THE AUTO INDUSTRY BAILOUT

GM to cut 1,600 U.S. salaried positions this week

DETROIT (Reuters) -- General Motors is cutting about 1,600 salaried jobs in the United States this week as it rushes to meet a June 1 deadline to restructure under U.S. government oversight, the automaker said today.

The reductions are part of GM's plan to slash its global salaried work force by about 10,000, or 14 percent, in a bid to cut costs. GM also aims to cut 37,000 hourly jobs worldwide by the end of the year.

GM, which has been surviving on $13.4 billion of government loans since the beginning of the year, has until June 1 to prepare deep cuts in in debt, labor costs, dealership network and brands to prove that it can return to profitability. The Obama administration has said the alternative would be bankruptcy.

GM North American President Troy Clarke said in an e-mail to employees that the cuts were needed to ensure GM's long-term viability.

The 1,600 employees will be separated effective May 1, GM said.

GM LETTER TO EMPLOYEES

Dear U.S. Employees,

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.

This week, most functions will be informing select employees that they will be separating from GM as part of the restructuring of our organization. In total, we expect about 1,600 employees to leave the company over the next few days. This will be a very trying time for the entire GM team, but especially for those employees directly impacted by these actions. Even for those employees staying, it will be difficult to see friends and co-workers leaving our company.

Our primary goal is to ensure that we treat those impacted with respect and dignity. To that end, our leadership team has received training to ensure we handle the notification process consistently. We value the many contributions of our impacted team members, and we are doing our utmost to provide them with resources and support throughout this process.

These are difficult actions. However, given the economic realities facing GM, these actions are necessary to help ensure the long-term viability of our company.

Thank you all for your ongoing support during these challenging times.

Troy Clarke

President

GM North America

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