General Motors has announced that it plans to gain $4 billion to $5 billion in savings in 2010, mostly due to the recent deal inked with the UAW. The Detroit-based automaker says that 2008 could be a challenging, but expects the market to rebound in 2009 and beyond.
“We’re delivering on the turnaround plan we established in 2005 and have exceeded expectations on virtually all counts,” GM CEO Rick Wagoner said.
Because of the concessions given by the UAW in the latest contract agreement, GM plans to eliminate $5 billion in labor costs by 2011. Starting next month, 46,000 hourly employees will be eligible for retirement. In addition, GM will continue to grow in overseas markets.
GM will continue to see savings due to the UAW-run retiree health care plan, which will save the automaker $6 billion a year by 2010.
