GM to Lay Off 20% of Marketing Staff

Move Comes as Automaker Looks to Beat Restructuring Deadline

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DETROIT (AdAge.com) -- General Motors Corp. is laying off 20% of its marketing and communications staff, according to a spokeswoman, as part of its trimming 1,600 white-collar jobs. While the company would not disclose the size of its marketing department or the scope of the layoffs, according to one estimate, the department employs 220 people, indicating about 45 posts will be lost.

The move comes as GM struggles to meet the federal government's June 1 deadline for it to restructure or face bankruptcy court.

Meanwhile, the other U.S. automaker trying to escape bankruptcy, Chrysler, was dealt a potential blow by the disclosure that its potential white knight, Italy's Fiat, today reported a loss for the first quarter of 2009. Fiat's revenue fell 25% to $8.4 billion, and revenue for the conglomerate's global auto operations dropped 18% vs. a year ago.

The company, however, said it expects to post a profit for the entire year. The Obama administration has given Chrysler a deadline of April 30 to finalize a marriage with Fiat to qualify for another federal loan or face bankruptcy court.

The red ink gives Fiat more ammunition for its case not to invest cash in Chrysler, said Lincoln Merrihew, senior VP of TNS Automotive. Fiat is offering to share its small-vehicle know-how and technology with Chrysler, Jeep and Dodge, but the number of models may be trimmed as a result of the loss, he said. But Fiat's first-quarter stumble "isn't surprising given that the global auto industry is in a sinkhole," Mr. Merrihew said.

Speculation is also swirling that Fiat is interested in a major stake in GM's European Opel brand. While a spokesman for GM Europe said the automaker has approached several investors about Opel, he would not identify them, Ad Age sibling Automotive News reported. Mr. Merrihew said should Fiat manage to gain a majority of Opel, Chrysler could end up with an Opel-based car originally intended for GM's Saturn brand, which already sells Opel-based cars in the U.S.

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