Post by Champs Elysees on Feb 12, 2008 10:02:57 GMT -5
GM offers buyouts to 74,000
No. 1 U.S. automaker heralds new cost-cutting efforts - aiming at entire U.S. hourly workforce - while posting improved financial results in fourth quarter.
GM is offering all 74,000 of its U.S. hourly workers up to $140,000 to retire or leave the company as it tries to trim costs further.
General Motors Corp. is no longer the clear leader in global auto sales. It now officially shares the title with Toyota Motor Corp.
NEW YORK (CNNMoney.com) -- General Motors posted better-than-expected financial results for the latest quarter, but indicated that its efforts to shave costs are not behind it as the automaker offered lucrative buyouts to 74,000 employees - its entire U.S. hourly workforce.
The nation's largest automaker reported improved fourth-quarter results from its overseas auto operations, which helped to balance out continued losses at its North American plants. But problems at finance unit GMAC, of which it still owns 49%, coupled with large charges taken in the third quarter related to tax credits, left GM with a company record $38.7 billion net loss for 2007.
Lucrative buyout packages are not new at GM (GM, Fortune 500) and other U.S. automakers such as Ford Motor (F, Fortune 500) and Chrysler LLC. GM offered similar deals to all its U.S. workers in 2006, as it sought to close plants and trim capacity to bring it in line with reduced demand for its products. That package helped it pare U.S. hourly employment by nearly 40,000 in the last two years.
But the latest range of offers to the remaining 74,000 GM workers represented by the United Auto Workers union is designed to allow the company to save money by paying new workers significantly less in pay and benefits than its current workforce, rather than lead to the large reduction in staffing sought in previous buyout packages.
GM spokesman Dan Flores said the company had no announced target for headcount reduction this time. "We certainly expect to be doing hiring as a result of this package," he said.
About 46,000 of the GM employees are eligible to retire today and they can take pension incentives worth between $45,000 to $62,500 to retire. In addition there are inducements for those who are five years from retirement to leave early and receive benefits.
Those who leave and agree to sever all ties with the company - including giving up lucrative pension and health care coverage - will receive a lump sum of $140,000 if they have 10 years of service, or $70,000 for those with less than 10 years.
"We've worked with our UAW partners to ensure our employees have a variety of attractive options to consider," GM Chairman and CEO Rick Wagoner said in a statement. "The special attrition program is an important initiative that will help us transform the workforce."
Ford and Chrysler also have the provision in their new contracts to pay new hires less in salary and benefits, but their workforces are not nearly as old as the UAW membership at GM, so they may end up seeing less turnover in their hourly staff.
Ford has its own buyout offer out to all its remaining 54,000 hourly U.S. workers. The proposal was announced last month when the company reported a fourth-quarter loss. Privately-owned Chrysler has offered buyout packages to hourly employees at targeted plants, but has not make a companywide offer.
GM unveiled its latest cost-cutting moves as it reported a narrow profit of $46 million, or 8 cents a share, excluding special items, in the fourth quarter. Results were boosted by significantly better performance in GM's core automotive operations.
The adjusted earnings were far better than the loss of 54 cents a share that analysts surveyed by earnings tracker Thomson First Call had forecast.
Including special items, the company reported a net loss of $722 million, or $1.28 a share, for the quarter. That compares to net income of $950 million, or $1.68 a share, it posted in the year-ago period.
No. 1 U.S. automaker heralds new cost-cutting efforts - aiming at entire U.S. hourly workforce - while posting improved financial results in fourth quarter.
GM is offering all 74,000 of its U.S. hourly workers up to $140,000 to retire or leave the company as it tries to trim costs further.
General Motors Corp. is no longer the clear leader in global auto sales. It now officially shares the title with Toyota Motor Corp.
NEW YORK (CNNMoney.com) -- General Motors posted better-than-expected financial results for the latest quarter, but indicated that its efforts to shave costs are not behind it as the automaker offered lucrative buyouts to 74,000 employees - its entire U.S. hourly workforce.
The nation's largest automaker reported improved fourth-quarter results from its overseas auto operations, which helped to balance out continued losses at its North American plants. But problems at finance unit GMAC, of which it still owns 49%, coupled with large charges taken in the third quarter related to tax credits, left GM with a company record $38.7 billion net loss for 2007.
Lucrative buyout packages are not new at GM (GM, Fortune 500) and other U.S. automakers such as Ford Motor (F, Fortune 500) and Chrysler LLC. GM offered similar deals to all its U.S. workers in 2006, as it sought to close plants and trim capacity to bring it in line with reduced demand for its products. That package helped it pare U.S. hourly employment by nearly 40,000 in the last two years.
But the latest range of offers to the remaining 74,000 GM workers represented by the United Auto Workers union is designed to allow the company to save money by paying new workers significantly less in pay and benefits than its current workforce, rather than lead to the large reduction in staffing sought in previous buyout packages.
GM spokesman Dan Flores said the company had no announced target for headcount reduction this time. "We certainly expect to be doing hiring as a result of this package," he said.
About 46,000 of the GM employees are eligible to retire today and they can take pension incentives worth between $45,000 to $62,500 to retire. In addition there are inducements for those who are five years from retirement to leave early and receive benefits.
Those who leave and agree to sever all ties with the company - including giving up lucrative pension and health care coverage - will receive a lump sum of $140,000 if they have 10 years of service, or $70,000 for those with less than 10 years.
"We've worked with our UAW partners to ensure our employees have a variety of attractive options to consider," GM Chairman and CEO Rick Wagoner said in a statement. "The special attrition program is an important initiative that will help us transform the workforce."
Ford and Chrysler also have the provision in their new contracts to pay new hires less in salary and benefits, but their workforces are not nearly as old as the UAW membership at GM, so they may end up seeing less turnover in their hourly staff.
Ford has its own buyout offer out to all its remaining 54,000 hourly U.S. workers. The proposal was announced last month when the company reported a fourth-quarter loss. Privately-owned Chrysler has offered buyout packages to hourly employees at targeted plants, but has not make a companywide offer.
GM unveiled its latest cost-cutting moves as it reported a narrow profit of $46 million, or 8 cents a share, excluding special items, in the fourth quarter. Results were boosted by significantly better performance in GM's core automotive operations.
The adjusted earnings were far better than the loss of 54 cents a share that analysts surveyed by earnings tracker Thomson First Call had forecast.
Including special items, the company reported a net loss of $722 million, or $1.28 a share, for the quarter. That compares to net income of $950 million, or $1.68 a share, it posted in the year-ago period.
Man, if they had come out with those new Malibus last year or the year before, I'd be sporting one of those instead of my Solara.
I really feel bad for the people they're laying off.
