GM Buyouts Announced
Some foreboding news coming out of General Motors today. The financially troubled automaker says it still needs to cut costs despite doing better than expected last quarter. GM plans on offering buyout packages to its entire hourly workforce in the States to lower the amount of wages they pay, according to CNNMoney.com.
If the buyout rounds are not sufficient enough to satisfy GM Chairman and CEO Rick Wagoner, layoffs and contract renegotiations might not be completely out of the question. The buyouts are considered by the financial news site as being "generous," with employees in service for more than 10 years eligible to receive $140,000 up front to sever all ties with the automaker.
Those with less than 10 years are eligible for a $70,000 payment for giving up all rights to retirement and healthcare claims. 46,000 hourly employees are eligible for retirement, and are being offered between $45,000 and $62,500 to retire. Early retirement is also being offered.
The move is not entirely unexpected. GM negotiated to allow the buyouts in their contract talks with union leaders from the United Auto Workers last year. GM used buyouts to speed up the process of shutting down plants in 2006 to deal with less interest in their products. They have cut nearly 40,000 jobs since 2006. Ford and Chrysler also used buyouts for the same reason in those years.
Strong operations performance outside the US helped GM cope with the steady stream of losses coming from North American plants, but were not enough to compensate with losses at GM's financing arm, GMAC. Still a 49% owner of the lender, GM recorded net losses totalling $38.7 billion in 2007.
Although the move could be used to reduce the company's headcount, many new workers will be hired to replace some of the outgoing laborers. These new employees will be payed less and receive less in benefits from GM.
"We've worked with our UAW partners to ensure our employees have a variety of attractive options to consider," Wagoner was quoted as saying. "The special attrition program is an important initiative that will help us transform the workforce."
wages rnt y gm's sales are so low. it's the stuff they are trying to sell off as cars. I feel there is another strike coming up and some more plants closing.
Clearly in the recent past GMs products were weak in comparison to other auto makers but they have been in the right track with their recent vehicles that can be denied. Wages, retirement and all that crap aren't the only reason GM is struggling but is is a very big problem and it needs to be fixed if GM is to become profitable again. The problems run deeper than just product which they are doin a damn good job of fixing.
What are you talking about, for mid range cars and trucks, GM lies on top for many North American's. I like many people would prefer a new Grand Prix over a new Corolla or Altima. Same goes for smaller car's in the GM line up.
The problem lies in the fact that 10 years ago and going back 80 years GM and Ford were doing fabulous and they expanded their companies too much in my opinion, they were doing stuff inefficiently both financially and labour wise, they simply didn't care because they were making such huge profits and could afford to offer amazing benefits and wages to 400,000 employees. Now they simply don't move enough product to support their huge infrastructure. Wages are not the problem and that is something they still wont be able to change because they are on par with any other manufacturer and the union will strike over it. The biggest portion and cash drain of GM is scattered throughout NA where as their profit producers are across the ocean in europe and asia. They need to start selling product and downsizing, move to more advanced methods of production and more outsourcing for manufacturing and replacing less of their retiring work force. What we need to see is more cars like the saturn/opel Astra. My question is why did it take GM so long to bring that car over when it has been a success in europe for so long?? Why does Ford not bring some of their european models over the ocean?
Well, GM is having a lot of trouble, but only because of their product in the past decade or so. The future is definitely looking better for them compared to companies like Ford, and are comparable with Dodge/Chrysler. Saturn and Pontiac will be carrying GM through the next decade, though Chevy is coming through with some nice new products. Bottom line, a better car is all that is needed, and Saturn has it.
Making cheap looking cars in Korea is not a solution, on the contrary. At least, they should not name those Chevy.
In addition, we have all been waiting for a powerfull diesel Opel/Vauxhall Astra sedan which came out powered only with a 1.3 cdti. Does anyone also know any car being tested so long like Insignia?
why doesn't GM listen to the market anymore?? seriously... europeans and especially japanese automakers have been doing it for years... EFFICIENT, LESS WEIGHT, AND SAFER cars instead of heavy, bulky, SAFE non the less and still not as efficient as a japanese product or some euro products smaller, safer, lighter, more efficient new model range much??? start not or your done for especially with gas running out in the world
Gas IS NOT running out in the world, there's plenty to go around for quite a while. That's just being said so the Middle East Sheiks and the US government can make more money!!!!!!!!!
With those kind of wages, it isn't a wonder why GM is finding it hard to compete with foreign companies.