7500 General Motors Staff Accept Buyout
Over 14,000 General Motors staff that are eligible for retirement have elected to stay with the automaker instead of accept a buyout package of as much as US$45,000. However, yesterday the company said that over 7,500 of their staff, who are United Automobile Workers union members, have accepted the last offer from the company.
Many of the staff are to leave the company by April 1st. This number is over double the projection from some analysts, but it just goes to show the difficulty the automaker faces in their attempt to persuade their workforce to give up jobs during the recession, even with a company that is very close to going bankrupt.
General Motors needs a lot of their longtime staff to leave so that they can replace them with new workers who will earn only half as much. The automaker has borrowed US$13.4 billion from the US government since the end of last year, and now they are calling for another US$16.6 billion.
Gary L. Cowger, the Vice President of Global Manufacturing and Labor Relations at General Motors, says that the buyouts, as well as other cost reductions, will help to ensure the future success and long-term viability of the company.
Brian Johnson, an analyst of Barclays Capital, has estimated that 5% of the workforce at General Motors will take buyouts. The 7,500 figure represented by the workforce amounts to 10%. The departure of over 6,000 employees would save the automaker a minimum of US$784 million per year, according to Johnson.
Learn more at: www.gm.com