By on December 13, 2010

Automotive News [sub] reports that GM is bringing out its first round of buyouts since emerging from government-structured bankruptcy a year and a half ago. The General is offering skilled trades workers at 13 plants some $60,000 a head to leave the company, as the firm tries to cut down its ranks of skilled trade workers, of which it has “several thousand” too many. Qualifying workers who have already reached retirement age will receive $60k and full benefits, while younger workers will have to give up retiree benefits to qualify for the buyout. The offer is good at 13 GM plants, eight of which are closed, on standby, or scheduled to close, including Orion Assembly, where 40 percent of the recalled workers have been bumped into the UAW’s second tier typically reserved for new hires (or pushed to another factory to piss off yet more workers). GM hasn’t announced how many buyouts it is looking for in the current round, but with nearly half of Orion’s workers alone facing a 50 percent pay cut (and the UAW pushing for buyouts for months now), it seems likely that GM will be able to convince a whole mess of workers to leave their jobs. Especially if there are more “innovative provisions” coming down the pipe.

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26 Comments on “GM: Buyouts Are Back...”


  • avatar
    tparkit

    Don’t cheer. Government Motors is spending our cash. It already stole the bondholders’ cash and gave it to the union, so there isn’t any more of that.

    http://www.washingtontimes.com/news/2010/nov/25/gms-union-on-road-to-recovery-after-stock-sale/

    I’ll say one thing on GM’s behalf: by pruning the tree they’re being realistic. The US economy is in outright depression, GM has already had a boost from non-Jeep customers leaving a sinking Chrysler, and China is a looming debacle.

    http://www.unconventionaleconomist.com/2010/12/chanos-again-warns-on-chinas-bubble.html

    • 0 avatar
      srogers

      Do you make this stuff up yourself?

    • 0 avatar
      Steven02

      Yep, those bondholders with unsecured debt that lost everything in a legal bankruptcy.
       
      Seriously, everyday is another day for tparkit to spread more rumors about the “illegal bankruptcy.”  Everyday, usually Psar or I say that it was legal… again.

    • 0 avatar
      forraymond

      My thoughts exactly, you are either making it up or are watching way too much Fox “News”.
       
      You will regret the day when the Unions are gone.  We will be back to days of Employer abuses and all the laws passed for worker safety will be repealed in the guise of deregulation.
       
      The short sightedness of those who do not know history will cause all of us to repeat it.

    • 0 avatar
      tced2

      Check out the meaning of “senior bonds”.  The holders of those did not receive normal bankruptcy “senior” treatment. Retired Indiana state troopers and teachers (not Wall Street bankers) got the less than “senior” treatment.

    • 0 avatar
      Steven02

      tced2,
      I was specifically talking about the GM bankruptcy, because the article was about GM.
       
      Now, for the Chrysler bankruptcy…
       
      92% of the secured debt holders agreed to Chrysler’s plan, probably because they can do math.  During a bankruptcy, even chapter 7, you aren’t guaranteed your dollar value.  If the asset your debt is against isn’t worth the loan it was written for, you have problems.  Basically, this is why many homes were foreclosed on in some markets.  The loans were over the value of the house.  This would have likely been the case had this group been given the asset the loan was against, likely a portion of a factory, in which case, it may have gotten less than what it did get.
      But bankruptcy law also has to allow for the 92% of the debt holders that did agree with the deal.  Sure, they were taking less than face value, but they were getting something in a very uncertain time.  The Chrysler bankruptcy is significantly different than the GM one.  But, both were legal.
       
       

    • 0 avatar
      SimonAlberta

      @forraymond – you said:
       
      “You will regret the day when the Unions are gone.  We will be back to days of Employer abuses and all the laws passed for worker safety will be repealed in the guise of deregulation.

      The short sightedness of those who do not know history will cause all of us to repeat it.”
       
      I completely agree with this. I think we are in a very difficult spot right now. In order to retain North American industrial production in many sectors we need to cut costs to be competitive. But this has the effect of diminishing our workers’  standard of living.
       
      This of course tends to depress the economy and can cause real hardship for individuals and industrial communities.
       
      Basically, high wages is a problem but so is low wages.
       
      Surely, much as I don’t philosophically agree with them, high import tariffs must be used to solve this?
       
      Or, perhaps part of any trade agreements must be something like “if you want to sell your goods here you must provide your workers with similar wages and benefits as we do.”

      Probably can’t happen but I see only more and more employment problems in the West unless something is done soon.

    • 0 avatar
      NormSV650

      Looks like everyone is gaining ground in the auto industry except GM trades.

      http://hosted.ap.org/dynamic/stories/U/US_FORD_JOBS?SITE=MIDTN&SECTION=HOME&TEMPLATE=DEFAULT

    • 0 avatar
      windswords

      forraymond, now you are “making stuff up” as someone else has said. We are NEVER going back to the old days (and by old I mean before almost all of us were even born) of sweat shops and unsafe conditions and no regulations over worker safety, even if the congress had 535 Republicans in it. For one a lot of these regulations were proposed and approved of by Republicans, and two, once something is put in place by government it is practically impossible to remove, and three, companies don’t want their workers hurt because it means a loss of money for them, as well as the threat of expensive litigation (this is known as enlightened self-interest). The communist Chinese are more a threat to worker safety than any US political party or movement.  You can put this in the same category as “they are going to take grandma’s social security away”. Wages and bennies may not be as good as they once were due to global competition but worker safety is not going back to the “dark ages”. As a matter of fact even in developing countries the trend is on increasing worker safety, not the opposite. India, Brazil, Mexico, etc. are improving. I suppose China is too, despite the bad press they get, but Bertel would be a better authority on that.

