April 21, 2009 at 12:37 pm

GM to cut 1,600 jobs this week

White-collar reduction is cost-cutting move aimed to meet federal aid qualifications

General Motors Corp. has started notifying about 1,600 white-collar workers -- most of whom work in southeastern Michigan -- that they will lose their jobs this week as the cash-strapped automaker cuts costs that could help the automaker qualify for up to $16.6 billion in additional federal aid.

The announcement was made by GM North American President Troy Clarke in an e-mail sent to employees Monday, spokesman Tom Wilkinson said.

"This is part of really restructuring the company to a smaller, leaner company, one that can, as the (Obama) administration requested, be profitable on an ongoing basis," Wilkinson said.

"In these unprecedented times, GM is reinventing every aspect of our business, including our organizational size and structure, to create a lean and agile company," Clarke wrote in the e-mail to employees.

GM, which has received $13.4 billion in federal loans, has until June 1 to restructure and obtain concessions from key stakeholders such as the United Auto Workers and bondholders, or be forced into filing Chapter 11 bankruptcy.

The job cuts will hit salaried workers across the United States, but particularly in Metro Detroit locations such as the Renaissance Center, the GM Tech Center in Warren, Milford Proving Grounds, and offices in Pontiac and Grand Blanc.

GM is cutting 3,400 salaried jobs in the United States as part of a broader effort to eliminate 47,000 jobs worldwide by the end of the year.

The salaried workers will get a half month's pay and benefits for each full year of service, up to a maximum of six months of severance pay and benefits.

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