GM offers early retirement to 9,000 salaried workers

MICHIGAN: General Motors is offering early retirement incentives to about 9,000 US salaried employees, or 28% of that workforce, people familiar with the plan said. GM said on July 15 it wanted to cut 20% of its salaried worker costs in the US and Canada by November 1. The employees have 45 days to consider the proposal, said the people, who asked not to be named because the details haven���t been made public.

CEO Rick Wagoner needs the retirements to get $1.5 billion in salaried worker cost cuts and meet his goal of raising enough cash to weather the weakest US auto market in 15 years. GM lost $15.5 billion last quarter as buyers shunned its profitable trucks because of $4-a-gallon gasoline.

Spokeswoman Deborah Silverman confirmed that GM is discussing the packages with eligible workers, without elaborating. GM���s 2,500 salaried workers in Canada aren���t part of the offer, the people said. There are 32,000 salaried employees in the US. GM���s target is to reduce that payroll by 15%, or about 5,175 jobs, people familiar with the plans have said.

Wagoner has already persuaded 53,000 union workers to accept buyouts or early retirement and announced plans to close more than a dozen North American plants. GM is shifting its emphasis toward more fuel-efficient cars and car-based SUVs and away from pickups and larger SUVs. The salaried-worker savings are part of GM���s plan to increase liquidity by $15 billion through the end of 2009. Under the savings plan, GM suspended its quarterly dividend, pared spending on product development and advertising, and delayed payments to a union retiree health fund. GM has lost money the last three years, and record gasoline prices and a weakening economy may extend that streak in 2008.

Meanwhile, General Motors is recalling 857,735 vehicles equipped with heated windshield wiper fluid system for a potential short circuit problem, according to federal safety regulators. A short circuit in the system may cause other electrical features to malfunction, create an odor or cause smoke, increasing the risk of a fire, the National Highway Traffic Safety Administration said on its website.

New York Times quoted a top GM executive as saying automakers deserve as much as $50 billion in government-backed loans so that they can build more fuel-efficient cars. This is double the amount being currently sought by the big three Detroit-based automakers as they struggle to ride out a steep downturn in US auto sales. The automak-ers have already made considerable progress in transforming them-selves and the government should help them proceed faster, GM vice- chairman Robert Lutz said.