General Motors late this afternoon officially announced that approximately 35,000 hourly employees (33,800 UAW-represented and 1,200 IUE-CWA-represented) have agreed to participate in early retirement programs. GM announced the program late last year in an effort to drastically reduce its workforce. Today’s official figure represents roughly a third of GM’s workforce and do not include workers who will leave former subsidiary Delphi. Coupled with the hourly workforce reduction of 6,500 in 2005 and estimated replacements, including Delphi flowbacks, GM expects to reach its target of reducing 30,000 manufacturing jobs by Jan. 1, 2007, about two years ahead of the previously announced schedule.
“Over the past several months, we have accomplished a great deal in our strategy to reshape GM into a company that is more nimble, more global and built for long-term success,” said GM Chairman and Chief Executive Officer Rick Wagoner. “These moves have given us a fast start toward achieving our stated objective of reducing GM’s global structural cost from approximately 34 percent of revenue in 2005, to 25 percent of revenue by 2010, and setting us up to be successful for years to come.”
In the last year, GM has been aggressively implementing its North American turnaround plan. Some of the major actions taken include the health-care agreement with the UAW and the IUE-CWA; the manufacturing capacity plan; changes to U.S. salaried health-care and pension plans; a complete overhaul of GM’s marketing strategy; and accelerated launches of key new product entries and technologies.
The accelerated attrition program was announced in March and offered to 109,000 UAW-represented hourly employees and 3,800 IUE-CWA-represented employees at GM’s manufacturing operations in the United States . The program ended at midnight June 23. Employees who signed up that day have seven days after signing up (no later than midnight June 30) to opt out of their retirement or buyout.
Based on preliminary numbers, approximately 4,600 of the participating employees accepted buyouts and approximately 30,400 chose to retire. It is expected that most will retire or leave the company by the end of the year. These numbers do not include Delphi employees who are participating in similar attrition programs.
In addition, the JOBS Bank will be substantially reduced as employees from the Bank retire, take a buy-out or fill openings created by the attrition program. These moves will be coordinated by GM and the UAW, working through national and local agreements.
As a result of the success of the accelerated attrition program, GM is again increasing its targeted reduction in structural costs in North America to at least $8 billion from $7 billion on an annual running rate basis by the end of 2006.
Approximately $5 billion in savings is expected to be realized in 2006. The additional cost reduction of at least $1 billion, largely cash savings, will bring expected total annual cash savings from structural cost reductions to $5 billion.
Structural costs, such as the cost of unionized employees, are those operating costs that do not vary with production and include all costs other than material, freight, and policy and warranty costs.
GM expects to take a netafter-tax charge currently estimated in the range of $3.8 billion related to the attrition program, primarily for payments to employees and for the effect of the re-measurement of both GM’s U.S. pension liabilities and other post-employment benefits (OPEB) liabilities. This charge includes a revision of the accrual taken in the fourth quarter of 2005 for the North American plant capacity actions.
The amount of this charge is subject to further review based on such factors as the demographics of the employees accepting the retirement offer. Most of the above-noted charge will be included in second-quarter financial results. GM will provide final estimates and additional financial details when it releases second quarter results next month.
The attrition program also represents another step in reaching a consensual agreement with Delphi , the UAW and the IUE-CWA in connection with the Delphi restructuring.
Wagoner recognized UAW leadership’s role in the success of this attrition program. “We appreciate the UAW’s steady support in working with us as we make the necessary moves to restructure GM North America for long-term success,” he said.
Wagoner also thanked the IUE-CWA and GM’s other unions for their support. He noted: “By working together with our unions, we can come to solutions to challenging issues that are fair to both our employees and other important constituents.”
He also recognized GM employees’ role in the turnaround efforts.
“Consideration of the attrition program was an important decision for every worker and his or her family,” Wagoner said. “For those employees who chose to retire from or leave the company, I want to thank them for their contributions over the years. For those who decided to stay, I look forward to their continued commitment to building great cars and trucks.”
Detailed plans are in place to ensure a smooth transition in GM manufacturing plants. Employees who chose to leave the company will retire or leave no later than Jan. 1, 2007 . GM will use temporary employees as necessary while permanent replacements are put in place . All temporary, relocated, and Delphi flow-back workers will receive extensive training to maintain GM’s safety leadership and strong quality performance.
“I have said before that our goal in restructuring the company is not just to change GM’s bottom line from red to black,” Wagoner said. “Our goal is to structure GM for sustained profitability and growth … to set us up to be successful for years to come in an ever-more competitive global auto industry.
06/26, 9:41 PM
posted by:
Bryan Detty
YAY!!! For buyouts, Not that it is great news for GM but I needed 500 or so at my plant to save my job. At Moraine Assembly we had 1136 production to take the buyout. [url]http://iue798.com/final_numbers_at_deadline.htm[/url]
06/26, 10:18 PM
posted by:
Learn2Play
Dumbestics need to Learn 2 Play
06/26, 10:24 PM
posted by:
300k mile trep
why cant GM do what everyone wants them to do and and just die?
06/26, 10:58 PM
posted by:
E M
Hopefully, they’ll rebound, and they’ll get smart & find a way to hire back through a contract/leasing company next time. Lower hourly cost prolly, but no legacy cost. OR…have non-union Tier 1 or 2 cos to assemble modules using the same method…
Someone needs to stand up to the Unions…they are no longer needed with all the 2-bit lawyers running around looking to sue employers who misbehave.!
