GM Fires Hundreds to Save Cash

DETROIT (AP) - General Motors Corp. started firing 1,600
white-collar workers Monday, continuing its effort to slash costs
and qualify for more government loans on the same day it revealed
it spent $2.8 million in the first three months of this year to
lobby federal lawmakers.

Meanwhile, Fiat's CEO left Italy to resume critical talks on an
alliance with Chrysler LLC, as deadlines draw closer for GM and
Chrysler to finish their restructuring plans.

Both automakers are living on a combined $17.4 billion in
government loans and have said they'll need more money to survive.
Chrysler must cut its debt and its labor costs and forge an
alliance with Fiat Group SpA by April 30, or President Barack Obama
says Chrysler won't get any more help.

If GM can swap much of its debt for stock and get concessions
from the UAW and Canadian Auto Workers by June 1, the government
says it will provide more loans to keep the company going.
Bankruptcy financing also is possible if the company determines
Chapter 11 is its best bet to achieve the cuts it needs.

GM's layoffs this week bring the automaker close to its goal
announced in February to cut 3,400 U.S. salaried positions,
spokesman Tom Wilkinson said. GM has about 29,000 salaried workers
in the U.S.

"In these unprecedented times, GM is reinventing every aspect
of our business, including our organizational size and structure,
to create a lean and agile company," GM North America President
Troy Clarke said Monday in an e-mail to employees obtained by The
Associated Press.

Meanwhile, GM said in a government filing that it spent $2.8
million in the first quarter lobbying the U.S. government on a
range of issues, including the economic stimulus package, and
environmental, consumer safety and health issues.

"We're a part of arguably one of the most regulated industries
and we provide a voice in complex policy discussions," GM
spokesman Greg Martin said.

GM's lobbying costs fell 15 percent from the $3.3 million it
spent in the fourth quarter of 2008, but they rose from the $2.7
million GM spent in the third quarter.

Chrysler LLC, which got a $4 billion loan, and parent company
Cerberus Capital Management LP together spent $1.1 million lobbying
during the first three months of this year, according to filings.
That's down about 50 percent from what the two spent during the
last three months of 2008.

GM has said it will eliminate 47,000 jobs worldwide by the end
of 2009, but the cuts may go even deeper as the company moves
toward its deadline. CEO Fritz Henderson has said the automaker
will close more factories beyond five announced in February. The
factories to be closed have not yet been identified.

"There is no question, as we look at our revised plan to go
deeper and go faster in our operational restructuring, there will
be further reductions in manpower, people, that are going to affect
communities, affect plants and people, both on hourly and the
salaried side of the business," Henderson told reporters Friday.

For GM to qualify for more government aid, the UAW must agree to
take stock for part of the roughly $20 billion that GM owes to a
union-run trust that will cover retiree health care costs starting
next year. The UAW and CAW also must agree to cut labor costs.

GM must also persuade the holders of $28 billion in GM bonds to
take stock in exchange for part of the debt.

For Chrysler, the next few days could be critical. Fiat CEO
Sergio Marchionne arrived in the U.S. Monday to try and finish
alliance talks with just over a week to go. The companies are
discussing a deal that would give Fiat a 20 percent stake in the
Auburn Hills, Mich., automaker in exchange for Fiat's small-car

The CAW was scheduled to resume negotiations with Chrysler on
Monday night, and CAW President Ken Lewenza seemed to soften his
stance against deviating from a deal inked last month with GM.

Lewenza said the situation is "shifting enormously" and he's
still waiting to see the outcome of negotiations between Chrysler
and the UAW.

Meanwhile, the UAW told members and supporters in a mass e-mail
Monday to contact the White House and "insist that workers and
retirees must be treated in a fair and equitable manner in any
restructuring plans."

"We need President Obama and his auto task force to stand up
for the interests of workers and retirees in these restructuring
negotiations," the e-mail said. "Please call or e-mail President
Obama right away on this critically important issue."

White House spokeswoman Amy Brundage said in an e-mail that the
auto task force "will continue to have an open door through this
process and will continue to hear the views of all the stakeholders

Although the backing of the UAW and other unions was key to
President Barack Obama's election last fall, he nonetheless has
called on the union to accept deeper concessions so the Detroit
Three can better stand up to the foreign competition. Japanese and
European automakers generally have lower labor costs and a nonunion
work force at their U.S. facilities.

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