Thursday 26 March 2009
Workers at a GM plant in Warren, Michigan. (Photo: Bill Pugliano / Getty Images)
About 7,500 General Motors workers, 12 percent of the automaker's U.S. hourly workforce, have signed up to take buyout and early-retirement incentives, GM said Thursday.
That includes 162 people at its Arlington assembly plant, which employs 2,280. The plant is GM's only one that makes large SUVs.
Chrysler also said Thursday that it will extend its deadline to entice blue-collar workers to leave. The old deadline was today.
GM offered $20,000 cash and a $25,000 voucher to buy a car to all of its 62,400 hourly U.S. employees in an effort to further trim its blue-collar work force to match reduced sales.
The departures and other actions taken by GM "will help ensure the long-term viability and future success of General Motors," said Gary Cowger, group vice president of global manufacturing.
Most workers who chose to leave took early retirement, said a person familiar with the numbers who did not want to be identified because the breakdown had not been made public.
The deadline to decide was Tuesday, and many of the workers waited until the last minute to turn in their paperwork, the person said. The workers have seven days from the date they turned in the paperwork to rescind their decision, so many will have to decide by Tuesday.
For those who leave, the effective date of their departure is no later than Wednesday, GM said.
GM and Chrysler are living on a total of $17.4 billion in government loans and are seeking an additional $21.6 billion.
The Obama administration's auto task force has indicated that it may offer more aid but might seek further concessions.
Both companies have to submit completed restructuring plans to the federal government by Tuesday.
The latest round of buyouts and early retirements at GM was the third for the company since 2006. From all three offers, more than 60,000 workers decided to leave the company.
GM has enough workers on layoff to fill all 7,500 vacancies created by the departures, the person familiar with GM's plans said.
But if demand increases and more workers are needed, the company could hire people at a new lower-tier wage of about $14 per hour, the person said.
The UAW agreed to the lower-tier wage in its landmark 2007 contract with the automakers.
More workers agreed to leave the company at plants that are slated for closing, GM said.
At Chrysler, uncertainty over whether the company would get further government loans kept many workers from making a decision on whether to take the offers.
United Auto Workers officials notified factory workers Thursday that the offers had been extended until sometime after the date that union members ratify contract concessions with the company.
Details of the concessions have not been made available, said Chrysler spokesman Max Gates, and no date has been set to vote on the new terms.
"We want our employees to make a fully informed decision," he said. "And part of that decision may be understanding ramifications of the proposed UAW contract."
Workers must notify the company by today if they are considering one of the offers, but they do not have to commit today.
The UAW has tentative deals with Chrysler and GM on concessions, but both companies are still negotiating how to swap equity in the automakers for cash payments into a union-run trust that will take over retiree healthcare costs next year.
Under the terms of the loans, the automakers must replace half their cash contributions to the trusts with stock or other equity. But the union has been reluctant to sign a deal until it knows whether debtholders will make concessions.
This report includes material from Bloomberg News and The Associated Press.