General Motors Corp. plans to cut 15 percent of its U.S. and Canadian salaried work force — or around 5,100 jobs — by Nov. 1 as part of a plan to slash billions of dollars in costs and help the automaker ride out a slump in U.S. sales.
A GM official declined to confirm the specific n
umbers Wednesday but indicated they were generally accurate. The official asked not to be named because the company had not planned to release the numbers until later.
Word of the cuts came two days before GM plans to release its second-quarter earnings. Analysts surveyed by Thomson Financial are predicting a loss of $2.63 per share on revenues of $44.6 billion amid plummeting U.S. truck and sport utility vehicle sales and restructuring costs.
GM’s sales outside North America grew 10 percent in the first half of this year thanks to strong growth in Russia, Brazil and other emerging markets. But it wasn’t enough to keep Toyota Motor Corp. from taking the sales lead, or to offset losses at home. GM’s U.S. sales fell 16 percent in the first six months of this year, sharper than the industrywide decline of 10 percent.
GM also is expected to incur heavy losses because of its share in GMAC Financial Services, which said this week it was suspending leasing incentives in Canada because of a steep drop in used vehicle values. GMAC was scheduled to report earnings Thursday.
GM announced a $15 billion cost-cutting and cash-raising plan July 15 after its shares hit a 54-year low. The automaker said it planned to cut thousands of salaried and hourly jobs, sell assets, suspend its dividend and eliminate health care for salaried retirees over age 65.
As part of that plan, GM said it would cut white-collar costs in the U.S. and Canada by more than 20 percent, but it wouldn’t say how many workers would leave. GM President and Chief Operating Officer Fritz Henderson said GM hoped most of the cuts would be made through attrition, retirements and buyout offers, but that the company would consider involuntary layoffs.
GM, Ford Motor Co. and Chrysler LLC all have announced salaried layoffs in recent weeks as the U.S. market stumbles through its slowest year in more than a decade thanks to high gas prices and a weak economy. Ford plans to cut 15 percent of its salaried costs by Friday, while Chrysler LLC plans to cut 1,000 salaried jobs worldwide by Sept. 30.
The deteriorating U.S. market has forced layoffs at other automakers as well. Nissan North America Inc. also offered buyouts to around 6,000 salaried and hourly employees at its two Tennessee plants Wednesday. Toyota is keeping nearly 5,000 workers on the job despite U.S. plant shutdowns but has laid off 700 temporary workers in recent months.
GM’s cuts are part of a multiyear downsizing as the company struggles to adjust to its shrinking U.S. market share. GM had 44,000 U.S. salaried workers in 2000; that had dropped to 32,000 by the end of last year. The company’s U.S. hourly work force dropped by more than half to 57,000 last year, and an additional 19,000 hourly workers took buyouts this month.
GM shares fell 50 cents, or 4.2 percent, to close at $11.40 Wednesday.