Big 3 runnin' on emptyAnother round of job and cost cuts at General Motors and Ford, coupled with the prospect of more plant shutdowns at Chrysler, thickened the already dark clouds hanging over North America's auto sector yesterday an industry that's desperately struggling to emerge from one of worst periods in its history.
Unless the battered car market recovers, there's a chance that one of the so-called Detroit Three auto companies will go bankrupt, killing tens of thousands of jobs in Canada and the United States.
3,600 LOSE WORK
Yesterday, GM Corp., the world's biggest carmaker, reported a US$2.5-billion loss in the third quarter, announced 3,600 job cuts, and warned it could run out of cash next year if the U.S. economic slump continues and it doesn't get government aid.
The cuts affect numerous U.S. plants and the company's biggest Canadian factory, a 5,000-employee carmaking operation in Oshawa, just east of Toronto. About 500 workers will temporarily lose their jobs there as output is reduced.
CAW president Ken Lewenza said that while the cuts at the Oshawa car plant are temporary, the move signals the need for Canadian government financial aid for the troubled industry.
Cuts are also coming to the white collar workforce at the company, which once employed more than 30,000 Canadians but has pared back its workforce over the last two decades.
In a conference call with reporters and analysts, GM chairman and CEO Rick Wagoner said the automaker, with 266,000 employees, will "take every action we possibly can" to avoid bankruptcy.
"We're convinced that the consequences of bankruptcy would be dire," he said, adding that the company will use every source of funding it can.
"We need to find a way to get through this, and that's really our focus."
In Canada, GM has already announced plans to shut down a truck plant in Oshawa next fall, with the loss of 2,600 jobs, and a transmission plant in Windsor, in 2010, cutting another 1,400 jobs.
OUTLOOK BLEAK
And more cuts could be coming as production shrinks to deal with GM's staggering loss of market share, caused by rising fuel prices, the slumping U.S. economy and a credit crunch that has made it hard to finance vehicle purchases in the U.S.
"Today's news is devastating to our members in Oshawa," Lewenza said. "If there is a silver lining it's the fact that these are temporary and not permanent layoffs."
GM also said it has suspended talks to acquire Chrysler. While it didn't specifically name the automaker, GM said it was delaying considerations for a "strategic acquisition."
Chrysler said it will now focus on returning to profitability, which could lead to big cuts at the company's operations in the U.S. and Canada as it tries to reduce costs.
The GM streamlining comes in the wake of 470 layoffs of CAW workers at the Navistar truck plant in Chatham and another 500 job losses at the CAMI plant in Ingersoll, a joint venture between GM and Japanese carmaker Suzuki.
