More cuts at GM

GM is planning to cut 20 per cent of its Canadian and U-S salary budget as it adjusts to a declining market, south of the border.

The automaker will also cut truck production, suspend its dividend and borrow two to three (b) billion dollars.

G-M says the moves will raise 15 (b) billion dollars to adjust to lower U-S sales and a rapid change in consumer preference to smaller cars.

Chairman and C-E-O Rick Wagoner, who announced the cuts on Tuesday, says a large chunk of the salary cost reduction is to come from eliminating health care benefits for salaried retirees in the U-S.

Wagoner says those workers will get an increase from the company's overfunded pension fund to help compensate for Medicare and supplemental insurance.

Several thousand jobs will also be cut through normal attrition and retirements, and through early retirement and buyout offers.

Company officials say G-M could resort to involuntary layoffs but does not want to.

G-M has 40-thousand salaried employees in the U-S and Canada.

The automaker forecasts total U-S sales of 14.7 (m) million vehicles this year, down from 17 (m) million three years ago.

And in Oshawa, people are worried.

Listen to Silvana Aceto's report