GM offers buyouts to 74,000 - its entire U.S. hourly workforce

[dajoki]

GM offers buyouts to 74,000
Auto giant aims to replace much of U.S. workforce with lower-paid new hires, dangling $140,000 buyouts to UAW members to stem North American losses.
By Chris Isidore, CNNMoney.com senior writer
February 12 2008: 12:44 PM EST
http://money.cnn.com/2008/02/12/news/companies/gm/?postversion=2008021212

NEW YORK (CNNMoney.com) -- In an effort to shave ongoing losses, General Motors offered lucrative buyouts Tuesday to 74,000 employees - its entire U.S. hourly workforce.

<<snip>>

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.

<<snip>>

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.

<<snip>>

The current veteran UAW member at GM today has an average base wage of $28.12 an hour, but the cost of benefits, including pension and future retiree health care costs, nearly triples the cost to GM to $78.21, according to the Center for Automotive Research.

By comparison, new hires will be paid between $14 and $16.23 an hour. And even as they start to accumulate raises tied to seniority, the far less lucrative benefit package will limit GM's cost for those employees to $25.65 an hour.

[terryg11]

1. wow.

It will be interesting to see how many take them up on it. \

Does the UAW need to agree to this first or are they going to let the individuals decide? I'm curious to hear how the UAW responds

[Bozita]

3. It's part of the new agreement

[madmom]

25. each individual gets to decide for themselves, that big lump sum is if they

give up ALL ties to the company even pensions. If they want to keep pension the offer is $45,000. a slap in the face IMO. If someone is say 57 years old and takes $140,000, lose about 1/3 for taxes, that means less than $100,000 do live on with no pension, no health car, and no job. Who's gonna hire some one that old besides Wal-mart? Fuck GM!

[Bozita]

2. The new workers will only have half the economic impact on their communities.

And half as much as their predecessors to gain a middle class lifestyle.

Scary.

[Systematic Chaos]

4. You can work as a fucking telephone debt collector for $14/hour.

Wow. Just WOW. Rest assured that if I hit Megabucks tomorrow, any vehicle I chose to buy would NOT be from GM.

[aquart]

5. So, they're pulling a Circuit City?

[dajoki]

10. YES!!...

I remember posting a thread about that and here it is.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=523692

Circuit City will fire 3,400 sales people and replace them with employees willing to work for less..
Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=aw....

Circuit City to Fire 3,400, Rehire Cheaper Workers (Update3)

By Mark Clothier

March 28 (Bloomberg) -- Circuit City Stores Inc., the second-largest U.S. electronics retailer, will fire 3,400 sales people and replace them with employees willing to work for less.

The company, which reported its first loss in six quarters in December, is eliminating jobs that paid ``well above'' market rates. Those who were fired can apply for the lower-paying jobs, company spokesman Bill Cimino said today.

<<snip>>

``Firing 3,400 of arguably the most successful sales people in the company could prove terrible for morale,'' Colin McGranahan, an analyst with Sanford Bernstein & Co., wrote in a note today. ``The question remains as to whether Circuit City can rebuild in time for the all-important holiday season.''

<<snip>>

The sales people being fired weren't given an option of taking a pay cut, spokesman Cimino said. He declined to give the pay rate for fired workers or the expected wages for new hires.

<<snip>>

Circuit City pays about $10 to $11 an hour, on average, Weinhart estimated. Entry level pay probably is close to $8 for inexperienced workers, he said.

[Dr.Phool]

14. I haven't been in a Circuit City since. And never will.

As for GM. I think this week-end I'm trading in my S-10 for a Prius.

[aquart]

19. Same here.

[dajoki]

22. I would love to get a Prius n/t

[hfojvt]

43. not quite. A buyout of $140,000 is not nearly the same as getting fired

I think I could live on $140,000. At 5% interest that would be $7,000 a year. I make $14,000 a year now. So if I spent $10,000 a year the money would last at least 14 years. By which time I would be 60 and could cash my IRAs. Also, if I had worked 10 years at a job making $28 an hour, I would have a ton of money saved up. That's a total salary of $582,400! versus my lifetime earnings for the last 22 years of about $230,000.

[dajoki]

45. No its not the same but...

the result is being left without a job. And many of these workers will not get hired because of their age.

[hfojvt]

46. then they should not take the buyout

But hey, back in 1991 I started my own bookstore with $12,000 in savings. Two or three of those people get together and they can open up their own restaurant or something.

[dajoki]

52. If they don't take the buyout...

I'm sure that they will be forced out in an unpleasant manner, and then left with nothing.

