New plant-by-plant attrition packages are in the works at GM
General Motors Corp. is negotiating a new special attrition plan for UAW
workers on a plant-by-plant basis, Chief Financial Officer Fritz
Henderson told Wall Street analysts over dinner in New York this week,
one analyst said.
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
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
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,
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.