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May 29, 2008 3:21 pm US/Central
GM: 19,000 U.S. Workers Taking Buyout Offers
ARLINGTON (CBS 11 News/AP) ―
General Motors Corp. said Thursday that a quarter of its U.S. hourly workers will take the company's latest buyout and early retirement offers, opening the door for new hires who will make less money.
The automaker said Thursday that 19,000 workers had agreed to take the buyout offers and leave the company by July 1. GM offered buyouts to all 74,000 of its U.S. hourly workers in February.
Some 500 employees at the Arlington General Motors plant have expressed interest in the
Separation Attrition Program or SAP.
"Currently, for the GM Arlington assembly plant, we have 490 employees that have put in paperwork to say that they wanted to take one of the separation packages," said General Motors Business Communications Manager Wendi Sabo.
Nationwide the percentage of GM employees expressing interest in the separation packages is much higher than at the plant in Arlington where there are some 2,400 hourly employees.
Sabo credits some of that to the fact that the Arlington plant is the sole producer of the Cadillac Escalade and the Escalade hybrid vehicles. She says the plant and the city have a lot to offer. "We're working. We have good products. So people want to come to Arlington and kinda want to retire there."Workers at the Arlington plant also build the Chevrolet Tahoe and Suburban, the GMC Yukon and Yukon XL.
GM never said how many workers it hoped would take the buyouts, but under a new labor agreement reached last fall with the United Auto Workers union, GM may hire up to 16,000 non-assembly workers at half the old wage of $28 per hour. GM said it would fill job openings with current employees wherever possible, but would also be hiring new workers.
Troy Clarke, GM's North American president, said GM is trying to reshape its business in a challenging U.S. market, which has seen a steep dropoff in auto sales due to high gas prices and the weak economy.
"This attrition program gives us an opportunity to restructure our U.S. work force through the entry-level wage and benefit structure for new hourly employees," he said.
Under the program, retirement-eligible workers were offered financial incentives to retire with their full pension and benefits, while workers who were within four years of their 30th anniversary with the company were allowed to retire early and get reduced pay until their benefits kicked in. Workers could also take up to $140,000 to leave the company with no ties, including pension or health benefits.
GM spokesman Dan Flores wouldn't say how many workers took early retirement and how many took buyouts. He wouldn't say how much the buyouts will cost GM, saying the company will reveal that later.
Himanushu Patel, an auto analyst with JPMorgan, said GM's acceptance rate on the buyouts was better than expected. He predicted GM won't replace up to 15,000 of the departing workers and will hire 4,000 for total annual savings of $2.1 billion.
Detroit-based GM conducted its last round of buyouts in 2006, when 34,410 workers left the company. GM had a total of 113,000 U.S. hourly workers when it began the 2006 buyouts.
GM shares rose 12 cents to $17.27 in afternoon trading.
The buyout totals came as word spread that GM's top managers are working on additional restructuring measures, including production cuts, to deal with the declining U.S. auto market and an accelerated shift from trucks to more fuel efficient vehicles. Two people who requested anonymity because the plan still is being devised confirmed that Chairman and Chief Executive Officer Rick Wagoner and his top managers are working on it.
Buyouts have been part of restructuring efforts at all of the Detroit Three and their major suppliers in recent years. Ford Motor Co. said last month that 4,200 hourly workers -- just over half the number the company wanted -- had accepted its latest buyout offers, and the company has begun offering more buyouts at specific plants.
GM's largest supplier, American Axle and Manufacturing Holdings Inc., said Wednesday it will cut more than half of its U.S. hourly work force, or 2,000 jobs, through early retirement and buyout offers, plant closures and layoffs.
(CBS 11 News/AP)
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