GM Buyouts....

[PrincessFiona]

OK...so GM is offering packages to US workers so that it can....rehire new workers for less money. On this news, the stock market has rallied because it means that GM will be getting out of the red. Instead of relying on ingenuity to create newer, more competitive products, they are just going to short the workers.

So...we all know that these workers had good healthcare benefits and salaries. What will happen to them and their families? How is this good overall for our economy? At the end of the day, these people will probably end up in much lower paying jobs. They'll end up spending less, which in turn will only hurt us.

:huh:

Kris

[JaneDoe]

Re: GM Buyouts....

I agree that for GM, Ford or Chrysler to get competitive, they need to improve their products. Period.

That said, these layoffs lend further support to revamping our current health care system. The private market is doing a terrible job at it.

[Flynn]

Re: GM Buyouts....

OK...so GM is offering packages to US workers so that it can....rehire new workers for less money.

What a piss poor way to solve the problem.

I'm in awe -- really. You've GOT to be kidding me.
Gotta love big business.

Re: GM Buyouts....

This happened to my mom....after nearly 30 years of service with a company she was forced to either take early retirement....or be fired. The company ended up replacing her with someone whose salary was 1/3 of what she was making. Even though my mom was well qualified and had a solid work history, it took her nearly a year to land a job....a job that pays 80% LESS than what she used to earn. No matter how qualified you are, starting fresh at the age of 55 is no easy task.

I agree that US car makers need to step up their efforts in improving their products. If Honda, Nissan and Toyota can make dependable yet affordable vehicles, why can't GM?

[Sheherezade]

Re: GM Buyouts....

This happened here to a nurse I met at one of DH's hospital fuctions. She now works for their department, but her former position was dissolved at a hospital in this area after 29 years of service. 29 years!!! She said that all the older workers were let go in a restructuring arrangement and they were told they had to sign agreements not to sue for age discrimination in order to receive some payout deal on their retirement/pension accounts. She believed it was to offset higher insurance costs as the workforce grew older. Frankly, that sounds like subject matter for an expose in the newspaper to me. It just seems so wrong to eliminate people that are just about to be eligible for pension payouts (30 years) but also cost you a bundle in healthcare costs. I can't imagine.

This gets back tot he discussion we had on a different thread about the lack of "moral" capitalism. It's not capitalism or big business per se....it's that those two terms have become associated with a total disregard for right and wrong behavior towards people in the pursuit of more money/profits/growth.

And....FWIW, I keep reading that the cars produced by the US automakers actually do well in testing - but that the image of US automakers was severely tarnished by past performance. They haven't been able to recover even though the products have improved. The buyers have left. :huh: It's something to consider.

Re: GM Buyouts....

It's my understanding that they are offering buy-outs. Are they forcing people to take them? (I'm not asking in an arguementative fashion - it's an honest question).

[PrincessFiona]

Re: GM Buyouts....

Honestly, Jenn, I'm not sure how it will work. My impression was that you can take the buy-out or lose your job without it...but...I might be wrong. :huh:

Kris

Re: GM Buyouts....

I think union membership would prohibit the "job loss" option. But I may be wrong.

Re: GM Buyouts....

From the NYT:

G.M. gave no target for the number of workers it hopes will leave the company. Under the terms of last fall’s new U.A.W. contract, however, G.M. can hire up to 16,000 new workers at wages of $16 an hour and less, compared with the average hourly wage of about $28 for current union members.

In a conference call with analysts and reporters, Mr. Henderson said the new labor contract would save G.M. $4 billion to $5 billion annually by 2010.

With cheaper labor waiting in the wings, G.M. made its current buyout offers sweeter than some previous deals.

With 46,000 of the 74,000 workers already eligible for retirement, G.M. laid out several attractive options — including retirement with full benefits and a cash payout of $45,000 to $62,500 depending on job classification.

Employees with less than 30 years of seniority can leave and receive fixed monthly payments until they reach full “30 and out” status. Younger employees can depart with cash payments of $70,000 or $140,000, depending on years of service, in exchange for giving up health care and other postretirement benefits.

The range of offers may be tempting for workers who see G.M., Ford and Chrysler in a continual cycle of downsizing as they lose more market share to foreign automakers.

“These buyouts are a watershed event in the industry that defined U.S. manufacturing for most of the 20th century,” Professor Shaiken said. “The question is, Do you stay with one of the best-paying jobs anywhere, or get out of an unstable industry and a troubled company?”

Workers at G.M.’s truck plant in Pontiac, Mich., offered a variety of reactions Tuesday to the buyout offers.

“Everybody’s trying to get out of here,” said Richard Lovett, 50, a materials handler with 30 years on the job. “I’m out of here. It’s all going downhill, and I don’t think it’s getting any better.”

Another employee is quoted later in the article saying he's staying ... so I don't think they get fired if they choose not to take it. I think the company is willing to take a hit to create lower payroll in the long run - and I don't really have a problem with it. I am not a big proponent of unions - I think people should have pay increases / job security based on performance, not on the number of years they sit there. I think with the way the union deal is structured, there is no way the American auto industry could right itself and get back on track.

[GrayMatterWife]

Re: GM Buyouts....

If Honda, Nissan and Toyota can make dependable yet affordable vehicles, why can't GM?

GM's real problem, from a financial perspective, is the fact that it is they are essentially in business to support their pensioners and provide health care benefits. In legal jargon, they are what is called "underfunded." It is a result of the fact that their employees lived a lot longer, and require much more expensive health care (coupled with the company retardation in growth) than what had been projected (think: the Social Security situation, but in the private sector). The only way for it to escape these liabilities would be to file for chapter 11 bankruptcy relief and then dump the entire thing on the PBGC, the federal corporation that insures pension plans. But then, they'd be dumping the mess on the taxpayers, since we pay for the PBGC.

Very sad situation. I don't think a marked improvement in the quality of GM cars would help all that much. Even if they produced a better product, they would be competing for market share with car makers that have nowhere near the debt obligations that they (and Ford...) do.

[GrayMatterWife]

Re: GM Buyouts....

And....FWIW, I keep reading that the cars produced by the US automakers actually do well in testing - but that the image of US automakers was severely tarnished by past performance. They haven't been able to recover even though the products have improved. The buyers have left. :huh: It's something to consider.

I have to say that my Chevy Blazer and Suburbans have been FAR superior to my Toyota Sienna. While I love to drive my van, it costs WAY more in maintenance and repair than any of my Chevy SUVs ever have.

Here, here! We had no problems with our Honda (before we sold it and are now on one car! ), but we LOVE our Ford F150 extended cab.

Re: GM Buyouts....

The GM buyouts are certainly nothing new. They have been offering them for the last 2 years. The buyout depends on length of service. My best friend's husband worked at the plant in Mansfield, OH for nearly 10 years. His buyout was $70,000. Those over 15 got 2x that much. They were not forced to take them. There are plants that are forced into closure and if it were not for the buyouts, then the entire plant would close and everyone would lose their jobs. those who chose saw it as a win/win situation. In her husbands case he was able to land a good job at the Nestle plant closer to their house. I'm sure it is hard for some but it also works for some too.