Page last updated at 15:40 GMT, Tuesday, 10 February 2009

GM confirms 10,000 jobs are to go

GM vehicles
GM has beet hit by a "severe drop" in sales

US carmaker General Motors has confirmed it is cutting 10,000 jobs from its workforce by the end of 2009.

GM said it would reduce its global salaried staff to about 63,000 from its current level of 73,000.

The company said it was forced to act by a "severe drop" in vehicle sales worldwide and by the need to restructure "for long-term viability".

About 3,400 cuts will be made in the US. These had already been outlined in a plan put forward to the government.

Restructuring plan

The cost-cutting was part of an initial restructuring plan GM submitted to Congress on 2 December 2008 as part of a request for aid.

The chief executives of Ford and GM also offered to work for $1 a year to persuade Congress to approve the emergency aid.

At the end of last year, the US government gave GM $10.4bn in loans and Chrysler $4bn. A further $4bn was to be provided to both firms at a later date.

GM's car loan arm GMAC also received a $5bn rescue package from the US government.

Under the terms of the deal, the US Treasury agreed to buy shares in GMAC.

Pay cuts

On Monday, GM also announced "a temporary pay reduction for a majority of US salaried employees" from 1 May to the end of the year, when it will be reviewed.

Executives' pay will be cut by 10%, while "many others" will see reductions of 3% to 7%, the carmaker said.

"Other countries are currently reviewing compensation and benefits for salaried employees," GM said.

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