General Motors announced on Thursday that 7,631 of its United Auto Worker employees have accepted the company’s offer for early retirement and buyout packages. That figure represents about 12 percent of the automaker’s hourly workforce.
Although not all 7,631 employees will be replaced, many of the vacant spots will be filled by new hires for about $14 per hour – roughly half of what GM currently pays its UAW employees. The pay reduction should help GM with its turnaround plan.
“This is a significant milestone of progress towards our restructuring plan,” GM Spokesman Tony Sapienza told The Detroit News. “There is more work to do, but this will help us become leaner and stronger.”
Not surprisingly, GM’s Janesville, Wisconsin truck plant saw the most takers, with 624 workers accepting GM’s buyout plan. The Janesville plant is scheduled to be shutdown in 2010.
GM extended its buyout offer to all 62,000 of its hourly workers. Of the 7,631 takers, 53 percent were from factories in Michigan.
03/26, 5:25 PM
posted by:
carstuff
This is a huge savings. At $50/hour (wage plus beni’s) that is almost $1 BILLION in cost savings in one year.
When GM has to to hire again it will be at less than $25/hour (wage plus beni’s) which is a total net savings of almost $1/2 billion /year.
And because GM has such an old work force there will be many more retirements coming in the next 5 years. Since the new hire wage is so much lower than the competitors GM will become the low cost producer here in the states.
03/26, 7:28 PM
posted by:
fan
so at least their returning the almost wasted tax-money to at least SOME of the taxpayers…
03/26, 9:19 PM
posted by:
Borat
If only they could loose some managers with 7 digit salaries and start anew that would be great. Those 7631 are brightest GM had. Since management which collects salary missed March deadline, they are on the verge of real Ch 11.
03/26, 10:36 PM
posted by:
carstuff
There will be no chapter 11 or any other bankruptcy. The government will not allow it.
03/26, 10:44 PM
posted by:
idrinorbarsaku
borat,
if only! we just bought a new ford and feel happy to support someone who runs their company better
03/26, 11:09 PM
posted by:
johnnycanuck
At least it was voluntary. I enjoy seeing a little pink as much as the next guy except when it’s a slip.
03/27, 9:52 AM
posted by:
parts guy
Your Comment
03/27, 9:53 AM
posted by:
parts guy
I totally agree Johnny!
03/27, 11:09 AM
posted by:
carstuff
Borat, bondholders are not first in line. They are unsecured creditors and are ahead of the stockholders but behind the secured creditors.
And in this case the government loans are in FRONT of the bondholders if they are forced into bankruptcy.
“If federal officials fail to get a consensual agreement to change their position regarding repayment, they have the option to force the companies into bankruptcy as a condition of more bailout aid. The government would finance the bankruptcy with a so-called “debtor in possession” or DIP loan, a lender status that gives the U.S. priority over other creditors, said Don Workman, a partner at Baker & Hostetler LLP.
Workman, who isn’t involved in the negotiations, said the U.S. couldn’t force its loans to supersede existing secured lenders, so it built in a measure that allowed the debt to be converted to debtor-in-possession financing.
“A carrot and stick approach is spot on,” he said. “
03/27, 11:38 AM
posted by:
RaineMan
Well… GM officially has both feet in the grave. Now they just need to lie down.
03/27, 12:19 PM
posted by:
fan
you mean the need to get laid?
03/27, 12:51 PM
posted by:
Borat
I think RM means to close coffin lid and STFU (especially Putz). I could be misinterpreting.
03/27, 12:56 PM
posted by:
jackjimturkey
Something had to be done.
GM can’t afford its current labor cost structure
03/27, 9:17 PM
posted by:
RaineMan
Borat… that’s pretty much what I was getting at.
03/28, 1:46 PM
posted by:
Borat
@RaineMan
@JJT, and can we afford MotherLoving GM?