General Motors on Thursday confirmed it was offering voluntary buyouts or early retirement packages to all 62,000 hourly production workers covered by the United Auto Workers (UAW) union.
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“As the US auto market continues to experience significant challenges, GM – like many other companies – is responding by taking difficult but necessary actions to restructure our business and ensure our long-term viability,” the automaker said in a 6 February statement announcing a special attrition programme for hourly employees beginning immediately.
“Developed in partnership with the UAW, special attrition programmes have been an effective tool to enable early retirements and buyouts and transform our hourly workforce,” the automaker added.
Employees eligible for retirement under the programme would be offered a vehicle voucher and a one-time cash payment. Employees who don’t qualify for retirement can choose a buyout package, which will provide the same incentive. Eligible employees can take advantage of the “mutually satisfactory retirement” (MSR) terms for early retirement contained in the 2007 national agreement with the UAW.
GM spokesman Tom Wilkinson told Agence France-Presse (AFP) the offer “is available to all 62,000 hourly employees. Of those, approximately 22,000 are retirement-eligible, so taking the incentive would move them into retirement,” he said.
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By GlobalData“The goal is to allow us to hire more tier-two workers (who start with lower wage and benefit costs) once business starts to pick up again.”
GM’s current contract with the UAW allows the company, with the union’s consent, to offer buyouts if business conditions warrant cutbacks, the news agency said.
GM also said earlier this week it would cut 10,000 white-collar jobs worldwide this year as part of a restructuring plan the struggling automaker submitted to the government in exchange for an emergency loan.
Wilkinson said the latest actions “are part of the ongoing restructuring of the company, which has been accelerated by the economic crisis and the terms of the government loan programme.”
GM has so far received $9.4bn dollars in bailout loan from the US Treasury to avoid running out of cash as it struggles with a massive sales downturn and may get another $4bn if the company addresses concerns about its viability in a report due to the government on 17 February.
GM will issue its quarterly financial results “some time after the plan,” Wilkinson told AFP.
