David Schepp BBC News Online's North America Business Reporter

General Motors (GM) has said it plans to offer 5,000 salaried workers incentives to retire early.

The news comes on the heels of rumours of massive layoffs at its main rival, Ford.

GM has ended 0% financing for rebates instead

The total is one-quarter the number of jobs some believe Ford Motor will announce on Friday it is cutting, when it hosts a meeting with analysts at its headquarters in Dearborn, Michigan.

A GM spokesman, speaking at the North American International Auto Show, currently in media preview in Detroit, said the job buy-outs are the latest effort by the world's largest auto maker to cut costs.

Detroit-based GM is due to make an official announcement to employees on Wednesday about the cutbacks.

Confirming rumours

Lutz: "[Concept cars] should never leave the realm of understandable possibility"

GM, which employs about 350,000 workers around the world, is the only domestic car producer expected to announce that it turned in a profit in 2001, despite near record sales of cars and trucks in the US last year.

The threat of job losses have hung over the Detroit auto show, being held in massive Cobo Centre, since before its start last weekend.

Stepped-up security measures are in place during the show, which is playing host to executives from every major car manufacturer in the world.

Upbeat auto maker

GM's job cuts are the one dim spot in what has otherwise been viewed as a positive showing by the auto maker.

GM has softened the Pontiac Aztec after poor sales

On Sunday, GM unveiled three new concept vehicles in addition to three cars that have gone from show-only to production. The response to the vehicles was largely positive.

With the warm reception and the quality of vehicles making gains among those who scrutinise such things, GM seems to be on a roll.

The auto maker boosted sales to near record levels by offering zero-percent financing on most of its cars and trucks, following the attacks on New York and Washington.

Revising incentives

While such deals have since been discontinued, GM has again taken the lead by instead offering $2,002 rebates on many models, while no interest loans cost auto makers an average $2,500 per car.

Pedestrian offerings, such as the Buick Century, are GM's bread and butter

Analysts say it is another masterful stroke by GM, in part because it reduces the amount the auto maker spends in getting customers into its showrooms and cars.

Adding to GM's success have been well-received recently launched vehicles, such as the Chevrolet Trail Blazer and GMC Envoy sport-utility vehicles (SUVs).

Nevertheless, GM faces tough challenges ahead. With many of its product offerings aging fast, the auto maker must remain vigilant about bringing cars and trucks from concept to production quickly.

It is a point not lost on Robert Lutz, the head of design at GM, who also holds the title of chairman of North American operations.

It announcing its latest concept vehicle on Sunday, the Pontiac Solstice, Mr Lutz was quick to point out the Solstice went from vision to functional show car in a matter of weeks.