DETROIT ( Reuters) - General Motors Corp. (GM.N) will cut more jobs in 2007 as it closes plants and tries to wrench concessions from its major union in a crucial round of contract negotiations, Chief Executive Rick Wagoner said.þþWagoner, speaking to a group of reporters on Thursday, also said GM would not concede its ranking as the world's No. 1 automaker to Toyota Motor Corp. (7203.T) this year without a ''fight for every sale.''þþGM, which lost $10.6 billion in 2005, cut more than 34,000 jobs last year and unveiled plans to close 12 plants and reduce recurring costs by $9 billion. Wagoner said more limited job cuts were possible in 2007.þþ``I don't rule out continued steps,'' Wagoner said when asked about further job cuts this year. ``I think it'll be a lot more through attrition than buyouts, but I wouldn't rule it out.''þþGM will also be looking for more concessions as it kicks off labor talks with the United Auto Workers union this year, aimed at clinching a new four-year contract.þþFor GM, which has not faced a strike since 1998, the negotiations are expected to test a collaborative relationship with the UAW as the automaker seeks to unwind many of the costly obligations written into past contracts.þþ``Within a contract period, we've made a lot of progress,'' Wagoner said of the past year. ``But we are not fully competitive yet ... we need to make progress in the 2007 negotiations. These are tough issues ... and health care has put us at a $5 billion disadvantage.''þþGM's health-care costs average $1,500 per vehicle, compared with about $200 for Japanese rival Toyota.þþ``The structure we have doesn't work in today's global industry,'' Wagoner said. ``We've made some big moves, and I think it's in everyone's interest to make some more so we can get to the position where positions can be added in the U.S. rather than always being downsized.''þþGM's stock rose more than 50 percent in 2006, but some analysts have said further gains hinge on the company's ability to sustain profitability against increasingly successful competitors in a weak U.S. auto market.þþAlthough GM still sells twice as many cars in the U.S. market as Toyota, it will likely be overtaken by the Japanese automaker for the global top spot in terms of production in 2007, according to analysts.þþToyota has said it will produce 9.42 million vehicles this year; GM has not provided a forecast.þþ``Obviously, we have capacity to build more,'' Wagoner said. ''I like being No. 1 and our people take pride in it ... we are not going to sit by and let other people pass us by.''þþBut a cornerstone of GM's strategy in 2006 was to avoid steep discounts to drive sales at the expense of profitability, and Wagoner said that strategy remained unchanged.þþGM's U.S. market share dipped to 24 percent in 2006, a historic low and well below the 45 percent it commanded in 1980. þþROAD TO RECOVERYþþAsked about a timeline for GM's North American operations to return to profitability, Wagoner declined to comment specifically.þþ``We don't just need to get profitable, we need to get in a position where we are generating significant cash flow because we put a lot of cash back in the business,'' he said. ``This year is going to be a huge positive step in the right direction, but we've got a lot more steps to get not just profitable but to get cash flow positive.''þþGM increased its average sales price in 2006, mainly by lowering incentives -- a trend Wagoner expects to continue this year. GM's average vehicle sales price was $1,000 above the industry average in December.þþWagoner also said he expects GM to continue to expand overseas, with the strongest growth in China, India, South Africa and South American markets. He said he expected overseas sales to continue to surpass domestic sales, which first occurred in 2005.þþWagoner did not rule out the possibility of considering China as an export platform for the U.S. market, but he said GM has no specific plans for that. He also said he thinks it will be three to five years before a Chinese vehicle is ready for the U.S. market.þþEven as analysts expect flat to slightly lower U.S. auto sales this year, Wagoner said he was optimistic about 2007. ``We are not as negative on the U.S. economy and industry as some others are,'' he said.þþ
Source: NY Times
