General Motors said on Tuesday (12/12/00) it would phase out its Oldsmobile division, America’s oldest car brand, cut thousands of jobs and take a one-time charge of up to $US2.5 billion, CNNfm reports.
The world’s largest automaker also issued a warning about its profits for the fourth quarter.
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GM said it now expects to earn $US1.10 to $US1.20 a share for the quarter, compared to $US1.70 a share forecast by analysts on Wall Street. The company earned $US1.86 a share a year earlier. The earnings would be before a $US1.5 billion to $US2.5 billion charge to account for the phase out of the Oldsmobile brand as well as the job cuts, GM said in a statement.
The company said job cuts would equal about 10% of salaried work forces in North America and Europe. The cuts also affect approximately 4,000 employees at four US plants and 2,000 at a Vauxhall plant in the UK.
Analysts have blamed lagging sales for the impending changes at Oldsmobile — the unit is the weakest of GM’s brands — with 2000 sales down 18.5% to the end of November. The brand has limited presence in the hot-selling light-truck segment.
