General Motors (GM) said on Tuesday it planned to offer voluntary buyouts to all 74,000 members of its union-represented US workforce as the struggling automaker posted its biggest annual loss ever.
GM reported on Tuesday that it lost a record US$38.7 billion last year, mostly as a result of a writedown in tax credits in the third quarter that were expected to expire unused.
The employee buyouts would permit GM to make a further transformation of its workforce after years of painful reorganization in the face of eroding market share, especially in North America, by making room for a new class of lower-paid workers in its US plants.
GM said that while it expects to continue to grow its revenue globally this year, conditions in its home market are "challenging" and future job cuts could occur if conditions worsen.
"If they are going to be tougher [than expected], we'll take whatever actions we need to do to get our capacity in line with demand," said Fritz Henderson, GM's chief financial officer.
The automaker expects to slash US$4.5 billion to US$5.5 billion in costs by 2010 and could see revenues increase another US$1 billion to US$1.5 billion if the North American auto market returns to its previously robust demand, he said.
"In order to get North America sustainably profitable in generating cash we need to execute all of our structural cost actions and we need to win in the market," Henderson said in a conference call.
"We've started to see some evidence of that in 2007, which is encouraging, but we need to frankly step on the gas in terms of how we're performing in the market," he said.
The White House on Tuesday expressed optimism about the auto industry over the long term, while noting that GM's loss was "significant."
US carmakers are adjusting "in structural ways that can help keep them competitive in the future and we're confident that, over time, that they're going to be successful in doing that," spokeswoman Dana Perino said.
Virtually all of the company's loss for last year was the result of a massive accounting charge.
GM in the third quarter decided to write down the nearly US$39 billion in accumulated tax credits when it realized it might not be able to earn enough money to use them before they expire.
Excluding special items, GM's loss was a more modest US$23 million, or US$0.04 per share, on revenues of US$181 billion.
In the fourth quarter, GM reported a net loss of US$722 million, or US$1.28 per share, with results affected by a variety of special charges and tax benefits.
Excluding special items, the results would translate to a profit of US$46 million, or US$0.08 a share, on revenues of US$47.1 billion.
GM chief executive officer Rick Wagoner said 2007 was a year "of important progress for GM, as we implemented further significant structural cost reductions in North America [and] grew aggressively in emerging markets."
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS