General Motors (GM) said on Tuesday it planned to offer voluntary buyouts to all 74,000 members of its union-represented US workforce as the struggling automaker posted its biggest annual loss ever.
GM reported on Tuesday that it lost a record US$38.7 billion last year, mostly as a result of a writedown in tax credits in the third quarter that were expected to expire unused.
The employee buyouts would permit GM to make a further transformation of its workforce after years of painful reorganization in the face of eroding market share, especially in North America, by making room for a new class of lower-paid workers in its US plants.
GM said that while it expects to continue to grow its revenue globally this year, conditions in its home market are "challenging" and future job cuts could occur if conditions worsen.
"If they are going to be tougher [than expected], we'll take whatever actions we need to do to get our capacity in line with demand," said Fritz Henderson, GM's chief financial officer.
The automaker expects to slash US$4.5 billion to US$5.5 billion in costs by 2010 and could see revenues increase another US$1 billion to US$1.5 billion if the North American auto market returns to its previously robust demand, he said.
"In order to get North America sustainably profitable in generating cash we need to execute all of our structural cost actions and we need to win in the market," Henderson said in a conference call.
"We've started to see some evidence of that in 2007, which is encouraging, but we need to frankly step on the gas in terms of how we're performing in the market," he said.
The White House on Tuesday expressed optimism about the auto industry over the long term, while noting that GM's loss was "significant."
US carmakers are adjusting "in structural ways that can help keep them competitive in the future and we're confident that, over time, that they're going to be successful in doing that," spokeswoman Dana Perino said.
Virtually all of the company's loss for last year was the result of a massive accounting charge.
GM in the third quarter decided to write down the nearly US$39 billion in accumulated tax credits when it realized it might not be able to earn enough money to use them before they expire.
Excluding special items, GM's loss was a more modest US$23 million, or US$0.04 per share, on revenues of US$181 billion.
In the fourth quarter, GM reported a net loss of US$722 million, or US$1.28 per share, with results affected by a variety of special charges and tax benefits.
Excluding special items, the results would translate to a profit of US$46 million, or US$0.08 a share, on revenues of US$47.1 billion.
GM chief executive officer Rick Wagoner said 2007 was a year "of important progress for GM, as we implemented further significant structural cost reductions in North America [and] grew aggressively in emerging markets."
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS