DETROIT -(Dow Jones)- General Motors Corp. (GM) is looking to cut its U.S. salaried headcount by 15%, or around 5,000 workers, by Nov. 1 as part of a plan to cut $10 billion in annual expenses, according to sources briefed on the plan.

The auto maker previously said it was planning a 20% reduction in salaried- worker costs, including a combination of benefit reductions and job cuts.

GM hopes to convince workers to leave voluntarily by offering early retirement incentives rather than forcing layoffs. The company is expected to soon roll out offers to workers that will include both cash incentives and the chance for some to leave the company early with full pension benefits.

GM has reduced its white-collar work force 40% since 2000, down to about 32, 000 employees, as part of a massive downsizing underway for much of this decade.

In addition to job reductions, GM previously said it plans to eliminate health coverage for salaried retirees older than 65, instead adding $300 to their monthly pension payments to help cover the cost of Medicare.

The latest round of job and benefit cuts for salaried workers should save GM $ 1.5 billion, the company has said.

Despite massive jobs cuts and last year's money-saving labor deal with the United Auto Workers union, the auto maker remains mired in red ink. Its turnaround has become further imperiled by a severe downturn in the U.S. pickup truck and sport-utility vehicle market, on which Detroit's auto makers have long relied.

GM's shares, which in recent weeks have traded at their lowest levels since the mid-1950s, were down 3.87% at $11.44 midday Wednesday on the New York Stock Exchange.

The stock, which hit a low of $8.81 this month, has gained ground since the company announced on July 15 its plans to cut $10 billion in costs and raise $5 billion through asset sales and in financial markets.

The liquidity-boosting plan helped ease concerns about whether GM had enough cash to weather the downturn in U.S. sales, which are at their lowest level in about 15 years. GM, which will release its second-quarter financial report on Friday, has said it expects to report a significant loss for the period.

GM's cost-cutting moves are in line with plans at Ford Motor Co. (F) and Chrysler LLC (C.XX). Ford is in the final stages of a plan to cut 15% of its U.S. salaried workforce expenses by Aug. 1. Chrysler is eliminating 1,000 salaried jobs worldwide by Sept. 1.

In addition to job cuts, the companies have taken steps to refocus their product portfolios on small cars that consumers crave in an era of $4-per-gallon gasoline.

-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@ dowjones.com

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  07-30-08 1226ET
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