General Motors to cut 20% of marketing staff

NEW YORK - General Motors is cutting 20% of its marketing and communications staff, according to a report.

The cuts to marketing come as part of a wider cull of 1,600 office staff.

The 20% cut could mean as many as 45 will go at GM from its 220 marketing department in Detroit.

The cuts come as GM and rival Chrysler are to get more loans from the US treasury as the two car firms struggle to beat bankruptcy.

GM is to receive a further 60-day, $5bn loan while Chrysler is to get $500m.

This comes on top of the combined $17.4bn in US government aid the car industry has received since December.

As part of the loads the government has asked to see viable restructuring plans by June before any more aid and job cuts, selling off unprofitable divisions, are likely to play a key part of that.

Both companies' restructuring plans were rejected at the end of March.

This latest funding will bridge the gap until they have to present new reorganisation plans.

GM is selling off its struggling Hummer brand and is thought to be close to finding a buyer for the 4x4 unit, which has suffered a major sales drop in the current recession.

Reuters recently reported that three unidentified bidders remain in the race for GM's Hummer brand with offers ranging from $100m to $200m in cash, in addition to other commitments.

While the bidders are not identified none are thought to be automakers and only one is American.

In February GM was also reported to be ready to sell stakes in its UK car brand Vauxhall as well as holding talks about its Buick band.

China's third-largest automaker, the Shanghai Automotive Industry Corporation, has been linked to Buick, which is valued at around $1b.

However, it is unclear whether GM is serious shopping the Buick brand around and some auto sites have poured cold water on stories suggesting that Buick could be sold.

In the plan GM submitted to the US government in February it said it planned to hold onto Buick to develop its reputation in China, where the brand is popular, suggesting it could be about to enter a joint venture.

Chrysler, which has already received about $4bn in government loans, has until 30 April to make more cuts and find a financial partner with Fiat still in the frame for that position. Although the Italian car firm has said it will walk away from a deal if unions do not give ground.