From Detroit Free Press
DETROIT — General Motors Corp. and the UAW announced Tuesday an agreement to offer the first phase of retirement and buyout incentives intended to help the automaker take advantage of cost-saving measures in its new labor contract.
In the first phase of its special attrition program, GM will offer buyouts and retirement packages to all of the UAW-represented hourly employees in its 23 service parts and operations plants across the country, Pittsburgh Metal Stamping, its Massena, NY, casting plant and to union members in jobs banks in Oklahoma City, OK, Linden, NJ, and Rancho Cucamonga, CA.
The automaker said details of a special attrition program for assembly, stamping, powertrain and engineering plants would follow in early 2008.
Attrition is crucial to GM, Ford Motor Co. and Chrysler LLC being able to take advantage of the two-tier wage systems that they negotiated in their new UAW contracts.
The Detroit automakers need to move their top-tier wage earners off the payroll so that they can replace them with workers hired at a newly negotiated lower wage-and-benefit rate and achieve structural cost savings.
"We continue to work closely with our UAW partners to improve our competitiveness in the currently challenging U.S. market conditions," GM Chairman and CEO Rick Wagoner said in a statement. "This first phase of a comprehensive attrition program, designed in conformance with the 2007 UAW national labor agreement, provides our employees with attractive options to consider."
About 5,200 workers will be eligible to participate in the first phase, said GM spokesman Dan Flores. GM plans to distribute the details of its attrition plan to those workers shortly after the holidays, he said.
The attrition program will include a combination of buyout and retirement incentives similar to the special attrition program offered to GM and Delphi workers last year, GM said.
Assuming all workers at the closed facilities and jobs banks and 15 percent of workers at the SPO facilities take packages, Lehman Brothers automotive analyst Brian Johnson speculated that the first phase of the attrition program would result in a reduction of 1,900 tier-one positions, for an annual savings of about $190 million.
Copyright (c) 2007, Detroit Free Press
