WILMINGTON, Del. -- If General Motors' shareholders came to Delaware Tuesday morning looking for a plan, they got one in large type.
Chairman Rick Wagoner told an overflow audience of shareholders and international media that the automaker will cut at least 25,000 employees within three years by closing additional North American assembly and parts plants.
Wagoner said those cuts will save GM about $2.5 billion annually.
"We feel like we owed our investors some explanation of the strategy and where we felt the savings were," Wagoner told reporters after the two-and-a-half hour meeting.
Wagoner revealed the cutbacks as he outlined a four-step strategy to revive GM's North American business.
The four steps include:
But the big news was the announcement of manufacturing job cuts.
"Any plan that encompasses reducing your workforce by roughly 25 percent over a four-year period is a significant plan," Wagoner said. "Yes, it's an acceleration. It's facilitated by some of the plant closings we've announced and some that will be upcoming."
Some cuts from attrition
Wagoner said some of the 25,000 job cuts would also come from attrition. He said GM may offer "special attrition programs in places where we have closed down a business or sold a business to give employees an opportunity to move to other positions."
Wagoner would not specify which plants will close, but he said GM has a short list already drawn up. The next step involves working with the UAW to come up with a final decision.
"They are informed of those plans and specific things will be announced as we make specific calls," Wagoner said of the union. "This is going to play out over a three or four year period."
Wagoner added: "We see a high likelihood of closing additional facilities."
Cutting 25,000 jobs would amount to 13.8 percent of GM's North American workforce of 181,000 people.
In the cost-reduction area, Wagoner said it was vital for the company to improve efficiency at its manufacturing plants. He said plant closings and idlings in recent months have reduced GM's assembly capacity in North America from 6 million in 2002 to 5 million by the end of this year.
GM closed a factory in Linden, N.J., in April and another in Baltimore in May, affecting almost 2,000 employees. GM closed two plants recently in Lansing, Mich. Those closures are not included in the 25,000 job cut tally.
"A lot of the reductions are efficiency at existing plants, to be honest," Wagoner said. "We need to get to 100 percent capacity utilization or better."
The industry defines 100 percent utilization as running two eight-hour shifts at 100 percent capacity
Tuesday's meeting was attended by 194 shareholders, roughly double the attendance of recent years, GM said.
GM investors have seen their shares this year fall to the lowest price in more than a decade as the automaker's market share has slipped and GM's bond rating has been cut to junk, or non-investment grade, status by two ratings firms.
Jim Dollinger, general manager of Suski Chevrolet-Buick in Birch Run, Mich., suggested several times that Wagoner resign.
Jerry Raposa, a GM shareholder from Attleboro, Mass., attended the meeting for the first time out of a sense of urgency.
"I am deeply concerned," said Raposa, who holds 700 shares. "GM cannot continue to operate this way. Right now the direction they are moving is abysmal."
On health care, Wagoner said GM has been in engaged in "intense discussions" with the UAW on a cooperative approach to significantly reduce GM's health care cost disadvantage.
"We have not reached an agreement at this time, and to be honest, I'm not certain we will," he said.
GM's losses topped $1 billion in the first quarter, and sales for profitable, high-margin SUVs have slumped.
"Our absolute top priority is to get our largest business unit back to profitability as soon as possible," Wagoner said.
Billionaire investor Kirk Kerkorian's offer to purchase 28 million GM shares at $31 apiece, boosting his stake to about 9 percent from 4 percent, expires on Tuesday. Wagoner said Kerkorian's Tracinda Corp. has not asked for a seat on the board.
You may e-mail Jason Stein at