GM salaried staff, execs get details on early-out offers

Tuesday, June 23, 2009

GM salaried staff, execs get details on early-out offers

Robert Snell / The Detroit News

General Motors Corp. started providing details to salaried and executive employees Tuesday about severance and early-retirement offers that will result in about 4,000 job cuts by Oct. 1.

The cuts are part of GM’s broad restructuring while in bankruptcy court and will slash salaried ranks 20 percent and executive employees almost 35 percent. Involuntary job cuts are expected, though GM is seeking volunteers, the automaker said.

The automaker already has cut about 3,400 salaried jobs this year. With the new cuts, GM will have eliminated more than 6,000 white-collar jobs by the end of this year. GM started this year with 29,650 white-collar workers and wants to have 23,500 at the end of 2009, GM spokesman Tom Wilkinson said.

Workers have two options: They can take a severance package that gives salaried workers up to six months pay and benefits, while executive employees can qualify for up to a year’s worth. The other option is an early-retirement incentive that, for example, lets workers retire at age 58 with benefits they otherwise would have received at age 62.

Many of the targeted employees are tied to plants scheduled for closure in coming months or brands being sold or phased out, Wilkinson said.

"The ideal goal is to reshape the staff to support the new company," Wilkinson said.

The automaker filed for court protection June 1 under section 363(b) of the U.S. Bankruptcy Code. As part of the bankruptcy process, the Treasury Department plans to buy the automaker’s "good assets" and provide GM with an additional $30.1 billion to operate while in bankruptcy.

That would boost the government’s total investment in GM to $50.5 billion.

The U.S. government will own 60.8 percent of GM while the Canadian government will own 11.7 percent and a United Auto Workers health-care trust will receive a 17.5 percent stake.

Unsecured creditors, meanwhile, get 10 percent.

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