06/27, 12:18 AM
posted by:
300k mile trep
arguing on the net is like running the special olimpics, even if you win, your still retarded
06/27, 12:20 AM
posted by:
fat_lazy_union_worker
And this is exactly why I will never buy a POS GM car. With so many “workers” eager to “retire” with say $140k…makes you wonder the quality/workmanship they must have put into building those POS’s.$140? That’s peanuts after taxes. Those same fat ass americans will blow that money on lotto tickets, booz, and crap made in china sold at walmart in a few months….
—-
“Workers with 10 or more years are eligible for $140,000 to sever ties to the bankrupt company. Workers with fewer than 10 years are eligible for $70,000. And those hired under a supplemental new hire agreement before March 22 can take a $40,000 buyout.”
06/27, 2:52 AM
posted by:
300C Driver
#7 but I’m retarded to start with. How does that work?
06/27, 3:00 AM
posted by:
UAWankers
Wonder how many blow the cash on a BMW or Mercedes or Audi? LOl Lol
06/27, 8:20 AM
posted by:
Anonymous
$140,000.00 or ZERO after you are laid off.
Hmmm…hard choice.
06/27, 8:32 AM
posted by:
Anonymous
…..when even the rats leave the ship. [in this case the rats are the good guys.]
j i m
06/27, 8:49 AM
posted by:
blah blah blah blah
#10: Actually most people won’t be able buy a “nice” BMW,Mercedes,Audi with the severance package anyway. Let’s put this in perspective. The lads that will get the $40k take home…Well, that won’t go very far. Figure after federal/state/local/social security taxes, what they will see is really closer to be $20k. No BMW/Mer/Audi.
Workers that get the $70,000 severance, will receive after federal/state/social security/disability taxes approximately $30,000-$45,000. Also factor in most of these people it will take about 6 months to find a comparable job with comparable benefits. They might be able to find a hourly job, but good luck finding the cushy health care benefits that GM use to offer. The average GM worker between 30-40 would mostly likely sorta out of shape and in not so good health and be rated as a “standard” when it comes to insurance’s rating of “selected preferred”, “preferred”, “standard” rating. So tag on expenses for health insurance. Then there’s the folks that will get the $140k compensation. Well, that puts them into a high tax bracket for that year. So figure $70k +- after taxes. Then you figure that these people are mostly older (must have worked 10+ years), so are probably in poorer health.–> considerably more health care costs.
Then tag on expenses that the average person spends on walmart, factor in the credit card payments they folks need to make, rent, etc. They’ll be lucky to be able to buy a low end 3 series or A3 or C230….
And then you figure if they are able to purchase an Audi/Mer/BMW, the cost of maintanence. Last time I checked, Audi and Mer were dropping the free maintanence program. So go figure $100-$200 minimum for a service visit. All 3 brands also require premium fuel. So figure $3/gallon and approximately $100-$150/month on fuel alone. And that’s with a conservative mpg which is highly unlikely if you actually were to drive the Audi/Mer/BMW in such a way that isn’t like “you’re father’s oldsmobile”.
And that would require them to clean out most of their severance to do this, which would demonstrate extreme stupidity wrto financial management, since it will probably also take some time for these folks to find another job. But then again, several americans demonstrate financial stupidity on a regular basis. So anything is possible. And there is always the lease option. .Afterall, this is america. Buy now, and make minimum payments. Even if you have no money, you still have to look and act it…Why live poor when we can live in debt????
06/27, 11:29 AM
posted by:
Over paid and Loved it
3 series here I come…of course I will need a 2007 Tundra to pull it.
06/27, 11:46 AM
posted by:
Soon to be 35 and semi retired
Actually, The money will go further then you think #12.
I stand to get a little over 94 grand, split in 3rds it will be used well. Mutual fund, home, and enough to tour a couple of continents.
Not to mention the other incentive of 2 years school paid. Enough to get my masters program started.
#13 I will see your 3 series and raise you a nice used Landcruiser.
Time spent in hell hole 11 years
Blood,sweat and tears undetermined
GM footing the bill for me to go get another life…
…PRICELESS!
Everyone else can get the finger.
06/27, 2:51 PM
posted by:
Annie Lingus
So Mr. Soon to be 35 and semi retired, you took a job, took the money to buy a home and all the benefits, you built ****ty cars ****tily that brought the worlds largest automaker to its knees, and now your bragging about how you are taking them to the cleaners again. You should be Ashamed. Don’t finger me you asshole.
06/27, 3:39 PM
posted by:
87 635CSI
16: Wow, I had no idea you were 15’s boss!
06/27, 3:52 PM
posted by:
Annie Lingus
#17 No I am his wife
06/27, 6:19 PM
posted by:
Soon to be 35 and semi retired
Hmmmmmm. Well Annie Lingus, My middle finger was not directed towards you.
Gm and I had an agreement, I showed up every day for work and they paid me. Just that cut and dry. Unless you were working at Moraine assembly with me you cannot possible know anything about me or my plant.
GM brought all those problems on themselves. I did not ask them to pay me $70+ a year. Nor did I ask for the plush benefits. They offered and invited me in. So they shot themselves in the foot. Not my problem.
What you should be wondering #15 Annie is if My Official Lap Dance tour is coming to a city near you?
IM Ria’tch Bia’tch!
06/28, 12:27 AM
posted by:
someone
#15 $94k is hardly something you can retire on, let alone something you can give the middle finger on. Once you get down to reality, it will be apparent how little it stretches these days. Not to rain on your parade. But that’s reality. And unless you’re planning to get a Master’s at University of Phoenix, you might want to check out the latest tuition prices. And if you’re planning on the former, you’re better off not wasting your money.