Although General Motors’ latest viability plan wasn’t quite thorough enough to earn a stamp of approval from the Obama administration, GM’s plan outlined more than $1 billion in labor savings this year. Moreover, the plan promises to save GM even more in the subsequent years.
According to The Detroit News, the 17-page plan projects the automaker will pay out $6.5 billion in hourly employee costs this year. That represents more than a billion dollars in savings over last year’s $7.6 billion hourly employee costs, and a significant savings over the $18.4 billion paid out in 2003. Additionally, GM says it can bring that figure down to just $4.8 billion by 2012.
Much of that savings can be attributed to recent concessions by the UAW. Per a new labor agreement, GM can make new hires at roughly half the hourly wages of current UAW workers. More than 7,600 UAW workers recently took buyout or retirement packages — about 1,000 more than GM expected.
GM also revealed that it has requested $10.3 billion of the Energy Department’s $25 billion set aside for the production of more fuel efficient vehicles. However, since President Obama rejected GM’s viability plan on Monday, it remains unclear if the Energy Department will be able to move forward with those loans.
