General Motors (GM) South Africa will not be affected by job cuts intended for the corporation’s United States operations, GM US spokesperson Toni Simonitte said on Wednesday.
Simonitte said the group’s chairperson and CEO, Rick Wagoner, has stated categorically that other regions, including South Africa, are performing quite well.
“The huge problems we are currently facing only affect North America,” Simonitte added
AFP newswire reported that GM — hit by falling sales, soaring costs and recent credit downgrades — said on Tuesday it will cut at least 25 000 jobs in the US by 2008 to generate $2,5-billion in annual savings.
“The most challenging and important operating issue we face is getting GM North America, our biggest business unit, turned around and back into a profitable position,” Wagoner told shareholders at GM’s annual meeting in Delaware.
On Tuesday, GM shares gained 31 cents, or 1%, to close at $30,73 on the New York Stock Exchange.
Along with the job cuts, which target about 13,8% of GM’s US workforce, the company plans to close additional assembly and component plants to utilise fully capacity as part of a four-step plan to get GM North America back to profitability.
Key to the success of the plan is GM’s ability to execute a desirable line-up of new cars and trucks, Wagoner said.
Consumers have steadily shied away from GM in favour of Japanese automakers such as Toyota and Nissan. The most recent evidence came in May when GM posted a 5% decline in monthly sales to 393 147, adjusted for two fewer sales days. — I-Net Bridge