[madmom]

57. that's it in a nutshell.. My SO works for GM and the deal is (as we know it)..

if you don't take the buyout you can keep your rate of pay , if for some reason you transfer to a different job, different department, different shift or if you're off the job for 30 days, sick leave or what ever you're pay rate gets cut. It seems to me they are trying to force retirement by threats (is this legal?),what if someone who has enough time in but is not financially ready for retirement and doesn't want to retire just yet?

[dajoki]

58. That is horrible...

but I expect that kind of action from these large companies. As for being legal, I'm not sure, but there are laws against age discrimination, its worth contacting an attorny, also getting an FMLA wouldn't hurt.

[aint_no_life_nowhere]

6. And in 10 or 15 years they can buy out the new workers

and hire new people at $10 an hour with no pension or health benefits. And the circling of the drain will continue until no one can afford to buy the products they make, while GM fails to manufacture cheap, truly efficient cars because the profit margin on tanks and land yachts is greater.

[Bozita]

8. My crystal ball is showing the same picture. ... The great circling of the drain

[Virginia Dare]

30. It's been a race to the bottom for a while now..

how long before American workers are back to 6 day work weeks with no vacation or benefits?

[dajoki]

33. There are many like that now...

I had a job similar to that. Mandatory overtime, no benefits, but we did get a week vacation; however we were strongly encouraged to work through our vacation.

[leftofthedial]

7. What has GM done about executive compensation?

[Lydia Leftcoast]

11. You don't even have to ask

Whoever thought up this plan of replacing the workforce will probably get a multi-million dollar bonus, and GM's share prices will go up.

I've seen this movie before.

[Virginia Dare]

32. The parachutes are all pure gold....n/t

[LSK]

9. where are those posters who want to defend GM against "foreign" car companies?

:shrug:

[IronLionZion]

42. How much do Honda and Toyota pay their US workers?

anyone know about the benefits packages for these other carmakers?

[reformedrethug]

49. Honda pays their workers very well

After 3 years the line associate tops out at 25.00 an hour (I forget the exact change) with a shift differential of up to 1.00 per hour for 3rd shift. Teamleaders/Staff make 1.00 an hour more and management levels are on a salary. They top out at 4 weeks a year paid vacation, 6 call-ins, paid shutdown for about a week-two weeks over the Christmas holiday and the week of July 4th in the summer. They also get a yearly profit sharing in November and right before the summer break they also get a bonus check.

They get free uniforms, company paid health, vision, and dental, 401k PLUS retirement checks if you stay long enough.

[DB1]

12. Yet another reason--Thank Cinton/ Bush/NAFTA--we need new ideals!!!

Vote Obama "08

[Fire Walk With Me]

13. And the new employees will be thankful for something better than a McJob.

[Dr.Phool]

15. And we can all buy McCars.

[dajoki]

28. And pay our McMortgages n/t

[thoughtcrime1984]

16. These fucking corporations are running amok

They need to be slammed down with policy. We need a Democrat in office ASAP, one who will attack the Wall ST. driven corporations. If we get another Repub in the WH, the middle class will continue to deteriorate into the lower class. 99% of the wealth to 1% of the population.

[thoughtcrime1984]

17. Do these assholes not see that they are killing their own business?

Smaller middle class = a whole hell of a lot less cars sold. Dumb bastards, only worrying about a horizon that lasts exactly one quarter, all in the name of greed. I hope all of these CEO's and officers rot in hell.

[librechik]

23. They're mostly international conglomerates at this point.

what do they care about the rubes in Michigan or South Carolina? The Board meets in Zurich!

[truedelphi]

41. Zurich! Really. -- And isn't it interesting that

One of the problems that GM complains about is the cost of health care.

Here is another thing to point out to people about higher taxes if we go with Single Payer Universal Health Care - no longer will companies be able to pull our jobs by saying that the benefits cost so much.

Isn't it better to have higher taxes with good paying jobs than no job at all?

[JCMach1]

18. Job Churning on a massive scale

When will the American people realize the corporations have betrayed us?

[TexasObserver]

20. How much is Mitt Romney's cut for putting them out of business?

[no_hypocrisy]

21. Two birds with one stone.

1. Replace veteran workers who have experience and salary-compensation-benefits that are "excessive" with novice journeymen who will receive less.

2. Kill the unions, particularly the UAW, and the American Dream.

[KillCapitalism]

24. This sucks for the current workers, but $14-$16 an hour still isn't bad.

I guess it depends on where you are, but most jobs in my area are only paying about $7-$10/hr.

I'm sure GM will have no shortage of new applicants.

