General Motors announced on Monday that it plans to cut 30,000 jobs by 2008 by closing nine manufacturing plants and three service and parts operations in North America. The company’s stock is in the tank–it hit an 18-year low last week–and the cutbacks are designed to stall any further decline that might lead into bankruptcy.
The Economist has the bloody details. The automotive giant was on the verge of Chapter 11 in the early 1990s and fought its way back, and will have to again despite this job-cutting move and the recent shuttering of Oldsmobile. While the workers are bearing the brunt of GM’s troubles, the truth is the company has been losing market share for years (now below 25 percent) and its only reliable profitmaker is the truck/SUV market, which doesn’t exactly have the brightest future given rising oil prices. With Toyota poised to become the world’s largest car manufacturer next year, GM’s troubles might get worse before they get better.