General Motors is stopping its matching payments to all employees’ 401(k) savings plans, a spokesman said Thursday, October 23. The company also is preparing another round of salaried-job cuts.
GM told employees Wednesday, October 22, about the temporary discontinuation, effective November 1, via a Web-based announcement, spokesman Tom Wilkinson said. GM had matched 401(k) contributions up to the first 4 percent of employees’ income, he said.
The cuts were announced amid new reports that GM will be stepping up efforts to reduce costs beyond the $15 billion in savings and asset sales identified during the summer.
GM is planning to make involuntary cuts in its salaried and contract workforce in response to a deepening slump in U.S. auto sales.
GM, in a letter to executives, said the cuts would start in late 2008 and early 2009.
“Actions are being taken throughout GM’s global operations to address our increasing need to conserve cash,” according to the letter, which was seen by Reuters.
GM is also temporarily stopping its programs helping salaried employees with college tuition and child adoption. The company will stop accepting applicants for that assistance January 1, Wilkinson said.
Although the program cuts will save GM money during a tough financial time, the decisions also remind employees of the need to “tighten their belts,” Wilkinson said. “Everyone needs to watch the cost of everything. Any opportunities to save cash are important.”
GM had stopped its 401(k) matching program “several years ago,” Wilkinson said. The previous cessation lasted about a year.
Meanwhile, union workers at an Ohio plant that GM plans to close in late 2008 have overwhelmingly accepted a deal with the automaker that provides buyouts and a retiree health care trust, a local official said.
Workers at the GM facility in Moraine, Ohio, represented by the IUE-CWA union, voted 993-82 to accept the plant-closing deal, local president Gaylen Turner said.
It was not immediately clear how big a charge GM would take for the plant closing.
Under the agreement, GM agreed to pay $1.6 billion into a health care trust and to offer buyouts of up to $140,000 to the factory workers in exchange for closing the plant.
Filed by Chrissie Thompson of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