Maybe if the company stops building turds & they become profitable once again, the wage scale can be increased I would hope.

[dajoki]

26. Don't count on it...

Once you go backwads, RARELY can you recover what was lost. And no, $14-$16 an hour still isn't bad where I live, but it doesn't compare to $28/hr.

My problem is the way the workers in this country are treated, most of the former employees probably spent their entire working lives at GM, busting their asses and getting themselves up to a good wage. Then when the company decides that they are no longer useful, the employees are thrown out like a dirty dishrag. And it is not only GM, it is going on all over the country, many small companies are doing the same thing but do not get the publicity of the giant companies.

[B Calm]

35. I hope Obama doesn't take your view!

[dajoki]

39. We have been so conditioned...

to accepting this type of thinking and it really sucks!! People working their whole lives at a company finally getting up to good wages are so rare anymore, not because they can't do the job, but because of the company's bottom line. Like I said before, once they are past the employer's usefulness they are just disgarded.

But like the poster said there will be no shortage of new applicants, because it beats McDonalds or Wal-Mart. That is just the way we have been indoctrinated.

[KitSileya]

48. Americans are so brainwashed it's scary.

Truly, the willingness of American workers to go against their own interests is baffling. Speaking as a union member in a country with proper worker's rights, the way Americans are willing to hang separately rather than together just defies explanation - their employers are laughing all the way to the bank, while American workers are serfs. But like the blind men and the elephant, they refuse to hear the truth.

[dajoki]

53. That is so true...

Everytime I hear something like this it reminds me of the 2000 campaign. A WV coal miner being interviewed says "Gore ain't gonna take my guns away from me". I mean talk about being brainwashed or voting against your own best interests. Its just an image I will never forget.

[KillCapitalism]

47. Sorry if my view is a bit negative...

but a lot of people around here would just about kill for a $14-$16 an hour job.

[Ilsa]

27. Great. We'll become a nationof low wage workers living in

a country of expensive homes, energy, healthcare, etc. We won't be able to afford anything. It's one thing to share your rent and heat, but another to share your chemo. They've got us by the balls.

[Virginia Dare]

31. I suppose they're counting on Americans to keep racking up debt..

to get the things they want. Is everybody going to die in debt now? Will our children and grandchildren spend the rest of their lives paying our debts? These are rhetorical questions by the way.

[LeftinOH]

29. This is the same company that offers 5 (five!) different Hummer models, and

a Cadillac pick-up truck, a Suburban-based Cadillac, and two big Cadillac SUVs. On the other hand, their only compact models are the Chevy Cobalt/Pontiac G5 twins, which are good, but not condidered competitive with other models in their size range, and the Saturn Astra (a re-badged Opel). GM's lone subcompact is the Chevy Aveo.. also good, but outsourced to Korea (the former Daewoo). GM's product priority seems to show contempt for the low-sticker price/low mileage market segment in this country.

[dajoki]

37. You make a great point...

Welcome to DU LeftinOH.:hi:

[B Calm]

34. Corporations did this same kind of shit during the Reagan Era. They

always say this makes them more competitive in the market place. But they never drop the price of their product, instead they raise it. They give the salary people big pay raises and benefit packages and the hourly worker gets screwed. Eventually they get bored of exploiting the U.S. hourly worker and start looking at other countries for cheaper and more plentiful natural resources to exploit!

[dajoki]

36. Don't get me started on Raygun...

I lost the best job I ever had thanks to his union busting tactics. And I'll stop right there, because I do not wish to waste my brain cells ranting about that lunatic.

[baldguy]

38. The big American auto makers have forgotten Henry Ford's lesson.

To be successful a corporation has to pay its workers enough so that they can afford to buy the things they make.

[WinkyDink]

40. Presto! No Union members!

[Jack Rabbit]

44. I got a better idea

Let GM's 74,000 employees buy out the idiots on the Board of Directors.

[taught_me_patience]

50. I wonder what this will do to quality

they already have a bad reputation!

[hvn_nbr_2]

51. I'll rush right out to buy a car built by cheap inexperienced workers. nt

[sarcasmo]

54. Stick a fork in them they are done. I will never buy another GM car and my father just retired from

GM. This is exactly like Circuit city.

[dajoki]

55. Two companies that I will never deal with again n/t

[B Calm]

56. So how many thousands of dollars will they drop off the price of automobiles

to the consumer? Answer: not one red cent!

Pisses me off when corporations say that this will make them more competitive in the market place, when you know damn well it's going straight out of the hourly employees pocket and into the salary employees pocket!