It is too soon to tell how many IT workers will be laid
off in therestructuring of General Motors, the
biggest US car and truck maker, which will emerge from bankruptcy
protection in 60 to 90 days.
The slimmer "New GM" will have less debt and lower operating
costs, thanks to a $33bn deal struck today between itself, the US
and Canadian governments and worker bodies.
The 5,500 workers at GM's UK Vauxhall operation will have to
wait for the outcome of negotiations between GM and Magna
International, a Canadian motor vehicle maker, which plans to take
over Adam Opel which with Vauxhall forms GM Europe. The German
government has given Adam Opel a €1.5m bridging loan while talks
continue.
According to reports, business minister Peter Mandelson has
received assurances that Magna intends to continue production at
Vauxhall. However, a Vauxhall spokesman said changes in workforce
levels might take several months to come to light.
GM has been losing money since 2005. Its latest quarterly report
showed a shareholder deficit of $90bn. The US government stepped in
with a $20bn loan, and the new deal gives it a 61% share of the new
company in return for its share of $33bn in new funding. The auto
maker will aim to break even on (largely US) manufacture and sale
of 10 million vehicles a year, rather than the present 15 to 17
million, it said.
GM has asked the bankruptcy courts to approve steps to protect
current and new GM customers and ensure uninterrupted operations in
the transition to the New GM.
In a statement, the firm said GM dealers will continue to
service GM vehicles and honour GM warranties. GM confirmed that all
business operations are continuing without interruption outside the
US.
GM was founded in 1908, and today manufactures cars and trucks
in 34 countries. It employs 235,000 people and sells and services
vehicles in 140 countries. In 2008, it sold 8.35 million cars and
trucks globally. It owns brands such Cadillac, Chevrolet, and
Hummer, as well as Opel, Vauxhall and Saab. On Friday it announced
plans to start making a small car in the US.