UAW pushing GM for more retirement buyouts

UAW pushing GM for more retirement buyouts

By Drew Johnson – Posted May 19th 2010

The United Auto Workers union is usually fighting to keep its membership strong, but the UAW has found itself in an odd spot as General Motors announced this week that it has no plans for further retirement buyouts.

It would seem the UAW would be happy with GM’s recent announcement, but the union is pushing the Detroit automaker to consider another round of retirement buyouts. If GM doesn’t agree to more buyouts, thousands of UAW workers could be left without unemployment pay and benefits.



Prior to GM’s bankruptcy filing, laid-off UAW workers could essentially remain on the company’s payroll – receiving close to full pay and benefits — indefinitely. However, that policy changed during GM’s time under bankruptcy protection, with UAW members now only eligible for two-years of coverage. If GM doesn’t offer another round of buyouts, those laid-off workers will lose all unemployment benefits after two-years off the job.

However, GM says it doesn’t see the need for further buyouts. GM is currently paying about 5,000 laid-off workers, but that cost is far less than the amount that would be needed to buyout retirement packages. GM spent $3.8 billion in 2006 buying out 34,000 workers.

Moreover, if GM can wait out the two-year period, it will be able to hire new workers at about half the rate of current UAW pay. GM has the right to hire new workers at a lower wage, but laid-off workers have the first crack at new jobs at their normal pay rates.

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