General Motors' Workforce Reductions

General Motors had earlier offered buyouts and early retirement to its workers and reported that approximately 19,000 workers had accepted the deal by the deadline of July 1st. Most of those employees have already left the payroll. With the new losses, General Motors stated that they may be offering a new round of buyouts for hourly workers in the coming months. As the overall economy continues to struggle, though, jobless claims are on the rise. Workers may do well to consider hanging on to the jobs they've got as long as they can.

Pain at the Pump Equals Pain for Car Dealers

While month to month results may vary going forward, we would expect auto sales to remain in decline for the rest of this year and substantially all of 2009. For the time being, the automakers are at the mercy of the broader US economy. Automakers are desperately trying to lower their inventories of SUVs and gas-guzzling trucks as these vehicles look to be the hardest hit by soaring gasoline prices. Once again fuel economy is a key concern for American consumers when searching for a new car.
General Motors' North American sales the most recent quarter were off by 20% or about $10 billion. Outside of North America, however, General Motors sales showed an increase of $1.7 billion.

General Motors Stock Outlook

In addition to this news, remember that GM announced the suspension of its dividend on July 15th in order to preserve liquidity and increase available cash. As long as fewer Americans are taking a ride in a new General Motors car, the stock looks to continue its own ride downhill. Coming off 52 week highs of over $44/ share, General Motors traded under $10/ share on Monday.