By on June 28, 2011

I love General Motors. I’m bringing this age-discrimination suit action because it’s the right thing to do — for me, my family, as well as my GM peers who have been severely affected by GM’s conduct.

A critical aspect of GM’s turnaround was breaking a culture that has been held up for decades as an example of insularity, stagnation and inefficiency [for more read Ron Kleinbaum’s classic four-part editorial on the subject here], a task that various recent CEOs have gone about differently. Fritz Henderson had a “change agent” vanguard approach, while Ed Whitacre took more of a “set tough goals and fire regularly” tack towards GM’s culture wars. But regardless of differences in tactics, everyone’s agreed that GM’s culture needed to be seriously retooled if the company’s huge advantages after a government-backed bankruptcy-bailout weren’t going to be pissed away, and as a result a lot of GM’s “lifers” found themselves on the outside looking in. And rather than slinking away, one of those jilted lifers is suing GM for age discrimination.

The Freep reports

[Daniel Plouffe’s] lawsuit says that when GM emerged from bankruptcy in 2009, it embarked on a campaign to replace older executives with those under 50 by encouraging older executives to retire.

Many of those who didn’t retire were demoted out of the executive ranks with no chance of being considered for future promotions, regardless of their qualifications.

Plouffe, who has worked for GM since 1971, said he was demoted to a level 9 position, resulting in a 20%-25% pay cut, even though he assumed the responsibilities of three other executives who left.

He said a succession of GM officials told him that he was being demoted because the company wants to promote younger people — those under 50 — even though his last performance evaluation said he far exceeds expectations.

Plouffe is seeking class action certification, but legal experts say he’ll “face a daunting task.” After all, to defend itself GM simply needs to prove that there were business advantages to thinning the executive ranks. Still, perhaps this will make current CEO Dan Akerson think twice about saying things like

It’s just like the Communist party in China in the 1960s: There has to be a cultural revolution here.

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10 Comments on “The Downsides Of “Culture Change”: GM Sued For Age Discrimination...”

  • avatar

    Age discrimination is historically hard to prove and I’m torn on this one. Part of me thinks that by nature “early retirement” is going to target older employees, part of me thinks that anyone who has been at GM that long in an executive role is probably part of the problem while the balance of me thinks that in general the “youth movement” saves a company in the long run but the intellectual vacuum it creates can be more damaging in the long run.

  • avatar

    I have heard way too many cases of people being let go and ‘rehired’ to wipe away seniority and grandfathered benefits. He’s still rolling in big money, so this is just greed on his part. He kept his job when many didn’t, so this sounds like a bitter old man grabbing for money. 1971? he should be thinking for the company and gladly accepting retirement he can afford to let more younger people inject some life into his beloved employer that has treated him well enough to promote him that high. Culture change would have been to let this guy go. In MI, most employers don’t lay off anyone older than 40 for fear of legal action. When I was initially let go from a major auto company, I was given a scatterplot of the #’s of attrition by age group, and there were none above 40. I think there’s some state law that protects the older workforce.

  • avatar

    Cry me a f—en river. Back in the dark days of 07 and 08 everybody, hourly, and salary, could see the writing on the wall.

    It was made perfectly clear. “Here’s your offer, Take it, or leave it”

    Here’s how it went with me,a low life hourly employee.

    Mikey….”Right now you have a nice cushy job sitting at a desk”. Union, AND management, let it be known to me. “By this time next year mikey, you might find yourself bolting fenders on Impalas”

    I know many salary people that were told, pretty well the same thing.

  • avatar

    From the outside it’s hard to pick a winner here. The employee who probably wound up in a unrealistically well paying and soft job or the company who probably had thousands in the same situation. Seems like another argument for letting GM fail.

    • 0 avatar

      If wstarvingteacher is eponymous, and if he’s a unionized public school teacher, he has “a unrealistically well paying and soft job”.

      • 0 avatar

        I am just learning this comment game. Not sure about the right way to reply but am sure that I was never unionized. Also sure that I was hired to work special ed in a series of adaptive behavior centers so it wasn’t soft nor was it particularly well paying. The handle is eponymous but somewhat misleading. Now retired for a year.

      • 0 avatar
        Educator(of teachers)Dan

        Um that was not a typical B&B exchange, wstarvingteacher. Hope your enjoying the retirement. 34 yr old educator with 10 years of experience and currently working a central office position in which I’m trying to help my colleauges improve their practice. Oh and a proud memeber of the American Federation of Teachers, AFT.

      • 0 avatar

        For Dan: Don’t know what typical would be. Do know that I was commenting in response to tirivng without acrimony. I applaud your choice to advance but after several years of non-teaching experience I became a teacher and never had any desires to be other than what I was. This had nothing to do with cars so I would be real happy to talk no more about me. Have been watching comments for quite some time before logging in to do it myself. Am enjoying myself and finding my way.

  • avatar

    Suspecting Plouffe does not care/know about Tier 2 in the UAW.

    It’s reverse racism!

  • avatar

    Or maybe it is another case of clueless hamhandedness by GM management that has never had to do this before. I have long maintained that the bankruptcy process did not clear out enough management deadwood. If GM wanted to clear out more people and at lower levels, it could have left everyone at the old company and selectively hired at the new GM. Instead, it has always seemed to me that they tried to run the bankruptcy so as to benefit the old-boys club in management.

    Now if GM is really selectively demoting only older managers, you are doggoned right they are going to get sued for age discrimination, just like every other company in the country would if they do this sort of stupid crap.

    When the guard changed at Chrysler in the early 80s, Iacocca put strict performance goals out there for managers. Those who didn’t meet goals either resigned or got fired. Not just the old ones, although this is probably how it worked out. There are some ways you can thin management ranks and some ways you can’t.

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