GM readies new round of job cuts, restructuring

Source: Agencies  |   2008-7-15  |     ONLINE EDITION

GENERAL Motors Corp Chief Executive Rick Wagoner is slated to announce the automaker's second major restructuring package in six weeks today as the company looks to cut costs and win back investor confidence in the face of slumping sales.

The cost-cutting will include widespread job cuts for white-collar workers, including engineers assigned to now-frozen efforts to develop GM's next generation of full-size SUVs and pickup trucks, people familiar with the plans said.

Analysts also expect GM to unveil a shake-up of its product portfolio to reflect steps intended to make the line-up more competitive on fuel efficiency.

In addition, GM is expected to detail steps to conserve cash -- including possibly eliminating dividend payments -- as it prepares to raise capital to carry it into 2010 when it will begin to capture large savings from a contract reached last year with the United Auto Workers union, analysts have said.

Shares of GM bounced higher by as much as 5 percent in after-hours trade after the news. The stock has lost about 63 percent since the start of the year.

GM executives, including Wagoner, scheduled a series of briefings for employees, analysts and reporters starting at 8:30 am EDT (1230 GMT) today.

The company said those briefings would include executives responsible for GM's financial performance and its product line-up and would detail what GM is doing to "align" its operations to current market conditions.

The largest US automaker has been under intensifying pressure to cut costs because of a rapid shift away from trucks and SUVs and a decline in overall sales.

"I think it will be a pretty involved discussion," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan. "I wouldn't expect them to leave much untouched."