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Surely everyone saw this coming: GM just announced that it's cutting 10,000 salaried jobs from its global workforce by the end of 2009. But wait, there's more: the company is also instituting pay cuts for its salaried employees in the U.S., effective May 1. Happy Tuesday!
Of the planned 10,000 layoffs, approximately one-third will be in the U.S. The company hasn't announced details of severance packages for affected workers, but given the somewhat skimpy buyout offer GM presented to hourly employees, it's doubtful that they'll be too generous.
As for the pay cuts, U.S. execs are likely to see a fairly uniform 10% reduction, with other white-collar workers experiencing cuts in the 3% - 7% range. No word yet on how this will impact GM's high-end executives, whose pay is being capped at $500,000. A 10% cut on top of a meager half-million salary? Looks like Buffy's sweet sixteen party won't take place in Gstaad after all.
GM says that the cuts are part of the company's restructuring plan, which GM is required to present to congress on February 17 in order to receive its share of bailout dollars. And that may be true, but it's also entirely possible that the restructuring has simply triggered cutbacks that should've been instituted long ago.
Whatever the case, one thing is painfully clear: Bob Lutz knows when to fold 'em.