GM cuts back on contract pay

DETROIT - General Motors is trimming payments to contract employment agencies by 7 percent, just weeks after Ford Motor Co. and Visteon Corp. made the same move. GM's reduction is effective Dec. 1; agencies were notified Nov. 26.

GM is letting individual agencies decide how to reconcile the cut.

When Ford and Visteon made their cuts, some agencies decided to pass a 7 percent pay cut to their employees working for those clients.

GM has 12,000 contract workers, down from 16,000 a year ago. That previous reduction was part of a white-collar job cut announced in December 2000.

A DaimlerChrysler spokeswoman said while the Chrysler group has no plans to cut payments to contract agencies, the company will monitor the situation for what makes the best business sense.

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