It's official: A third of General Motors' workforce to depart
#1
Speaks French in Russian
Thread Starter
It's official: A third of General Motors' workforce to depart
It's official: A third of General Motors' workforce to depart
http://www.leftlanenews.com/2006/06/...ave-automaker/
General Motors late this afternoon officially announced that approximately 35,000 hourly employees (33,800 UAW-represented and 1,200 IUE-CWA-represented) have agreed to participate in early retirement programs. GM announced the program late last year in an effort to drastically reduce its workforce. Today's official figure represents roughly a third of GM's workforce and do not include workers who will leave former subsidiary Delphi. Coupled with the hourly workforce reduction of 6,500 in 2005 and estimated replacements, including Delphi flowbacks, GM expects to reach its target of reducing 30,000 manufacturing jobs by Jan. 1, 2007, about two years ahead of the previously announced schedule.
"Over the past several months, we have accomplished a great deal in our strategy to reshape GM into a company that is more nimble, more global and built for long-term success," said GM Chairman and Chief Executive Officer Rick Wagoner. "These moves have given us a fast start toward achieving our stated objective of reducing GM’s global structural cost from approximately 34 percent of revenue in 2005, to 25 percent of revenue by 2010, and setting us up to be successful for years to come."
In the last year, GM has been aggressively implementing its North American turnaround plan. Some of the major actions taken include the health-care agreement with the UAW and the IUE-CWA; the manufacturing capacity plan; changes to U.S. salaried health-care and pension plans; a complete overhaul of GM’s marketing strategy; and accelerated launches of key new product entries and technologies.
The accelerated attrition program was announced in March and offered to 109,000 UAW-represented hourly employees and 3,800 IUE-CWA-represented employees at GM’s manufacturing operations in the United States . The program ended at midnight June 23. Employees who signed up that day have seven days after signing up (no later than midnight June 30) to opt out of their retirement or buyout.
Based on preliminary numbers, approximately 4,600 of the participating employees accepted buyouts and approximately 30,400 chose to retire. It is expected that most will retire or leave the company by the end of the year. These numbers do not include Delphi employees who are participating in similar attrition programs.
In addition, the JOBS Bank will be substantially reduced as employees from the Bank retire, take a buy-out or fill openings created by the attrition program. These moves will be coordinated by GM and the UAW, working through national and local agreements.
As a result of the success of the accelerated attrition program, GM is again increasing its targeted reduction in structural costs in North America to at least $8 billion from $7 billion on an annual running rate basis by the end of 2006.
Approximately $5 billion in savings is expected to be realized in 2006. The additional cost reduction of at least $1 billion, largely cash savings, will bring expected total annual cash savings from structural cost reductions to $5 billion.
Structural costs, such as the cost of unionized employees, are those operating costs that do not vary with production and include all costs other than material, freight, and policy and warranty costs.
GM expects to take a netafter-tax charge currently estimated in the range of $3.8 billion related to the attrition program, primarily for payments to employees and for the effect of the re-measurement of both GM's U.S. pension liabilities and other post-employment benefits (OPEB) liabilities. This charge includes a revision of the accrual taken in the fourth quarter of 2005 for the North American plant capacity actions.
The amount of this charge is subject to further review based on such factors as the demographics of the employees accepting the retirement offer. Most of the above-noted charge will be included in second-quarter financial results. GM will provide final estimates and additional financial details when it releases second quarter results next month.
The attrition program also represents another step in reaching a consensual agreement with Delphi , the UAW and the IUE-CWA in connection with the Delphi restructuring.
Wagoner recognized UAW leadership’s role in the success of this attrition program. "We appreciate the UAW’s steady support in working with us as we make the necessary moves to restructure GM North America for long-term success," he said.
Wagoner also thanked the IUE-CWA and GM’s other unions for their support. He noted: "By working together with our unions, we can come to solutions to challenging issues that are fair to both our employees and other important constituents."
He also recognized GM employees’ role in the turnaround efforts.
"Consideration of the attrition program was an important decision for every worker and his or her family," Wagoner said. "For those employees who chose to retire from or leave the company, I want to thank them for their contributions over the years. For those who decided to stay, I look forward to their continued commitment to building great cars and trucks."
Detailed plans are in place to ensure a smooth transition in GM manufacturing plants. Employees who chose to leave the company will retire or leave no later than Jan. 1, 2007 . GM will use temporary employees as necessary while permanent replacements are put in place . All temporary, relocated, and Delphi flow-back workers will receive extensive training to maintain GM’s safety leadership and strong quality performance.
