GM Sweetens the Buyout Bribes

Frank Williams
by Frank Williams
gm sweetens the buyout bribes

GM really, really, really wants to get rid of all their high-paid UAW workers. In addition to the buyouts they're offering to all salaried UAW members, they're upping the ante by offering retirement incentives as well. The Detroit News reports GM will offer workers taking the [s]bribe[/s] buyout the option of rolling the payouts into a 401(k) or retirement account. Exactly what they're offered depends on their seniority and job skills. Workers with 30 years or more will be offered $45 to $62.5K to retire with full pension and benefits. Workers with between 26 and 30 years can take leave with reduced pay until they reach 30 years (at which point they can take a regular retirement). Workers 50 years old or older and with at least 10 years with the company can retire early with whatever pension they've accumulated and health benefits. Any worker with 10 or more years is eligible for a one-time payment of $140k to walk out the door; for workers with less than 10 years it's $70k. GM isn't saying how many UAW members they want to eject, but UAW President Ron Gettelfinger thinks they're shooting to reduce their numbers by about 20k. GM is expected to replace them with about 16k new hires, paying them about half of what their predecessors made. Some experts think GM hopes "to turn around its beleaguered North American division by the end of the decade… largely [by] moving out senior workers." And there I was thinking that improving their products was the key…

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  • TriShield TriShield on Feb 13, 2008

    Many of GM's products are vastly improved and competitive from their trucks to crossovers to sedans like the Malibu, G8 and CTS. No matter how improved GM's products get they still lose money over US labor and legacy costs which are sinking all three US automakers. That is a problem that product will not address.

  • Jolo Jolo on Feb 13, 2008

    Lose almost $40 billion in a year, get a contract with the uaw to pay less to non-core workers, buyout the higher paid workers, turn over the VEBA to the union to have them take care of their retirees, bring out revised models that will do ok at the start, but settle into mediocore sales like they always do, have a blowhard like Bob Lutz keep shooting the credability of the company towards the sewer, am I missing anything?. Looks like they are almost ready to file chapter 11 here in the US. Then they can move their hq out of MI and maybe to Europe or China. People will still buy their cars here in the US, but since their market share is decreasing here and rising everywhere else, it's time to get out of Dodge, or Detroit.

  • Ron Ron on Feb 13, 2008

    To hope for any semblance of a recovery will require efforts from all fronts; in other words it's a multi-step process. Buyouts just happen to be one of those steps but once GM is done with that, their battle will be far from over. GM never claimed this would solve everything, so stop putting words in GM's mouth and thinking they're relying on this and nothing else! Alot of us want GM to improve their products, but too many of you fail to understand that revitalizing the production sector and freeing up badly needed funds, through the flushing out of unproductive and overpaid workers, is just one PART of improving their products. Is contempt for GM so strong that it actually clouds peoples' judgment? That's pretty damn strong.

  • Redbarchetta Redbarchetta on Feb 13, 2008

    How come they aren't cleaning out the unproductive and overpaid workers at the top. It only would take getting rid of a few of them for a big savings and a monkey replacement couldn't do a worse job then they are now.