wagoner, speaking to reporters at the North American International Auto Show (search), declined to place a number on targeted reductions, but he said the pattern likely would follow that of recent years.

Through the third quarter of 2004, GM reduced its U.S. hourly work force by about 6 percent versus the same period in 2003 — from 119,000 to 112,000, GM figures show.

For the same period, its smaller, salaried work force declined by 5 percent — from 40,000 to 38,000.

The bulk of the reductions were through attrition and retirements, GM said.

Wagoner said the attrition rate among salaried workers in the past few years has been about 2 percent, while the same rate for hourly workers has been roughly 5 percent.

"We've hired people every year," Wagoner said. "We'll continue to do that. But we don't hire on a one-for-one replacement. We may do one for two, one for three, depending on the plant and the location. The result is we've been able to significantly improve productivity without any massive dislocations of our work force."

But there will be layoffs in 2005. GM said late last year it will close an aging factory in Baltimore this year and idle another plant in Linden, N.J. Those moves will affect about 2,000 workers.

GM, whose U.S. sales fell 1.4 percent in 2004, has been shrinking its work force in recent years in the face of declining market share, weak automotive profits and mounting health care and pension costs.

Globally, GM's employment fell from 388,000 in 2000 to 323,000 at the end of September. The company announced last month it plans to offer another round of early retirement offers and buyout packages to an undetermined number of its 38,000 U.S. salaried workers early this year.

On the New York Stock Exchange (search), GM shares were off 35 cents to $38.65. Its 52-week low was $36.90 a share reached in October.