GM Initiates Sweeping Cost-Cutting Plan

General Motors Corp. officials today announced a sweeping cost-cutting plan that includes early retirement incentives, trimming advertising spending and hiring only recent college graduates to fill white-collar jobs.

The program, effective only in North America, has no target or deadline, spokesman Terry Sullivan said. It is separate from GM’s “Action Plan” of 1987 that aims to slash up to $13 billion in costs by the end of this year.

“Because of the increasing competitive nature of the automotive industry, we are intensifying our cost-reduction activities throughout General Motors,” he said.

GM, along with its Big Three cousins Ford Motor Co. and Chrysler Corp., on Thursday announced temporary plant closings for later this month and into February that will idle 58,600 employees for at least a week.

The shutdowns resulted from swelling inventories of new cars and slow sales.

The reduced production and new cost-cutting program indicate GM’s concern about an industry slump that deepened with plummeting sales in October.

Sullivan said the new GM program will begin immediately.

No segment of GM’s operations is immune from the cost-cutting, he said, but critical programs, especially product development, will remain intact.

GM, the world’s largest auto maker, has 107,000 salaried and 345,500 hourly workers in the United States and Canada. It has about 33,000 employees overseas.