GM preps for new hires after buyouts

Idled GM, Delphi employees to get first crack at jobs left by veterans.

Sharon Terlep / The Detroit News

General Motors Corp. on Monday launches one of the biggest and most crucial logistical operations in its history.

That’s when the automaker begins hiring new workers in preparation for a mass exodus following the latest round of hourly buyouts.

Some 19,000 GM hourly employees are leaving as part of the labor deal GM negotiated with the United Auto Workers last year that allows the company to replace departing workers with lower-paid new hires. Most are slated to leave July 1.

GM has been flooded with job seekers at many plants, but first crack at the jobs goes to idled employees of GM and Delphi Corp., the automaker’s bankrupt former parts unit.

The jobs then open up to outsiders, whose only shot at landing one is to be referred by someone who works at a factory.

The biggest challenge for GM may be accomplishing the massive undertaking without compromising the quality of its cars and trucks. Having begun to win new respectability on the quality front, the automaker can’t afford costly and reputation-marring mistakes on the factory floor, which is a risk when there is significant turnover.

"We are very intensely focused on making sure our quality isn’t compromised," said Joe Mazzeo, GM’s executive director of manufacturing quality. "Our customers don’t know this is going on, and they don’t care."

GM goes into a two-week summer shutdown at the start of July, which means new workers must be trained, or existing ones retrained, by mid-July.

The automaker won’t say how many of the 19,000 jobs will be replaced. Some slots are being eliminated as the company downsizes to meet declining demand for its cars and trucks.

About 4,000 jobs will be cut this year as GM slashes production of slow-selling pickups and SUVs. Additional jobs being eliminated under GM’s newly announced plans to shutter four factories aren’t in play since only one factory, in Janesville, Wis., is represented by the UAW, and it’s not slated to close until the end of 2010.

Wages halved for some jobs

Unlike in 2006, when 34,000 hourly workers took buyout offers, the goal in the latest buyouts wasn’t to dramatically shrink the work force, but to make way for a second-tier of lower-paid autoworkers.

So even though fewer workers are leaving than in 2006, more are coming in.

GM’s deal with the UAW allows the automaker to pay new hires about half the $28-an-hour wage earned by veterans to do jobs that are considered not central to building a vehicle.

New workers will undergo two weeks of training before hitting the factory floor, Mazzeo said. Employees transitioning into a new job get one week of training.

GM is going to exhaustive lengths to ensure the shift doesn’t erase hard-won improvements in factory efficiency and vehicle quality. GM, according to separate studies released this week, is improving on both counts, though it hasn’t caught up with Asian rivals such as Toyota Motor Corp.

GM posted some big improvements in J.D. Power and Associates’ closely-watched survey of initial vehicle quality, while the Harbour Report North America said the automaker is reducing the number of average labor hours required to build each car and truck.

Workers will hear about those studies as part of their orientations. They’ll be reminded that well-made vehicles keep consumers buying, which in turn leads to job security — and vice versa.

Many workers will get a job shadowing assignment, and all of them will learn through simulated training done on assembly lines with fake cars made of two-by-fours and plywood.

Quality checks to intensity

Also, in an unusual step, GM will carry out quality checks of every vehicle headed off the factory floor during the initial transition. Typically, vehicles are picked at random for the checks.

"That product is going to be just as good with these new hires as it is with the current guys," said Pat Sweeney, President of Local 5960 representing workers at GM’s Orion assembly plant. Jobs at that factory, which builds the remade Chevrolet Malibu along with the Pontiac G6, are coveted in part because GM announced plans to add a third-shift to keep up with strong demand for the cars.

"Anyone would be happy to be one of the new guys — there’s nothing else out there," he said.

Complications abound when it comes to logistics.

Hordes of workers, for example, want to work at the Bowling Green, Ky., factory where GM builds Chevrolet Corvettes. Harder to come by are takers for a job in Pontiac, where GM is cutting.

Refilling the jobs with lower paid new hires is going to take longer than initially expected because GM has been forced to lay off so many veterans, who have first preference at job openings.

GM, however, had far more takers for its buyout program, and will need more new workers.

The UAW and GM have in place a detailed process for filling openings. Seniority wins workers plumb assignments, and employees who are in GM’s so-called jobs bank for laid off workers would get an opening before a new hire.

GM’s experience with the 2006 buyouts will be helpful this time around, said Greg Gardner, an analyst with the Oliver Wyman Group, a manufacturing consultant that publishes the Harbour Report. At the time, GM had to hire a wave of temporary workers because more employees than expected left the company. Productivity and quality didn’t suffer then, he said. Also a plus: manufacturing systems that are uniform around the globe make it easier for workers to move from one plant to another.

"If they provide the right level of training," Gardner said, "they can maintain the quality."