Posted on: Monday, March 29, 2004

GM will outsource more white-collar work

By Ed Garsten
Detroit News

DETROIT — General Motors Corp.'s manufacturing arm plans to sharply increase the amount of white-collar work it sends outside the United States this year as part of an overall effort to reduce costs, according to an internal report obtained by The Detroit News.

Moving jobs to other nations where labor is cheaper — known as offshoring or outsourcing — has become a white-hot political issue in this presidential election year with the United States continuing to lose high-paying manufacturing jobs because of rising productivity and growing pressure to cut costs.

"In 2003, we began offshoring activities moving $3.5 (million) of work to lower-cost locations," the GM report says. "And we are planning to increase that to $48 (million) in 2004."

The latest spending plan represents less than 1 percent of GM's global manufacturing budget, but the move highlights that GM is succumbing to increasing pressure to trim spending — even if it risks antagonizing the automaker's union and salaried workforce.

The report, titled "2003 Vehicle Operations," is an annual review of GM's manufacturing organization by Gerald Elson, GM vice president and general manager of vehicle operations.

In it, Elson also lays out several other cost-cutting targets. They include reducing total overtime by 15 percent, slashing energy and water use, and buying more robots for manufacturing plants from a variety of sources worldwide, resulting in an expected 42 percent reduction in costs.

The outsourced white-collar work has gone primarily to Canada with a small amount to India, about $200,000 last year, GM said. A good portion of the work also will go to Canada in 2004, with slightly more going to India.