    • 0 avatar
      geeber

      It is indisputable that the union received preferential treatment in GM’s bankruptcy, and this was because of the federal government. It was not a secured creditor, but it still received favorable treatment (it also made only token concessions in its contract, which would not have happened in a normal proceeding). No amount of spin can change that salient fact.

  • avatar
    mikey

    @ Edward….Good reporting, this is the first I’d heard of it. I’ve mentioned before that I’m not a big fan of “two tiered”….I mean,… we were told “we got eat this, to keep the company alive” but now it seems to me its  starting to snowball.

    How long will it be untill Ford wants a piece of this action?

    On another note…How nice to see they interviewed  a group of articulate fella’s. Usually they pick the dirty guy with a three day growth,and can’t say five words without dropping two ” F” bombs.

    • 0 avatar
      tparkit

      “How long will it be untill Ford wants a piece of this action?”

      That’s an excellent question. If the new economic reality is indeed as grim as clues from the US, Europe, and Asia suggest, then Ford won’t have any choice. It’s not limited to auto companies, either. Here’s a piece about the situation in the government sector:

      http://online.wsj.com/article_email/SB10001424052748703766704576009350303578410-lMyQjAxMTAwMDEwMjExNDIyWj.html

      Bloat may die off everywhere. There’s no visibility on how far this retrenching will run, how deep it will cut, or how long it will take.  

    • 0 avatar
      geozinger

      Ford IS already hiring on the two tier wage plan: http://tinyurl.com/39wfx3c – “Ford also started hiring workers at the new entry-level wage of about $14 an hour at the Chicago assembly plant where the 2011 Explorer will be made, Fields told reporters yesterday at the conference.”
       
      Nary a squeak about Ford doing this, but if GM does it…

    • 0 avatar
      dwford

      The difference is that Ford hasn’t forced Tier 1 workers to drop down to Tier 2 wages to stay employed, like GM and the UAW is doing here.

  • avatar
    Steven02

    Pretty smart for giving 60k for them to give up retirement benefits for the ones who haven’t reached retirement.  Getting the benefit money out is the big savings.  It will be interesting to see how this goes.

    • 0 avatar
      mikey

      @Steven02…Interesting it will be. This is going to impact all of us,salary.hourly, retired, anybody connected to the auto industry.

      It may even have a positive impact. I’ve been out for two years and I’m reduced to recieving my news from the blogs. So whatever happens….happens I’ll just have to deal with it.

  • avatar
    geozinger

    Whether we like it or not, GM is doing what it needs to do, which is to reduce costs. Having been in the two tier system myself (the Teamsters had it 30 years ago), I can’t say that I like it, but I understand why it’s being done.

  • avatar
    joe_thousandaire

    “(GM) tries to cut down its ranks of skilled trade workers, of which it has “several thousand” too many” – likely an understatement. Not too long ago tens-of-thousands too many would have been the case. Skilled trades workers have long been the vanguards of the UAW “work an hour, you’re a hero” motto.
    I recall one recent conversation with a GMer in the grocery checkout line. “Oh yeah, I’m in skilled-trade, so if they need me they just wake me up”.

    • 0 avatar
      mikey

       The skilled trade have a similar function to an EMT or a firefighter [without the risk factor]  If something breaks, and you have 2000 people standing around,collecting union wages,believe me….they wake the guy up.

  • avatar
    AaronH

    The stupid and weak will always back unions because they think violence is OK in a civil society. The Bolshevik Baboons were no different. The idea that using government-thug-backed laws, guns, and jails to improve your living standard by stealing from taxpayers is NO different from a common street mugger. Just look at the goof pictured above…Who would willingly hire that thing?

    • 0 avatar
      caljn

      You have a point to be made somewhere, but your biases got the better of you.  I nearly got it in any case, but then you criticized the interviewee shredding any remaining credibility you may have enjoyed.  Perhaps you should change your “handle” and re-sign up for future commenting.
      And judging you by your grammar and tone, I certainly wouldn’t hire you.

    • 0 avatar
      gslippy

      “Who would willingly hire that thing”?
       
      I would, and I’m no fan of unions.  And your comment is unbelievably distasteful.

  • avatar
    gslippy

    I was impressed with the calm, articulate tone of the interviewees, and with the fact that they had not one bad word to say about the company.
     
    This situation really proves the cannibalistic nature of the union leadership – it will be interesting to see how votes for those positions will go.

  • avatar

    it’s about getting rid of anyone with the knowledge and ability to stand up to mgt. GM wants these people gone and is willing to pay big bucks, that and relocate even more offshore. the day will come and fast when our cars will all be made in China, Korea, and India. they can’t rip plants and union halls down quick enough.

  • avatar
    caboaz

    There’s plenty worse than “that thing”…  you best lookout for the slick looking stuffed shirt in the corner office.  Not only are the slick ones a lot less intelligent than the guy above, they’re way more dangerous, even without power tools.

  • avatar
    TonyPepperoni

    Hi men, I am new here, and would like to ask a question. If union benefits add so much to the cost of a vehicle, why don’t non-union-made vehicles sell for measurably less?
    Second, if GM manages to lower payroll through buyouts and tier-shifting, shouldn’t a part of the savings be reflected in the new car pricing?
    I am a union man (Communications Workers of America) who was forced into early retirement.

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