If you thought quality was iffy before wait until the lower pay workers
GM aims to cut 21,000 workers
Buyout deadline was Friday; results expected next week
Robert Snell / The Detroit News
Hourly workers faced a deadline Friday to accept buyout and early
retirement offers from General Motors Co. that could help the automaker
thin its work force, cut labor costs and clear the way for hiring
It was unclear how many accepted deals open to most of GM's 54,000
hourly workers. Results are expected Monday or Tuesday, GM spokeswoman
Sherrie Childers Arb said.
Accepting a buyout is still risky, particularly in Michigan, where
workers face a difficult time finding other jobs or selling their homes
so they can seek employment in another state.
And though GM emerged from bankruptcy court July 10 after a dramatic
restructuring and $50 billion in federal aid, job security is still
tenuous, said auto analyst Aaron Bragman of IHS Global Insight
"The conditions haven't changed at all," he said.
"GM may be out of bankruptcy, but they're not out of the woods. There
are still a lot of risks associated with staying.
"If conditions don't improve, GM will be back in bankruptcy (court) and
liquidating. The bankruptcy is over, but the crisis is not."
The retirement offers include $20,000 cash and a $25,000 vehicle
voucher. Workers with more than 20 years are eligible for $115,000 in
cash and a $25,000 voucher to quit early.
Overall, GM said it needs to cut its hourly work force by 21,000 jobs by
the end of the year.
GM also is slashing salaried ranks by 20 percent and executive employees
by almost 35 percent as part of broad restructuring moves.
GM started the year with 29,650 white-collar workers and wants to have
23,500 at the end of the year.
"All automakers need to get people out the door," Bragman said.
"It's not a matter of reducing headcount, it's turnover."
In the 2007 labor agreements with Detroit's Big Three, the UAW agreed to
slash starting wages and benefits for newly hired workers to $14 an hour.
"To take full advantage of the cost benefits of making small cars
profitably in the U.S., they need that turnover," Bragman said. "The
sooner they can get these people out the door, the better it will be for
their bottom line and health."