GM to slash 10,000 jobs, Nike to cut 1400
Reports suggest that world's largest athletic shoe and cloth maker Nike is also planning to cut 1,400 jobs out of about 35,000 globally.
General Motors said that the plan to slash came in par with the restructuring plan it submitted to Congress on Dec 2, when it first asked Washington for federal assistance. Company said to media that at that time it had plans to cut its United States staff by between 22 pc and 33 pc by 2012. GM is also planning to cut the pay of its remaining US salaried staff.
US government granted GM about $9.4 billion in Federal loans in order to allow it to stay out of bankruptcy. The company expects to receive another $4 billion in federal loans after its Feb 17 submission to the Treasury Department.
GM said to sources that it is will cut the salaried staff to 63,000 from 73,000 and that 3,4000 of its 29,500 salaried staff in US will be effected by this move. However this job reduction will not include voluntary buyout offers. Sources say that the majority of salaried staff reductions are expected to happen by May 1. The remaining staff will have a reduced salary rest of the year. While executive having their base pay reduced by 10 pc, other employees will take a pay cut between 3 pc to 7 pc.
However the company does not have valid information how much money it will save after these layoffs and pay cuts. But this is only part of the cost-cutting the company needs to present to Treasury next week.
Companies like GM and Chrysler LCC which received $4 billion rescue loans in 2008, need to show the government they have agreements to shed two-thirds of their unsecured debt, and to bring their labour costs in line with those at non-union US auto plants operated by rivals such as Toyota Motors and Honda Motors.
Meanwhile the shoe maker Nike said that it plans to cut about 4 pc of its workforce to reduce costs as it is restructuring its business. Mark Parker, the President and Chief Executive of Nike said, "In light of the current economic climate, it is more essential than ever to sharpen our focus on the consumer to maximize opportunities for product innovation and brand management in the marketplace.
OneIndia News (With inputs from Agencies)