Credit Herald

DETROIT–General Motors Co. has rescinded white-collar pay cuts it made last spring as it desperately tried to conserve cash and avoid filing for bankruptcy protection.

The cuts, ranging from 3 per cent for many lower-level workers to 10 per cent for executives, saved GM about $50 million (U.S.) but eventually it spent 40 days under bankruptcy court protection, emerging on July 10. The cuts affected workers in the U.S. and Canada as well as some countries overseas.

GM was losing employees to other companies because its pay scales were no longer competitive with other automakers and manufacturing companies, spokesman Tom Wilkinson said yesterday. He said he did not know how many had left or how many workers were affected.

The company has about 25,000 U.S. salaried workers mainly in the Detroit area. Some employees at the bottom of the pay grades did not see salary cuts.

The U.S. Department of the Treasury, Wilkinson said, reviewed the pay restoration. Workers were notified yesterday morning in an email.

The pay cuts saved the company millions of dollars, but salaries were restored starting Sept. 1 because GM needs to retain workers and keep them happy, Wilkinson said.

"We’re into a period where employee morale is really important as we’re starting to launch products and rebuild the business,” Wilkinson said.

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