CEO Watch G.M. Ponders Job Cuts, Downsizing
Reeling from slumping sales amid a stalling U.S. economy, General Motors C.E.O. Rick Wagoner is considering cutting thousands of jobs at the Detroit automaker, while also contemplating whether to stop production on some G.M. brands, according to a report by the Wall Street Journal.
As the automaker continues to rack up massive losses, Wagoner and other executives believe the new strategy can bring the G.M. back to profitability by 2010.
The jobs cuts, according to the Journal, are likely to be approved by early August, when G.M.'s board of directors meets. Board members will also consider eliminating some of G.M.'s brands.
The automaker has already put Hummer up for sale as overall G.M. sales nosedive amid skyrocketing oil costs. Buick could be next in line for sale, according to MarketWatch. Buick sales are down 42 percent from a year ago, and Pontiac, GMC, Saturn, and Saab, all bleeding money, could join Hummer on the sales block.
Wagoner and G.M.'s chief financial officer, Frederick Henderson, have closely monitored most G.M. brands for possible brand reductions, except for Cadillac and Chevrolet, analysts say.
For years, Wagoner has resisted the thought of reducing the number of G.M. brands, according to the Journal report, but massive losses, and Henderson's promotion as chief operating officer, have forced G.M. to rethink the viability of some of its brands.
Wagoner announced earlier this year that G.M. will close four truck and sport utility plants, as the company reels from a 16.3 percent drop in sales in 2008 and a stock price that recently dipped below $10 for the first time since 1954.
