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GM to cut a further 21,000 jobs | GM to cut a further 21,000 jobs |
(11 minutes later) | |
General Motors (GM) is to cut a further 21,000 US jobs this year and phase out its Pontiac brand, as it aims to meet a 1 June deadline to revamp its business. | General Motors (GM) is to cut a further 21,000 US jobs this year and phase out its Pontiac brand, as it aims to meet a 1 June deadline to revamp its business. |
GM has to complete its restructuring by that date to gain the extra multi-billion dollar government loans it needs to avoid bankruptcy protection. | GM has to complete its restructuring by that date to gain the extra multi-billion dollar government loans it needs to avoid bankruptcy protection. |
The firm also said it hoped to halve its debts by persuading bondholders to swap $27bn (£19bn) of bonds for shares. | The firm also said it hoped to halve its debts by persuading bondholders to swap $27bn (£19bn) of bonds for shares. |
GM also wants the government to swap half its current loans for a 50% stake. | GM also wants the government to swap half its current loans for a 50% stake. |
The government has so far given GM $15.4bn in loans. | The government has so far given GM $15.4bn in loans. |
Falling sales | Falling sales |
GM said it also wants its main union, the United Auto Workers, to accept shares in the firm in exchange for cancelling 50% of the $20bn the firm must pay into a union-run healthcare trust. | GM said it also wants its main union, the United Auto Workers, to accept shares in the firm in exchange for cancelling 50% of the $20bn the firm must pay into a union-run healthcare trust. |
The Pontiac brand has been in existence since 1926 | |
The carmaker said it would phase out the Pontiac brand by the end of the year in order to focus on four brands in the US - Chevrolet, Cadillac, Buick and GMC. | The carmaker said it would phase out the Pontiac brand by the end of the year in order to focus on four brands in the US - Chevrolet, Cadillac, Buick and GMC. |
GM also said it would reduce the number of its US dealerships. | GM also said it would reduce the number of its US dealerships. |
After all the proposed changes, existing GM shareholders would own only 1% of the firm. | After all the proposed changes, existing GM shareholders would own only 1% of the firm. |
GM has already cut 10,000 US jobs this year, announced in February. Following the completion of the latest 21,000 reductions, its American workforce will be reduced to 40,000. | GM has already cut 10,000 US jobs this year, announced in February. Following the completion of the latest 21,000 reductions, its American workforce will be reduced to 40,000. |
Like US rivals Ford and Chrysler, GM has seen sales fall sharply in its core home market in recent years, a decline that has intensified as the recession has continued. | Like US rivals Ford and Chrysler, GM has seen sales fall sharply in its core home market in recent years, a decline that has intensified as the recession has continued. |