GM Wants to Replace Much of U.S. Workforce with Lower-Paid New Hires; Offers Buyouts to 74,000 Current EmployeesFebruary 13th, 2008
The fact that GM is viable at all is the real news.
In an effort to shave ongoing losses, General Motors offered lucrative buyouts Tuesday to 74,000 employees – its entire U.S. hourly workforce.
The nation’s largest automaker announced the latest round of buyouts as it reported another loss on its core auto operations in the fourth quarter, which combined with charges taken earlier in the year left GM (GM, Fortune 500) with a company-record $38.7 billion net loss for 2007.
To try to stem automotive losses that have dogged the company since 2005, the company is making a range of offers, up to cash payments of $140,000 to the remaining 74,000 GM workers represented by the United Auto Workers union.
The goal is not to reduce headcount but rather to bring in new workers at a lower cost.
About 46,000 of the GM employees are eligible to retire today and they can take pension incentives worth between $45,000 to $62,500 to retire.
In addition there are inducements for those who are within five years of retirement to leave early and receive benefits.
Those who leave and agree to sever all ties with the company – including giving up lucrative pension and health care coverage – will receive a lump sum of $140,000 if they have 10 years of service. They will receive $70,000 if they have less than 10 years of service.
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