CHALLENGER, GRAY & CHRISTMAS, INC. DATE March 28, 2006
For Release Upon Receipt
Statement by John A. Challenger, chief executive officer of global outplacement consultancy Challenger, Gray & Christmas, Inc. on the Tuesday white-collar job cuts by General Motors.
NEW YORK - "General Motors response to its $10 billion loss still looks more like the beginning of the end for the company. The labor agreement has not changed - it will now be applied to fewer workers. The massive buyout, if it becomes the solution rather than a strategy preparing GM for fundamental transformation, may simply be a massive dose of the wrong medicine. When the United Auto Workers and GM start contract negotiations in 17 months, or perhaps it will happen at the UAW/Delphi talks this spring, both parties will decide whether they really want to save a company that can no longer be the same company. If management is not able to create an agreement with the workers consistent with what other manufacturers are offering their workers today, or the UAW decides to strike, the company could go under.
"It is still a train wreck waiting to happen, and it will be hard to get it off the rails."