GM, Chrysler Offer New Buyouts
'Attrition Program' Incentives Will Include Cash
and Vehicle Vouchers.
'Attrition Program' Incentives Will Include Cash
and Vehicle Vouchers.
Article by Wall Street Journal
General Motors Corp. and Chrysler LLC, under pressure to comply with viability requirements set by the Treasury Department, plan to unveil attrition programs at U.S. plants as early as this week in order to trim labor costs further, according to people familiar with the matter.
United Auto Workers officials at GM have received details of the plans, which include worker buyouts, but the auto maker hasn't yet disclosed specifics publicly. A GM spokesman said he couldn't comment on the matter.
United Auto Workers officials at GM have received details of the plans, which include worker buyouts, but the auto maker hasn't yet disclosed specifics publicly. A GM spokesman said he couldn't comment on the matter.
GM and Chrysler, recipients of federal loans to help them survive a severe slump in auto sales, must submit plans to the government by Feb. 17, 2009 on how they intend to get back on track. Cutting hourly labor costs represents a substantial portion of what is expected to be included in those plans.
A UAW spokesman couldn't be reached for comment. GM union officials have been told that the program is intended to "address the number of surplus employees and create the potential for hiring entry-level employees when the business environment improves," according to these officials.
All hourly employees will be able to retire either on a normal or a voluntary basis, depending on their tenure, and receive a $25,000 vehicle voucher and $20,000 cash. The vehicle voucher will be valid for 18 months.
GM told union officials that there are certain restrictions being placed on the company's plan by the Treasury Department, including restriction of the use of pension funds to pay for attrition packages.
For Chrysler, retirement-eligible workers who leave will get a $50,000 incentive plus a $25,000 Chrysler vehicle voucher, according to a union official who reviewed a notice from the company. Workers who take a buyout and leave with no retiree health-care benefits get $75,000 and a $25,000 car voucher, the person said. Last year, retirement-eligible workers received $70,000, while those who took buyouts got $100,000.
"Given the difficult economic and market conditions in the U.S., Chrysler LLC determined in December 2008 that it would offer another phase of special [attrition] programs," Chrysler spokeswoman Shawn Morgan said without confirming actual details of the offer.
The majority of unionized hourly workers will have until Feb. 25 to decide, she said.
She said the original plan was to offer the program in December and January, but "due to the fact that many of the company's facilities had suspended production for extended periods in December and January, the program offerings are being rolled out now."
She said the original plan was to offer the program in December and January, but "due to the fact that many of the company's facilities had suspended production for extended periods in December and January, the program offerings are being rolled out now."
A Ford Motor Co. spokeswoman had no comment on whether the auto maker will offer a similar program. Ford hasn't asked for a federal bailout.
