GM buyout offers falls short, layoffs loom

August 3, 2009 8:20:59 AM PDT
About 6,000 General Motors Co. blue-collar workers have taken the latest round of early retirement and buyout offers, but it fell short of the company's goal, meaning more layoffs are likely. GM has about 54,000 factory workers and wants to end the year with 40,500, a cut of about 13,500. That means that about 7,500 too few workers took the offers, setting the stage for more layoffs.

The automaker announced in June and July that it would close 15 U.S. factories employing about 22,000 workers by end of 2012.

Spokeswoman Sherrie Childers-Arb said the number of layoffs has yet to be determined because some workers at closed factories could take open jobs at other factories.

One of the closed factories in Michigan will be reopened to make a new subcompact car, while two others in Spring Hill, Tenn., and Janesville, Wis.., will close and be on "standby" in case sales rise and GM needs to reopen them.

GM said in a statement that most of the workers officially left the company's employment on Saturday.

Sixty-five percent of the workers took early retirement packages, while 35 percent took buyouts, the company said. About 40 percent of the 6,000 were skilled trades workers, with the remainder coming from the production work force.

Diana Tremblay, vice president of labor relations, said in the statement that the reductions are needed to position GM for long-term viability.

"Results of this special attrition program will help GM lower its employment cost and close the competitive gap" with Japanese automakers that have U.S. factories, she said.

She called the acceptance rate a success, given that it was the second round of offers this year. In March, about 7,000 workers took a previous round of early retirement or buyout offers.

By the end of the year, GM's hourly work force will be less than one-tenth of what it was at its peak of 468,000 in 1979. About 66,000 U.S. hourly workers have left GM under buyouts or early retirements since 2006.

GM emerged from bankruptcy protection on July 10 and has received $50 billion in aid from the U.S. government. The company has lost more than $80 billion in the past four years.

The automaker hopes that the plant closures will let it run its remaining factories at close to full capacity, which is far more cost-effective.

All U.S. hourly workers represented by the United Auto Workers were offered packages to leave the company.

Production workers were offered $20,000 plus a $25,000 car voucher for early retirement, while skilled trades workers were offered $45,000 plus the voucher.

Workers with 20 or more years of service were offered buyout packages of $115,000 and the car voucher. Those with less than 10 years would get $45,000 and the car voucher to leave GM outright.

In the past, laid-off workers went into the "jobs bank" which allowed them to collect most of their pay indefinitely even if their plants had been closed.

But the UAW earlier this year gave up the benefit in concession talks with GM, Chrysler Group LLC and Ford Motor Co.

Now workers will get state unemployment benefits and supplemental pay that equals most of their base pay for at least a year. But if they turn down an offer to work at another plant, their pay and benefits go away.

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