"I have said before that our goal in restructuring the company is not just to change GM’s bottom line from red to black," Wagoner said. "Our goal is to structure GM for sustained profitability and growth … to set us up to be successful for years to come in an ever-more competitive global auto industry.
"Over the past several months, we have accomplished a great deal in our strategy to reshape GM into a company that is more nimble, more global and built for long-term success," said GM Chairman and Chief Executive Officer Rick Wagoner. "These moves have given us a fast start toward achieving our stated objective of reducing GM’s global structural cost from approximately 34 percent of revenue in 2005, to 25 percent of revenue by 2010, and setting us up to be successful for years to come."
In the last year, GM has been aggressively implementing its North American turnaround plan. Some of the major actions taken include the health-care agreement with the UAW and the IUE-CWA; the manufacturing capacity plan; changes to U.S. salaried health-care and pension plans; a complete overhaul of GM’s marketing strategy; and accelerated launches of key new product entries and technologies.
The accelerated attrition program was announced in March and offered to 109,000 UAW-represented hourly employees and 3,800 IUE-CWA-represented employees at GM’s manufacturing operations in the United States . The program ended at midnight June 23. Employees who signed up that day have seven days after signing up (no later than midnight June 30) to opt out of their retirement or buyout.
Based on preliminary numbers, approximately 4,600 of the participating employees accepted buyouts and approximately 30,400 chose to retire. It is expected that most will retire or leave the company by the end of the year. These numbers do not include Delphi employees who are participating in similar attrition programs.
In addition, the JOBS Bank will be substantially reduced as employees from the Bank retire, take a buy-out or fill openings created by the attrition program. These moves will be coordinated by GM and the UAW, working through national and local agreements.
As a result of the success of the accelerated attrition program, GM is again increasing its targeted reduction in structural costs in North America to at least $8 billion from $7 billion on an annual running rate basis by the end of 2006.
Approximately $5 billion in savings is expected to be realized in 2006. The additional cost reduction of at least $1 billion, largely cash savings, will bring expected total annual cash savings from structural cost reductions to $5 billion.
Structural costs, such as the cost of unionized employees, are those operating costs that do not vary with production and include all costs other than material, freight, and policy and warranty costs.
GM expects to take a netafter-tax charge currently estimated in the range of $3.8 billion related to the attrition program, primarily for payments to employees and for the effect of the re-measurement of both GM's U.S. pension liabilities and other post-employment benefits (OPEB) liabilities. This charge includes a revision of the accrual taken in the fourth quarter of 2005 for the North American plant capacity actions.
The amount of this charge is subject to further review based on such factors as the demographics of the employees accepting the retirement offer. Most of the above-noted charge will be included in second-quarter financial results. GM will provide final estimates and additional financial details when it releases second quarter results next month.
The attrition program also represents another step in reaching a consensual agreement with Delphi , the UAW and the IUE-CWA in connection with the Delphi restructuring.
Wagoner recognized UAW leadership’s role in the success of this attrition program. "We appreciate the UAW’s steady support in working with us as we make the necessary moves to restructure GM North America for long-term success," he said.
Wagoner also thanked the IUE-CWA and GM’s other unions for their support. He noted: "By working together with our unions, we can come to solutions to challenging issues that are fair to both our employees and other important constituents."
He also recognized GM employees’ role in the turnaround efforts.
"Consideration of the attrition program was an important decision for every worker and his or her family," Wagoner said. "For those employees who chose to retire from or leave the company, I want to thank them for their contributions over the years. For those who decided to stay, I look forward to their continued commitment to building great cars and trucks."
Detailed plans are in place to ensure a smooth transition in GM manufacturing plants. Employees who chose to leave the company will retire or leave no later than Jan. 1, 2007 . GM will use temporary employees as necessary while permanent replacements are put in place . All temporary, relocated, and Delphi flow-back workers will receive extensive training to maintain GM’s safety leadership and strong quality performance.
"I have said before that our goal in restructuring the company is not just to change GM’s bottom line from red to black," Wagoner said. "Our goal is to structure GM for sustained profitability and growth … to set us up to be successful for years to come in an ever-more competitive global auto industry.
http://www.leftlanenews.com/2006/06/...ave-automaker/
#4
Lexus Champion
Originally Posted by 1SICKLEX
I don't understand how our government seems to have no concern on what is going on with our carmakers.
