GM hourly workers face layoffs

Tuesday, August 4, 2009

GM hourly workers face layoffs

Robert Snell / The Detroit News

General Motors Co. may lay off hourly workers this year because about 6,000 employees accepted its most-recent buyout and early retirement offers, which was fewer than targeted.

That’s about 7,500 fewer workers than officials want to cut this year as part of a court-ordered restructuring, according to the automaker.

GM has said it wants to eliminate 21,000 jobs this year but so far about 13,000 have accepted buyouts and early retirements.

The total, announced Monday, helps GM cut hourly costs, close the gap in pay with foreign automakers that build vehicles domestically and could clear the way for GM to eventually hire lower-paid workers. Since 2006, about 66,000 U.S. hourly workers have accepted buyouts and early retirements.

GM emerged from bankruptcy court July 10 after a dramatic restructuring and $50 billion in federal aid but said in a viability plan filed with the U.S. government that it needs to cut its work force further.

The 21,000 figure may need to be revised depending on whether vehicle sales improve this year and if some of the 13,000 retirement-eligible United Auto Workers members retire. And workers at closed facilities could eventually take jobs at other plants.

"But even if they can start building again, GM needs turnover to get lower-cost employees in there to be competitive with the Japanese who are building here," said auto analyst Aaron Bragman of IHS Global Insight.

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.

About 40 percent of those UAW members who accepted the most recent offers were skilled trade employees and 35 percent accepted buyouts by the July 24 deadline.

"We are pleased with the number of eligible employees who participated in the attrition program," Diana Tremblay, GM’s vice president of labor relations, said in a statement. "One of the very tough, but necessary actions to position the company for long-term viability and success is to reduce our total U.S. work force, both hourly and salaried employees."

The offers were open to most of GM’s 54,000 hourly workers. The retirement offers included $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.

It was the second round of buyout and early retirement offers this year. GM wants to end the year with about 40,500 blue-collar workers.

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, analysts have said.

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.

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