GM To Ship More Work To Cut Costs

Detroit | Updated: Mar 25 2004, 05:30am hrs
General Motors Corp is planning to ship $48 million worth of white-collar work abroad, including to India, this year as part of a broad cost-savings programme, officials confirmed Wednesday.

The work includes tasks such as computer-aided planning of future factory layouts and will be sent to Canada and India, according to GM spokesman Dan Flores who confirmed the details of a leaked report.

The sum represents less than one per cent of the companys multi-billion dollar annual manufacturing budget, but is sharply up from last year, when GM outsourced $3.5 million of work to lower-cost locations.

The move is part of a broader cost-savings programme that aims to slash GMs manufacturing costs by 25 per cent by the end of 2005, as it strives to keep up with competitors who are driving relentlessly to reduce costs, the authors of the report said.

Like most automakers competing in the cut-throat US auto market, GM has turned to cost-cutting and productivity improvements to protect paper-thin profit margins that have been eroded by the industrys incentives war.

Mr Flores pointed out that the work, which has gone primarily to Canada in the past, is not being taken away from its US employees.

It is work that was being done by suppliers, or its new projects, he said.

But the move comes amid growing controversy over the issue of outsourcing and offshoring in this US election year and at a time of acute popular concern about new jobs for unemployed workers amid a US economic recovery.