GM workers face hard sell on buyouts

Sharon Terlep / The Detroit News

General Motors Corp. next week will begin enticing thousands of veteran workers to leave the company for good by dangling the promise of a fresh start and maybe even a new car.

The automaker, which badly needs to trim its ranks to help slash U.S. labor costs, says it won’t coerce workers to take the buyout offers and retirement incentives going out to its hourly work force.

But GM will try to put an upbeat spin on the daunting prospect of giving up the vaunted wages and benefits of a Big Three factory job just as Americans are feeling pinched by everything from soaring fuel prices to tanking home values.

Beginning Tuesday, the company will dispatch a slew of specialists — from retirement planners to career consultants — to factories across the country to talk to workers. The events are billed as "opportunity expos," and come with the promise of helping workers and the families "build your future and live your dream."

Anyone who attends the fairs, open only to workers and their families, will be entered into a drawing for a $15,000 voucher toward a new GM vehicle.

"It’s a personal choice," GM spokesman Dan Flores said. "We want to make sure we provide opportunities to employees and show them the ways in which they can benefit."

GM’s move comes as Ford Motor Co. struggles to get enough workers to accept buyouts and Chrysler LLC rolls out deals to more employees. The selling tactics are reminiscent of those used by Ford, which also hosted plant events to help workers understand their options.

All of GM’s hourly work force is being offered some sort of deal. The most lucrative will go to about 46,000 retirement-ready workers, who will get richer offers than GM made in 2006 when it pared 34,000 workers. Production employees will be eligible for a cash payment of $45,000 plus health benefits and skilled trades workers can take $62,500.

GM will replace veteran workers with new hires who will make $14 an hour — about half the current wage — and more modest benefits than current workers. Each of Detroit’s automakers won the ability to clear out veterans and institute a second-tier wage as part of last year’s labor deal with the United Auto Workers union. GM expects workers who take the offers to leave by July 1.

The automaker won’t say how many workers it hopes to clear out. But the urgency is clear.

First, GM opted to sweeten the deal compared to the 2006 offers, largely in response to Ford’s decision to do the same. Then, it made the package even more attractive by giving workers the option of having cash payouts rolled into a retirement or 401(k) account, a first-of-its-kind move for the auto industry. Ford eventually followed suit.

"Do they like the offers? It depends on who you talk to," said Chris "Tiny" Sherwood, president of UAW Local 652 in Lansing. "Some seem to want to try and hold out for a better offer. Some of them have signed up already."

Ford workers had until Tuesday to accept offers. The numbers are still being tallied, but a source familiar with the situation told The Detroit News this week that the automaker appears to have fallen substantially short of its target of 8,000 to 10,000 workers, and might offer targeted buyouts at certain factories or to workers in certain categories. GM is likely to have an easier time getting workers to go because its work force is significantly older than Ford’s, said David Cole, chairman of the Center for Automotive Research in Ann Arbor. The average GM hourly worker is 49 years old, with 23 years of seniority, according to data from the center. At Ford the average age is 46, with 16 years of service on average.

"When you’re looking toward a longer future," it’s a bigger roll of the dice to take a buyout," Cole said.

Chrysler LLC, meanwhile, will expand its retirement incentive and buyout programs, giving about 2,600 workers at Mopar parts distribution centers nationwide deals similar to those offered to manufacturing workers in recent months, Chrysler spokesman Ed Saenz said Thursday.

Those packages will offer eligible workers $70,000 plus health care and pension benefits to retire. Other workers can accept a $100,000 lump sum to walk away from the company.

Chrysler is also re-offering packages to retirement eligible workers — a relatively small number of workers that already have 30 years in, or otherwise meet requirements to draw a pension and receive health care benefits.

"There are some options available that may make (workers) want to reconsider," Saenz said.

The offers are all part of Chrysler’s goal to eliminate 8,500 to 10,000 union-represented employees in North America. Chrysler Vice Chairman and President Tom LaSorda said at the New York Auto Show that he is confident that the automaker will hit that mark by the end of the year.