General Motors Corp. said Thursday that a quarter of its U.S. hourly workers will take the company's latest buyout and early retirement offers, opening the door for new hires who will make less money.
The automaker said Thursday that 19,000 workers had agreed to take the buyout offers and leave the company by July 1. GM offered buyouts to all 74,000 of its U.S. hourly workers.
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GM never said how many workers it hoped would take the buyouts, but under a new labor agreement reached last fall with the United Auto Workers, GM may hire up to 16,000 non-assembly workers at half the old wage of $28 per hour. GM said it would fill job openings with current employees wherever possible, but would also be hiring new workers.
Troy Clarke, GM's North American president, said GM is trying to reshape its business in a challenging U.S. market, which has seen a steep drop-off in auto sales due to high gas prices and the weak economy.
“This attrition program gives us an opportunity to restructure our U.S. work force through the entry-level wage and benefit structure for new hourly employees,” he said.
Under the program, retirement-eligible workers were offered financial incentives to retire with their full pension and benefits, while workers who were within four years of their 30th anniversary were allowed to retire early and get reduced pay until their benefits kicked in. Workers could also take up to $140,000 to leave the company with no ties, including pension or health benefits.
GM spokesman Dan Flores wouldn't say how many workers took early retirement and how many took buyouts. He wouldn't say how much the buyouts will cost GM.
Himanushu Patel, an auto analyst with JPMorgan, said GM's acceptance rate on the buyouts was better than expected. He predicted GM won't replace up to 15,000 of the departing workers and will hire 4,000 for total annual savings of $2.1 billion.
Detroit-based GM conducted its last round of buyouts in 2006, when 34,410 workers left. GM had a total of 113,000 U.S. hourly workers when it began the 2006 buyouts.
The buyout totals came as word spread that GM's top managers are working on additional restructuring measures, including production cuts, to deal with the declining U.S. auto market and an accelerated shift from trucks to more fuel efficient vehicles. Two people who requested anonymity because the plan still is being devised confirmed that Chairman and Chief Executive Officer Rick Wagoner and his top managers are working on it.
Buyouts have been part of restructuring efforts at all of the Detroit Three and their major suppliers in recent years. Ford Motor Co. said last month that 4,200 hourly workers had accepted its latest buyout offers, and the company has begun offering more buyouts.
GM's largest supplier, American Axle and Manufacturing Holdings Inc., said Wednesday it will cut more than half of its U.S. hourly work force, or 2,000 jobs, through early retirement and buyout offers, plant closures and layoffs.