General Motors Corp., trying to cut enough costs by a March 31 deadline to keep $13.4 billion in U.S. aid, is readying a plan to fire thousands of salaried employees, people familiar with the plans said.

The company will include the plans in a Feb. 17 progress report to the U.S. government, said the people, who asked not to be named because the plan isn’t public. The total may match the more than 5,000 salaried positions eliminated last year, the people said. GM started offering buyouts to 62,000 union workers this week and is in talks with the United Auto Workers about trimming benefits.
“They need to be very aggressive,” said Dennis Virag, president of the Automotive Consulting Group Inc. in Ann Arbor, Michigan. “They need to prove they can be viable. To do that, they need significant cutbacks of both salaried and union workers.”
GM is facing increased pressure to slash expenses after the Detroit automaker’s U.S. auto sales fell 49 percent in January. GM and Chrysler LLC have a Feb. 17 deadline for a progress report on their efforts to restructure their businesses, return to profit and repay $17.4 billion in U.S. loans by the end of 2011.
GM spokeswoman Renee Rashid-Merem said the company had no comment on the contents of the progress report. UAW spokesman Roger Kerson had no comment.
Last month, the company forecast U.S. industrywide sales this year of 10.5 million cars and light trucks, compared with 13.2 million last year and an average of 16 million this decade.
GM said it expects global sales will fall to 57.5 million autos from 67.1 million last year, or about 10 percent worse than a December forecast for global sales.
“The decline is a global situation, so the cuts need to be made on a worldwide basis,” Virag said.
GM managers are looking for positions to eliminate in all departments worldwide as global demand shrinks, said the people. The automaker may announce some actions prior to the Feb. 17 report, the people said.
GM said in the Dec. 2 report to Congress that it plans to cut its U.S. salaried and union workforce in 2012 to a range of 65,000 to 75,000 workers, from 96,537 last year.
The automaker reduced salaried costs by 30 percent last year through job cuts and elimination of benefits. Moves included cuts to health care for retirees 65 and older, a halt to matching contributions to 401(k) retirement programs, and the elimination of bonuses or raises this year. GM has about 29,000 U.S. salaried workers.
The salaried-job cuts may help with efforts to get additional union concessions, the people said. GM is offering retirement incentives to most of its 62,000 UAW members that include $20,000 cash and a $25,000 voucher for a new car for workers willing to retire or quit. About 22,000 of the GM workers are eligible to retire.
GM would like to get more than 10,000 union workers to leave and is expecting at least half that many to accept, one person said. Workers have until March 24 to decide.
The UAW has already agreed to end the so-called jobs bank program, which paid members to show up for work when there weren’t tasks to perform. The jobs bank program started in 1984 as part of an agreement to help prevent firings of workers replaced by robots or by other productivity improvements. GM and the UAW are focusing talks on programs that supplement workers’ pay when they are laid off, the cost for vacations and other paid time off, and classification of so-called skilled trades positions like electricians and pipe fitters, said the people. There have been no agreements on changes in any of those areas.
(Source: Bloomberg)