US Auto & Truck

General Motors to Cut Jobs

One of the largest motor vehicle manufacturing companies in not only the country but also the world, General Motors, is planning to cut close to 47,000 jobs as they continue to struggle along with every other business in this tough economy. General Motors also announced that they will need an extra $18 billion from the United States Treasury to survive their current economic downturn. Of the 47,000 jobs they need to cut, 20,000 of those jobs will be based in the United States and the rest will be worldwide.

General Motors has already received $13.4 billion in loans from the United States Treasury and $4 billion of that was allocated on February 17, 2009. The company also submitted a restructuring plan to the Treasury on the 17th of February asking for an additional $12 billion in term loans and a $6 billion credit line. By the year 2012 General Motors is planning on shutting down 14 plants, five of them in North America. The plants have yet to be chosen or announced to the public as to which ones will be shut down. General Motors also announced that Saturn will either be phased out or spun off by 2012 and Hummer will also be phased out by March 31 of this year.

General Motors will continue to focus on Cadillac, Chevrolet, Buick and GMC Trucks while keeping Pontiac as their niche product. Another announcement that came from General Motors is that they are planning on closing down 2,000 dealerships over the next five years. At the end of 2008 General Motors had 6,246 dealerships across the country. They plan to reduce that number to 4,700 by 2012 and 4,100 by 2014. General Motors has the money in reserves for dealership buyouts but will also need private financing to help with the buyouts of the dealerships.

Along with General Motors, Chrysler also announced that they plan to cut 3,000 jobs and will need another $5 billion in relief aid to keep their company up and running in these tough economic times. The majority of the jobs being cut by the General Motors Corporation will be hourly employees. Close to 37,000 of the 47,000 jobs being cut by General Motors are jobs that work on hourly wages.

President Obama's automotive task force met in Washington on the 20 of February to discuss whether or not the government will award over $21 billion more in aid to General Motors and Chrysler. The panel is led by Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers. This panel has the power to force the automakers to declare bankruptcy or to merge into one large company. The market value for General Motors is $1 billion and it was over $27 billion just five years ago. The meeting that was held on the 20th of February was the first of only a handful of meetings for the task force that will determine how the automotive industry will rebound during these tough economic times. The future of GM and Chrysler is in the hands of this task force. We can only hope for the best.