IT lay-offs in GM revamp may take months to emerge


IT lay-offs in GM revamp may take months to emerge

Ian Grant

It is too soon to tell how many IT workers will be laid off in the restructuring 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.

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