General Motors to cut salaried jobs in US

NEW YORK: Troubled US automaker General Motors is planning to cut white-collar jobs in the United States because of rising financial problems, a source close to the situation said on Thursday.

The source confirmed a letter published in the online The Wall Street Journal today from GM chief executive Rick Wagoner and chief operating officer Fritz Henderson.

Addressed to US-based GM executives, the letter said its voluntary employee buyout program to cut costs was incapable of countering the negative fallout from the global financial crisis on the North American and western European markets.

"The global economic outlook remains very concerning. As a result, actions are being taken throughout GM's global operations to address our increasing need to conserve cash," wrote Wagoner and Henderson.

"Here in the US, we need to reduce our salaried and contract workforce by even more than we anticipated. In this regard, we expect to initiate involuntary separations in some areas of the business, late this year and early in 2009."

The letter did not say how many jobs would be eliminated. Wagoner and Henderson also unveiled changes in salaried employee benefits, including the suspension of a stock savings match and other reimbursement programs.

"We regret needing to take these actions, but they are necessary based upon current business conditions," they said.

GM and its two major rivals Ford and Chrysler are under pressure as US consumers radically shifted away from their gasoline-guzzling vehicles this year amid high gas prices.

The company has undertaken a vast restructuring program since 2005, shutting factories and renegotiating labor union contracts to cut costs.