General Motors expects to close more US assembly and component plants over the next few years, cutting at least 25,000 manufacturing jobs as it battles high costs and shrinking market share, the company's chief executive said last night.
Chairman and ceo Rick Wagoner, addressing shareholders at a contentious annual meeting, said GM expects to save $2.5 billion a year from the cost-cutting measures.
GM, the world's largest automaker, lost $1.1 billion in the first quarter and is riding out its worst financial crisis in more than a decade. It has been closing and idling plants over the past four years and will have cut its annual North American assembly capacity from six million vehicles in 2002 to five million by the end of this year.
A benchmark annual report on North American manufacturing operations released last week ranked GM dead last among leading automakers in assembly plant capacity utilization.
"We need to get to 100 per cent capacity utilization or better," Mr Wagoner said. A plant can get above 100 per cent capacity utilization when overtime is factored in.
Mr Wagoner said at least 25,000 US jobs would likely be cut in the period 2005-2008, from an hourly work force that stood at 111,000 at the end of 2004.
His warning of plant closings and headcount reductions seemed to suggest an aggressive strategy for turning around an icon of industrial America, and investors welcomed the news, sending GM shares up as much as 2.4 per cent.