GM: 46,000 Workers Offered Buyouts
January 18, 2008

General Motors is looking to take advantage of its new contract with the United Auto Workers union by offering buyouts to 46,000 of its blue-collar employees in the U.S. – roughly two-thirds of its hourly workforce.

GM is hoping at least half of those offered the buyouts would accept them. And if GM needs to replace outgoing workers, it can do so in some cases by paying about a third less in wages and benefits than the current workers make, based on the UAW contract agreed to last fall.

GM CEO Rick Wagoner told analysts gathered in Detroit that the buyouts would save the automaker $5 billion by 2011. GM expects to reduce its structural costs to 23% of revenue by 2012 from 34% in 2005. GM had set a target of 25% by 2010.

The buyouts are similar to those offered in the past. They consist of lump-sump payments of between $35,000 to $140,000 and pension benefits.

Of the people who have been offered buyouts, about 16,000 are in “non-core” jobs, which means GM can offer new workers less compensation in accordance with the UAW contract.

Still, Wagoner warned, the current efforts may not be enough. He said further closures of assembly and parts plants might be necessary due to deteriorating economic conditions in the U.S.

Posted by Michelle Krebs at 6:20 AM under GM | Comments (2) | digg this | Seed Newsvine