GM chief executive expects more job cuts

From Reuters

General Motors Corp. will cut more jobs this year as it closes plants and tries to wrench concessions from its major union in a crucial round of contract negotiations, Chief Executive Rick Wagoner said Friday.

Wagoner also said GM would not concede its ranking as the world's No. 1 automaker to Toyota Motor Corp. this year without a "fight for every sale."

GM, which lost $10.6 billion in 2005, cut more than 34,000 jobs last year and unveiled plans to close 12 plants and reduce recurring costs by $9 billion. Wagoner said more limited job cuts were possible in 2007.

"I don't rule out continued steps," Wagoner said when asked at a news conference about further job cuts this year. "I think it'll be a lot more through attrition than buyouts, but I wouldn't rule it out."

GM will be looking for more concessions as it holds labor talks with the United Auto Workers union this year, aimed at clinching a new four-year contract.

For GM, which has not faced a strike since 1998, the negotiations are expected to test a collaborative relationship with the UAW as the automaker seeks to unwind many of the costly obligations written into past contracts.

"Within a contract period, we've made a lot of progress," Wagoner said of the last year. "But we are not fully competitive yet.... We need to make progress in the 2007 negotiations. These are tough issues."

GM's healthcare costs average $1,500 per vehicle, compared with about $200 for Japanese rival Toyota.

"The structure we have doesn't work in today's global industry," Wagoner said. "We've made some big moves, and I think it's in everyone's interest to make some more so we can get to the position where positions can be added in the U.S. rather than always being downsized."

Although GM still sells twice as many cars in the U.S. market as Toyota does, it probably will be overtaken by the Japanese automaker for the global top spot in terms of production in 2007, analysts say.

GM shares rose 60 cents to $30.24.

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