General Motors has not achieved as many buyout or early retirement acceptances as it needs.
Go deeper with GlobalData
It said this week that 7,500 employees – 12% of the US hourly work force – had so far taken the offers made to 22,000 of its 62,000 United Auto Worker members.
GM could begin filling the resulting job openings with laid-off workers as early as next month since those who took the incentives are required to leave by 1 April and may also hire new workers at entry-level wages some time this year, Dow Jones reported. The new recruits start at just US$14 an hour, or almost half the wage of current hourly workers.
GM, seeking to secure more low-interest loans, told the US treasury earlier this year its hourly employment would be about 44,500 by the fourth quarter.
“We are working very hard on our restructuring plan and clearly there is more work that needs to be done,” GM spokesman Tony Sapienza told the news agency. He didn’t say how the automaker would reach the fourth-quarter figure.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataSeparately, Chrysler said it would extend the deadline for union members offered buyouts until after it reaches a new cost-cutting deal with the UAW.
Union members had been required to express interest on whether they would take a package by midnight tonight.
The buyouts at both companies are part of restructuring plans outlined in the auto makers’ bids to secure more federal low interest loans. Both must submit a report detailing their cost-cutting actions by 31 March.
At GM, more than 90% of the UAW members who accepted the buyouts were eligible for retirement, meaning that they will begin receiving about $3,150 monthly pension payments, $20,000 in cash and a $25,000 vehicle voucher. Most made their decision after 20 March, Dow Jones said.
GM said it cut 34,000 UAW-represented factory jobs in 2006 and another 19,000 in 2008 through buyouts and early retirement incentives. The auto maker has now cut 60,500 jobs, or about half of its US factory work force, over the past three years.
Ford is to launch a new company-wide buyout program starting from 1 April to 22 May.
Union members can choose one of three incentive packages ranging from a $50,000 cash payout to two years of tuition assistance of as much as $15,000 a year.
