GM to ax jobs, shut plants

DETROIT -- General Motors Corp. chief executive Rick Wagoner said the plans outlined yesterday to stop production at 12 facilities and cut 30,000 hourly jobs will help GM return to profitability.

But he declined to specify when GM would show a profit.

The cuts were deeper than had been expected and come as questions swirl over whether GM could go bankrupt as its losses in North America approach $5 billion this year.

In addition to the 12 targeted facilities, GM will reevaluate three packaging operations in Michigan and cut third shifts at two assembly plants elsewhere. Wagoner said the moves will slash structural expenses by about $7 billion, when combined with other cost cuts.

''The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," said Wagoner, who took control of North American operations in April. ''But these actions are necessary for GM to get its costs in line with our major global competitors."

After earning $3.7 billion in 2004, the company lost more than that over the first nine months this year as its US vehicle sales dropped and employee healthcare costs rose.

''It is devastating to the many thousands of workers, their families, and their communities," United Auto Workers president Ron Gettelfinger and vice president Dick Shoemaker said in a statement. It will make the UAW's negotiations with GM on a new contract in September 2007 ''much more difficult," they added.