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GM: Profitable in North America by 2010 or 2011
Automotive News
February 12, 2008 - 7:30 am ET
UPDATED: 2/12/08 4:10 p.m. EST
GM CFO Fritz Henderson
For all of 2007, GM’s global operations reported a record net loss of $38.7 billion. But much of that came from the way GM calculated certain tax assets. When stripping away one-time charges and write-downs, GM’s worldwide automotive operations were profitable last year. GM earned $553 million in 2007, after losing $339 million in 2006.
Still losing in North America
But GM is still losing money in North America, its highest volume market. For 2007, GM recorded a pretax loss of $1.5 billion. But the losses could start shrinking in the second half of 2008, Henderson said, when GM begins to realize savings from the latest round of UAW buyout offers.
One way GM expects to reduce costs is by replacing older, high-cost workers with new employees who will do the same jobs for less money. Today, GM offered all 74,000 of its hourly UAW workers buyout packages that could average about $100,000 per worker.
GM would then hire new workers at lower wages. Henderson would not say how many workers GM expects to accept the buyout package. But he did say about 1,700 of the union jobs are in noncore positions, such as housekeeping and plant maintenance.
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One way GM expects to reduce costs is by replacing older, high-cost workers with new employees who will do the same jobs for less money. Today, GM offered all 74,000 of its hourly UAW workers buyout packages that could average about $100,000 per worker.
