General Motors to Cut US Marketing Staff

29 March 2006

US sales and marketing staff at General Motors are bracing themselves for further job cuts as the automaker continues to struggle with a "challenging" outlook.

Says Mark LaNeve, vp of North American sales, service and marketing: "Our basic sales and marketing [workforce] is about 40% leaner than a couple of years ago. We're going to do a little bit more this year, and we'll probably do that forever."

The company announced around 400 job losses yesterday (Tuesday), many of them engineers, in an ongoing effort to slim down the white-collar work force by seven percent this year. According to LaNeve, GM has "a very strong sense of urgency to show improved results now".

To this end, he says, the company plans to move away from unprofitable sales to car rental fleets and other "marginally profitable business". Addiitonally, there will be 30,000 blue-collar layoffs and twelve plant closures by 2008.

GM, which lost $10.6 billion (€8.79bn; £6.06bn) last year, expects market share in the US to be 24% at the end of the first quarter, down one point year-on-year.

However, LaNeve is adamant that lower sales volume is the price the company must pay for a return to profitability: "We've taken some pretty painful and necessary steps to run this business in the right way. There's going to be some pressure on [total sales]."

The company has also cut incentives and discounts, which has helped to stabilize retail sales. These were up one percent in February, thanks to strong demand for a new line of trucks and large SUVs.

Data sourced from Wall Street Journal Online; additional content by WARC staff