General Motors latest round of layoffs will target 10,000 salaried workers. The New York Times reports:
General Motors, which must submit a satisfactory restructuring plan to the government next week to keep billions of dollars in loans, said Tuesday that it would lay off 10,000 salaried workers worldwide this year and reduce pay for those who remain by as much as 10 percent.
The announcement comes a week after G.M. extended more buyout and early retirement offers to its hourly work force and three months after it shed 5,100 salaried jobs, also through buyouts.
This time, however, the cuts are being made through layoffs rather than voluntary programs because the government loan terms prevent G.M. from using money from its overfunded pension fund to pay for buyout packages, as it has previously.
Because G.M. is using taxpayer money to avoid having to file for bankruptcy protection, it must bring payments to departing workers more in line with what is typical of companies in other industries. As part of its restructuring, G.M. has said it needs to eliminate about 31,500 hourly and salaried employees.
So much for bailing out a company to save American jobs. MarketWatch commenter Gars250 pointed out this Latin American Herald Tribune article, that says GM will be using $1 billion (where’d that come from?) to “avoid the kinds of problems (GM is facing) in its home market”:
According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to “complete the renovation of the line of products up to 2012.”
“It wouldn’t be logical to withdraw the investment from where we’re growing, and our goal is to protect investments in emerging markets,” he said in a statement published by the business daily Gazeta Mercantil.
There’s no pointing in bailing out GM if the money is going into the Brazilian economy. Let them file Chapter 11 and restructure without sending remittances to their subsidiaries abroad.