USA: GM president asks all departments for "aggressive cost reduction" - paper
General Motors is pushing its department executives to make deeper cost cuts as the world's largest car maker faces slower-than-anticipated sales and declining market share, the Detroit Free Press (DFP) said.
The DFP said that GM spokeswoman Toni Simonetti on Monday acknowledged that Gary Cowger, president of GM North America, asked all departments to pursue "aggressive cost reduction" in areas such as nonessential travel and out-of-office business meetings. "There has been no specific mandate," she told the paper. "They are being asked to be ever-vigilant and look to do better because the competitive landscape is extremely fierce."
The DFP said the renewed push comes after GM announced earlier this year it expected vehicle development and marketing departments to cut their headcount by 3% to 7% this year. Most of those cuts will come through attrition.
According to the DFP, at the end of 2002, GM had 45,000 salaried and 8,100 contract workers in North America. In the last two years GM has cut its white-collar workforce by at least 10%.
The DFP said that GM, like other car makers, is spending more on incentives to sell cars in a contracting market.
As a result, GM is spending more to sell a vehicle. To cut costs, GM must resort to other methods to trim expenses, the Detroit Free Press said.