Detroit-based GM said the buyouts would be offered to 5,200 of its 72,000 hourly workers and include a combination of early-retirement incentives and other programs similar to a successful buyout round announced in 2006. In that previous round, workers got as much as $140,000 for retiring early. The automaker since the beginning of 2006 has cut about 30,000 workers through buyouts and early retirements as part of its campaign to bring its costs in line with foreign rivals including Toyota Motors Corp.
GM’s new union contract allows it to replace the workers who take the buyout with new hires who will make about $14 per hour, or half of what the current workers are making. The offer also provides a glimpse of what to expect from crosstown rivals Ford Motor Co. and Chrysler LLC, which both reached concession deals of their own with the UAW after GM.
Company CEO Rick Wagoner said in a statement that GM continues “to work closely with our UAW partners to improve our competitiveness in the currently challenging U.S. market conditions. This first phase of a comprehensive attrition program, designed in conformance with the 2007 UAW national labor agreement, provides our employees with attractive options to consider.” — Lou Whiteman
See GM press release announcing the buyouts
See TheDeal.com story discussing the ramifications of the new labor contract
See earlier post about GM
