GM in Trouble, Cutting 25,000 Jobs

General Motors announced some big cutbacks at their annual shareholder meeting:

General Motors Corp. plans to eliminate 25,000 jobs in the United States by 2008 by closing additional assembly and components plants, part of a plan to revive its struggling North American operations.

Speaking to shareholders at GM's 96th annual shareholder meeting in Delaware Tuesday morning, Chairman and Chief Executive Rick Wagoner said the capacity and employment reductions will generate annual savings of roughly $2.5 billion.

Wagoner revealed the cutbacks as he laid out a four-step strategy to revive GM's North American business, the biggest and most troubling part of the world's largest automaker.

Wagoner focused on priorities for clarifying the role of each of GM's eight brands, intensifying efforts to reduce cost and improve quality and continuing to search for ways to reduce skyrocketing health care costs.

GM has a couple of big problems - poor quality vehicles when compared to foreign manufacturers, and terrible union contracts. The union contracts require GM to pay small fortunes to people with relatively low skills who couldn't possible get another job with similar pay and benefits, and the vehicles they produce just don't stand up to the quality of many foreign cars.

I won't buy a GM car (except a Corvette...someday), and I don't even like to rent them. They just don't seem that well put together. Most GM products that I've driven feel less like a well tuned piece of technology than a collection of parts flying in formation. Every now and then one part or another misses the turn and flies off.

The Toyota company car that I've been driving for 2 1/2 years is not the fanciest thing on the road, but it's nearly bulletproof. I've got almost 75,000 miles on that car, and with the exeption of changing the oil, getting new tires and a battery, I haven't had to fix one single thing. It's the epitome of reliability.

I hate to see Americans lose jobs, but it would be better for GM to try and become more efficient while at the same time trying to improve quality. Otherwise, they'll be run out of the US car market, and rightly so.