General Motors Partially “Privatizes” Retirement in Its Buyout of Thousands of Workers
And, amazingly, nobody’s saying it’s going to bankrupt the company “for generations.”
And although a lot is still up in the air, move might even save it:
GM said it would recognize charges for the buyouts in 2006. The company, which posted a $10.6 billion loss in 2005, last week raised its estimated exposure to Delphi to a range of $5.5 billion to $12 billion.
GM, which remains the world’s No. 1 automaker by unit sales, has been hurt by the waning popularity of profitable sport utility vehicles, high commodity costs and the burden of its pension and health-care obligations.
Delphi said about 13,000 of its 24,000 UAW-represented workers would be eligible for the early retirement incentives, including a one-time payment of $35,000.
The Troy, Michigan-based company also said that about 5,000 of its workers would have the opportunity to return to factory jobs with GM, which spun off Delphi in 1999.
GM will fund the lump-sum payments and provide retirement benefits for any Delphi workers that return to its payroll, said GM spokeswoman Katie McBride.
Early retirement incentives will also be offered to all of GM’s 113,000 factory workers, she said.
Of that total, 36,000 are currently eligible to retire under the UAW contract, while another 27,000 are close to 30 years of experience and will be offered special incentives, McBride said.
If too many workers in a particular plant opt to take the buyouts, the existing contract between GM and the union provides a seniority-based system to determine who would be eligible.
Why is the UAW willing to accept this for Delphi workers, but dead-set against people who keep working investing their own Social Security money? OK, because they have to or Delphi will liquidate. Fine — But you have to wonder how many workers are pleased to get control of something compared to what has turned out to be an empty long-term promise of (probably) nothing.
Isn’t that what we’re facing as a nation with Social Security and Medicare?
