As part of its cost-cutting efforts, GM is planning to shift an increasing number of white-collar work overseas, according to an internal company report cited as source for a story carried by the Detroit News.
The latest spending plan outlined in the report represents less than 1% of GM’s global manufacturing budget, said The Detroit News, which obtained a copy of the report.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Dow Jones reported that the news comes as Gov. Jennifer Granholm on Monday signed two executive directives giving preference for state contracts to Michigan-based companies that employ American workers. The governor’s decision is aimed at stemming the loss of manufacturing jobs in the state and creating new ones.
“In 2003, we began offshoring activities moving $3.5 (million) of work to lower-cost locations,” the report said, “and we are planning to increase that to $48 (million) in 2004.”
The report, titled “2003 Vehicle Operations” is an annual review of GM’s manufacturing organization by Gerald Elson, GM’s vice president and general manager of vehicle operations.
Along with the offshoring initiative, Elson also discusses several other cost-cutting targets such as reducing overtime by 15%, slashing energy and water use and buying more robots for manufacturing plants from diverse sources worldwide. The report says such efforts could reduce costs by 42%.
Most of the white-collar work sent overseas has gone to Canada. About $200,000 in work has been sent to India, GM said. In 2004, Canada will again receive most of the work, while India will receive slightly more than the previous year. The work involves tasks not currently done by American workers.
GM officials said the amount of work being outsourced wouldn’t displace American workers, according to Dow Jones.
