With unemployment rising, fewer people can afford to spend money on such things as new cars and other consumer goods. Because of this automakers are no having to struggle to stay afloat, which has meant an increase in the number of manufacturing jobs cut at the plants responsible for creating these new vehicles.
According to a recent press release, automaker General Motors Corp. (GM), which was already struggling, is now in the process of cutting approximately 1,600 jobs in North America. Over the next few days, the company is expected to slice away these positions from its white-collar workforce.
Over the last few months, GM has been doing everything it can to qualify for part of the government’s automaker bail out. In order to do this, the company has had to change its infrastructure. The job cuts are just the most recent part of the company’s attempt to fit the government’s criteria.
Troy Clarke, who is President of GM North America, sent out a mass e-mail to the employees who will be affected by the layoffs. His note referred to the cuts as unfortunate but necessary.
“In these unprecedented times, GM is reinventing every aspect of our business, including our organizational size and structure, to create a lean and agile company,” Clarke wrote in the e-mail.
He went on to refer to the remainder of this week as “a very trying time for the entire GM team, but especially for those employees directly impacted by these actions.”
At this time, GM is operating exclusively on approximately $13.4 billion in government issues loans. Coming up on June 1st is a deadline for the company to decrease their expenses and gain concessions from stakeholders if the company hopes to receive increased funding from the federal government.
Although the 1,600 job cuts should help to make this possible, there is no telling if they will be enough. GM may have to layoff more employees in the near future in order to ensure the government money.
“There is no question, as we look at our revised plan to go deeper and go faster in our operational restructuring, there will be further reductions in manpower, people, that are going to affect communities, affect plants and people, both on hourly and the salaried side of the business,” said GM’s CEO Fritz Henderson in recent statement.
The exact locations that will be affecting by GM’s decision to cut workers is not known at this time.
GM isn’t the only automaker struggling. Ford recently announced that it will be temporarily laying off 1,400 workers at its Chicago manufacturing plant.
“If there is not an actual demand for our products, then our plants will see down time,” David Schoenecker, Chicago UAW Local 551 member and Ford employee, told ABC Channel 7 News. “In the past, we did business in a sense of well, we’ll always sell the type of situation.”
With the economy suffering as it, such a situation no longer exists, making it harder for automakers to continue to produce vehicles and employee workers at rates they have been familiar with.
Tags: Job Search, jobs
Well…. GM has a lot of things that should have been done years ago… I grew up in a GM town and many of my friends fathers worked for GM. It was the best job in town for the pay, but I have heard the stories for decades about the day it will all come crashing down… the signs have been there for a long time and nothing was done… only when Ford started to make changes slowly did GM consider it… Ford is not in good shape either, but at least they started early enough to stay out of the bailout… just look at 2010 models…. GM vs. Ford… who’s done the better job???
I had a current GM employee write an article about all this on my site… check it out!