GM begins white-collar cuts with contract workers

DETROIT -- General Motors is already cutting some white-collar contract workers, a month ahead of announced plans to significantly reduce its internal salaried work force.

The automaker Monday confirmed an undisclosed number of contract employees working for its global product group/engineering in division in Warren, Milford and Pontiac, Mich., had been let go as part of the company's announced plans last week to reduce North American salaried and salaried contract workers by 15 percent.

The cuts to contract workers were expected to be in the hundreds, however are scheduled to continue.

Pat Morrissey, a GM spokesman, said the cuts in suburban Detroit were a "very isolated" group of people, but GM has been "significantly reducing" its contract work force as part of its overall cost-cutting measures.

The engineering division also is going through an internal restructuring, which includes a greater concentration on electrified vehicles and moving 3,000 or so employs from Pontiac to Warren.

As announced last week, broader cuts to internal salaried employees are expected in January, he confirmed.

GM declined to comment on how many contract workers it employs and how many it wants to cut.

The confirmed reduction in contract workers comes a week after GM closed a voluntary round of buyouts to roughly 18,000 salaried employees with 12 or more years of experience.

GM, which did not meet its internal targets for the buyouts, is expected to cut about 8,100 of internal and salaried workers, including a 25 percent reduction in its executive ranks, through voluntary and involuntary actions. The automaker employs 54,000 North American salaried workers, however that does not include contract employees.

GM CEO Mary Barra and GM CFO Dhivya Suryadevara announced the work force reduction last week as well as the potential closure of five North American plants, and two elsewhere, as significant cost-cutting measures.

The automaker expects the moves to contribute $6 billion in cash savings by 2020 -- $4.5 billion in cost reductions and $1.5 billion in lower capital expenditures.