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GM rescinds pay cuts for white-collar workers

By Associated Press
September 12, 2009

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DETROIT - General Motors Co., in an effort to keep employees happy as it tries to climb back to profitability, has rescinded white-collar pay cuts it made last spring as it desperately tried to conserve cash and avoid bankruptcy protection.

The automaker was losing staff because its pay scales were no longer competitive with other automakers and manufacturing companies, spokesman Tom Wilkinson said yesterday. He did not know how many had left or exactly how many workers were affected by the cuts.

GM is trying to lure buyers back to its brands and fix its image after filing for Chapter 11 earlier this year. This weekend it will launch a new advertising campaign that offers to buy back cars and trucks if customers aren’t satisfied with them.

The earlier pay cuts, ranging from 3 percent for many lower-level workers to 10 percent for executives, saved the company about $50 million, but eventually it spent 40 days under bankruptcy court protection, emerging on July 10. The cuts affected workers in the United States and Canada as well as some overseas countries.

“We’re into a period where employee morale is really important as we’re starting to launch products and rebuild the business,’’ Wilkinson said.

Some employees at the bottom of the pay grades did not see salary cuts.

The pay restoration, which began Sept. 1, will be funded primarily with government dollars, at least for now. But Wilkinson said keeping good employees and selling more vehicles will help GM turn around. He said the Treasury Department reviewed the pay restoration.