I know this is just crazy talk, but perhaps GM should start considering building vehicles that are actually worth buying. I know, I know... I've clearly lost my mind. But you know... that might actually work. I mean, that can't possibly be the reason foreign car makers are so profitable. It's got to be that Americans just outright hate the country they live in. Ya, that's it. That's why imports sell so well.
#5
Lexus Fanatic
I think I'm missing something here. Somebody please explain how this is going to save GM money. They pay 35,000 people to essentially retire, take an early-out, and do nothing....all the while collecting a pension. So instead of paying them a full day's wage ( and benefits ) to do a full day's work, GM ends up paying them a pension ( half a day's wage, maybe? ) plus whatever other incentives or severance pay packages they get for leaving......to do NOTHING? That really makes a lot of economic sense, doesn't it ? And, to top it off, once those 35,000 people are gone, who is going to assemble their cars? Machines can't do everything...and people still have to run them.
#6
Lexus Test Driver
Originally Posted by mmarshall
I think I'm missing something here. Somebody please explain how this is going to save GM money. They pay 35,000 people to essentially retire, take an early-out, and do nothing....all the while collecting a pension. So instead of paying them a full day's wage ( and benefits ) to do a full day's work, GM ends up paying them a pension ( half a day's wage, maybe? ) plus whatever other incentives or severance pay packages they get for leaving......to do NOTHING? That really makes a lot of economic sense, doesn't it ? And, to top it off, once those 35,000 people are gone, who is going to assemble their cars? Machines can't do everything...and people still have to run them.
I see your point, getting them to retire quickly is just moving them from onsite to their home and paying them nearly the same.
The thing is, many of those people they want to retire don’t need to be there in the first place and are often not replaced.
This has a lot to do with unions and loyalty for spending 35 years with one place.
It is easier for them to retire people then it is to lay them off and deal with union repercussions, as well as there are major problems with allocated jobs for certain positions and the union is always up your **** about it.
I am not sure if retiring people works to be there benefit because the funds are appropriated in another financial area that doesn’t come from the general operation budget so it would look on paper for the company anyways, that they reduced head count.
I think it is a mix of flexibility on how they utilize people and what account the heads are really under once moved to retirement.
#7
Lexus Fanatic
Yeah......I'm not saying that pensions and retirement benefits are wrong....employees worked long and hard for them, and I'm going to get a pretty good one myself in the not-distant future. All I'm saying is that for a company struggling to stay afloat, I don't see where it makes a whole lot of economic sense to suddenly turn some 30-40% or your work force loose.....with benefits......and pay them for zero productivity. Their knowledge and experience is going to be sorely missed when all of a sudden a bunch of people inexperienced in the work suddenly have to step up and take their places. Sure, it is simple to just grab a mounted tire / wheel assembly and a PROPERLY torqued air wrench and put it on, but some jobs take real skill.....such as installing critical things as air-bag sensors, computer wiring, and fuel-system parts. Fuel-system and steering parts are especially critical...an error or a defect can set the car on fire or cause it to go out of control.
Trending Topics
#8
Lexus Test Driver
Originally Posted by mmarshall
Yeah......I'm not saying that pensions and retirement benefits are wrong....employees worked long and hard for them, and I'm going to get a pretty good one myself in the not-distant future. All I'm saying is that for a company struggling to stay afloat, I don't see where it makes a whole lot of economic sense to suddenly turn some 30-40% or your work force loose.....with benefits......and pay them for zero productivity. Their knowledge and experience is going to be sorely missed when all of a sudden a bunch of people inexperienced in the work suddenly have to step up and take their places. Sure, it is simple to just grab a mounted tire / wheel assembly and a PROPERLY torqued air wrench and put it on, but some jobs take real skill.....such as installing critical things as air-bag sensors, computer wiring, and fuel-system parts. Fuel-system and steering parts are especially critical...an error or a defect can set the car on fire or cause it to go out of control.
On the same note, the way the UAW have "set jobs" it is nearly impossible to shuffle people from job to job, retiring people opens the door for them to be able to hire someone directly into a role without the red tape.
I was just noting that many of those they want to retire are not needed anyways, such as my future father in-law. He is only busy maybe 5 hours a week as they keep shutting plants down in Flint. His buyout was about 1 years salary, he said screw it I will just stay another year.
Thread
Thread Starter
Forum
Replies
Last Post
Gojirra99
Car Chat
32
11-02-07 05:20 PM
LexFather
Car Chat
1
04-17-07 12:57 AM
Gojirra99
Car Chat
20
07-28-06 01:36 AM