7,500 GM employees to take buyout package

General Motors union employees are lining up to take a buyout package. The package will give those who signed up for it $20,000 in cash and $25,000 toward a new GM car.
About 7,500 General Motor Corp. workers have accepted a buy out meeting the internal company goals. The Detroit automaker has been pushing their unionized work force to accept buyouts, retire or quit. The company has taken a hard hit due to the recession and is unable to guarantee job security. Without older workers leaving the workforce the company doesn’t stand a chance to survive.

Most of the more than 7,500 members of the United Automobile Workers union that took the buyout will leave their positions by the first of April. Many of the employees had a difficult time deciding if they were going to take the package. They fear that GM will not survive the recession.

General Motors needs for the employees to leave to allow for new hires that earn half of the older workers salaries. It has to be able to show President Obama that it is making real progress to cut labor costs in order to receive the $16.6 billion funding they say is the only way to survive in these tough economic times.

At GM’s Janesville, Wisconsin plant 624 workers have accepted the offer, the largest group at any one facility. The plant was forced to shut down at the end of last year and is planned to close in 2010.

The Grand Rapids metal plant also had a large number of employees take the money.

The New York Times reports:

“It’s a choice between the uncertainty of staying and the uncertainty of leaving,” said Gary N. Chaison, a professor of industrial relations at Clark University in Worcester, Mass. “At this point, the people who are accepting buyouts have turned them down before, so something has shaken them loose. These are really the saddest decisions of all because they know they could have taken a buyout before on better terms.”

Gary L. Cowger, group vice president for global manufacturing and labor relations, said the buyouts, along with other cost-cuts would “help ensure the long-term viability and future success of General Motors.”

The offer was made available to the 62,000 hourly workers employed by General Motors. About half of those who took the buyout did so after Friday.

Most of the workers that have gone for the offer are considered retirement eligible, having at least 30 years of employment with GM. Those employees are also eligible for a $37,000 pension a year.

Shares have climbed 11 per cent in premarket trading following the news.

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