New plant-by-plant attrition packages are in the works at GM
GM and UAW officials would not discuss details Friday, but a local union leader concurred that the automaker is negotiating buyouts and early-retirement offers at individual locations.
"Attrition remains critical to GM being able to take advantage of the new two-tier wage rates and to achieve near-term reductions in structural costs," Lehman Brothers auto analyst Brian Johnson wrote in a note to investors Friday.
GM negotiated a two-tier wage system with the UAW in its new 4-year contract. The system allows GM to pay new hires into noncore jobs -- generally defined as those jobs not directly involved in vehicle assembly -- about half the hourly rate of current employees and provide a slimmer benefits package.
For GM to enjoy the benefits of the new structure, it must entice workers now in those jobs to leave so it can replace them with lower-paid hires.
Henderson told analysts Friday in New York City that he expects GM to be able to provide greater clarity "on the pace and scope of structural cost reductions," which Johnson said he took to mean the attrition plan rollout, by the time of the North American International Auto Show in Detroit in mid-January.
On Friday, GM said only that the automaker is committed to working with the UAW to implement the new national contract and continues to talk with the union.
"General Motors and the UAW are discussing a special attrition program but nothing is finalized," said GM spokesman Dan Flores. "It would be inappropriate to speculate on the details, timing or outcome of those discussions."
A UAW international spokesman declined to comment. But George McGregor, president of UAW local 22 representing GM's Detroit-Hamtramck Assembly Plant, confirmed that GM and the UAW are "trying to get it done now, plant-by-plant."
McGregor said his local wants to negotiate the attrition plan before a scheduled layoff of 767 Detroit-Hamtramck workers Jan. 2.
The union and automaker are negotiating to determine which workers will be eligible for the special attrition program and how many attrition packages will be made available at each plant, he said.
Some analysts have expressed concern that GM could have difficulty getting people to take the voluntary special attrition packages, since the company offered an attrition plan in 2005 that was completed in January. GM reduced its workforce by 34,410 in that program.
Several thousand workers who weren't eligible to retire or to take the early-retirement incentive then, however, are now eligible. Since this summer, the number of hourly workers with 30 or more years on the job has grown from about 17,000 to about 23,000.
Johnson forecasts that 11,000 people will take the offers in 2008 with a total of 25,000 current workers leaving by 2011, for a total of $1.6 billion in expected labor-cost savings.