Guide Note
General Motors has offered buyouts to 74,000 employees in hopes of lowering manufacturing costs in the face of record losses. The buyout packages are worth between $70,000 and $140,000. GM hopes to replace employees with new, lower-paid workers who will not receive as many benefits as current wage earners.
Fast Facts
- Buyouts of $70,000 with less than 10 years of service; $140,00 with 10 years or more
- Pension incentives worth from $45,000 to $62,500 to retire
- GM suffered a company-record $38.7 billion net loss for 2007
- GM hopes to reduce workforce 8% by 2011
- Average veteran UAW salary: $28.12/hr
GM Fast Facts
- Stock symbol: GM (NYSE)
- Annual revenue (2007): $181 billion
- Founder: William C. Durant
- Established: 1908
- Industry: Automotive manufacturing and distribution
- Phone: (313) 556-5000
- Fax: (313) 556-5108
- HQ: Detroit, Michigan
- CEO: Rick Wagoner
- CFO: Ray Young
- Staff (as of 2007): 284,000
Early Retirement
In addition to the buyouts, GM workers eligible for retirement, received pension offers of between $45,000 to $62,500. Many GM employees were also encouraged to take the option of an early retirement. GM looks to manage costs, by buying out expensive veteran workers, and replacing them with cheaper new hires. With average salaries of $14-$16.23 per hour, new hires are significantly less expensive than veteran UAW workers, who average $28.12 per hour.
