7,500 GM employees accept early retirement packages

27 March 2009

General Motors Corp. said 7,500 United Auto Workers members of the company have signed up for buyouts the company needs as part of cuts to keep $13.4 billion in US aid. Also, Chrysler LLC said Thursday it would extend its offers to entice blue-collar workers to leave the company. The old deadline was Friday.

The retirements and buyouts open slots for the biggest US automaker to hire replacement workers for half the current union rate. Under the federal loans GM says it needs to survive, labour costs must match those of Japanese automakers in the US. GM has trimmed about 60,500 jobs in three buyouts since 2005.

GM and Chrysler LLC are encouraging workers to accept buyouts, retire or quit after concessions this year eliminated benefits related to job security and unemployment pay. The automakers are seeking as much as much as $21.6 billion in additional US financing to stay in business. (See: Cash and cars for autoworkers who resign from GM, Chrysler)

At GM, about 12 per cent of the company's US hourly work force of 62,400 decided to leave, most through early retirement offers. GM offered $20,000 cash and a $25,000-voucher to buy a car to all of its hourly employees in an effort to further trim its blue-collar workforce. Gary L Cowger, group vice president for global manufacturing and labour relations, said the buyouts, along with other cost-cuts would ''help ensure the long-term viability and future success of General Motors.''

This is not the first voluntary retirement scheme at GM in recent years. It got 34,400 union members to leave in 2006 with packages of as much as $140,000, and used pension funds to help pay as much as $62,500 for 18,000 UAW members to depart in 2008.

Chrysler may shed about 3,000 workers in a buyout, people familiar with that program said this week. The deadline for acceptances, originally set for tomorrow, has been extended indefinitely because new contract language with the UAW isn't complete, company spokesman Max Gates said.