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General Motors has offered all of its U.S. hourly rate employees, all 74,000 of them, a buyout plan. If employees sever ties completely with the company, no pension, no health benefits, they could be paid a $140,000 lump sum. The article at CNNMoney.com said that 46,000 of the employees are eligible for retirement right now and will be given pension incentives to do so. Two things come to mind when reading this. First, there are only 74,000 hourly workers left at GM? The once proud symbol of American dominance is fledgling, like a lot of other things that ONCE made America great. Second, there are 46,000 eligible workers for retirement, thats a lot of old people! We'll see where this goes but it looks like GM's century long dominance is officially O-V-E-R.
GM buys out UAW
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Posted By: R. D. Briceland Posted on: Feb. 12, 2008 at 9:24 AM  3 Comments
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Feb. 12, 2008 at 10:26:43 AM
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| As of 2005 I found this information about GM... "GM spokesman Jerry Dubrowski says the company expects to pay $5.6 billion in health care costs this year for 1.1 million people covered by its plans. That's up from the $3.9 billion it shelled out in 2001 to cover 1.2 million people." It's not the 74000 GM has on the current payroll that is killing it, it's the 1.1 million (granted this number has changed since 205 but I would guess not by much) sitting on its retiree rolls. It goes on to say, "These problems began to surface about 15 years ago because regulators changed the accounting rules. In 1992, GM says, it took a $20 billion non-cash charge to recognize pension obligations. Evolving rules then put OPEB on the balance sheet. Now, these obligations -- call it a combined $170 billion for U.S. operations -- are fully visible. And out-of-pocket costs for health care are eating GM alive." After 1992 the Government screwed them with the regulations. |
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Feb. 12, 2008 at 04:09:58 PM
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| The unions and the corporations have never been able to come to a agreement of terms that work for both sides. Before the unions were organized hourly workers were treated like dogs. After the tenacious fight to organize was won the grind-it-out workers became middle-class kings. For decades low wage personnel enjoyed pension funds, retirement plans and paid vacation time. Well the vacation's over. The multinational corporations and their millionaire executives have finally found a way to get back at the little guy. Blame it on the competition. Paying these little guys has been keeping the CEO's in the office working late, devising plans to make innovative, reliable, efficient vehicles, which really cuts into their vacation time.
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You are right about one thing, their average age at the factories is very old by standards. They really are not replacing those that do leave. I have a college buddy that works for Ford as an engineer and he has been there for 25 years now. He is going to hang around for another five and be gone. He is way up in the engineering department and has really secured his future nicely. He is worried that under his original deal that he will have any health benefits. Lucky for him that he is in great health, but those options are going by the wayside. Some of the stories that he has told me about how they are trying to cut this and cut that are really incredible.
It is a dying industry for Detroit, but in the grand scheme of things, it is not going to impact the country as much as it would have say 20 or 25 years ago. The GDP of the auto industry is very much smaller then it was due to diversification of industry. It doesn't help Detroit out that much, but the country, as a whole, has adapted.
It is sad to see a once great industry go by the wayside, but its just like the steam engine...something better has come along. In this case, it is foreign auto makers.
The old saying in Michigan is "The last one out of the state, be sure and turn off the light switch".
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