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Benefits June 27, 2006
35,000 GM Workers Opt for Early Out Program
June 27, 2006 (PLANSPONSOR.com) - Nearly a third of
General Motors' US manufacturing workers have taken the
company's early buyout program and agreed to retire this year
for payouts of as much as $140,000.
Reported by Fred Schneyer
Rick Wagoner, GM’s chairman and chief executive, announced in a statement posted on the giant carmaker’s Web site that 30,400 workers chose to take an early retirement incentive, meaning that GM paid many a cash payout and agreed to keep liability for their pensions and health care, according to a Los Angeles Times report. An additional 4,600 workers also took buyouts, cutting all their GM ties in return for cash payments of $70,000 to $140,000, the Times report said.
Shedding the unionized workers will increase the company’s cost reductions by $1 billion a year. All of the job cuts will be effective by the end of 2006, Wagoner said. The personnel reduction program will cost GM nearly $4 billion but will also contribute to the company’s cost-cutting moves by slashing the company’s health care and pension costs.
Also Monday, Delphi Corp., GM’s largest parts supplier and a former subsidiary, said that 12,600 of its US unionized manufacturing workers had opted for a GM-funded buyout.
Wagoner said he would be unable to disclose the total
financial impact of the GM and Delphi “accelerated
attrition” plans until the automaker reported its
second-quarter results next month.
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.
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