General Motors Corp. and Chrysler LLC are again offering hourly workers incentives to retire or leave the company voluntarily, as auto sales continue their dramatic declines and the companies struggle to stem losses.
GM announced the plans to United Auto Workers local union officials in e-mails Monday, said Mike Herron, chairman of UAW Local 1853 at the GM Spring Hill plant.
Details of the offer will be available today, he added. But Herron said the plan will include some cash and a voucher to be used toward purchase of an automobile and was designed primarily to entice workers with at least 30 years of service to retire right away. It also would apply to other workers who choose to leave the company but do not yet qualify for retirement.
GM has about 71,000 UAW members, most of them eligible for the new round of incentives, and Chrysler has about 38,000.
GM also completed a round of buyouts nationwide last year.
The Chrysler plan, presented to UAW locals in a memo, would give that automaker's workers $50,000 in cash and a $25,000 voucher toward purchase of a car as a retirement enticement; and for those not eligible to retire, a $75,000 cash payment and a $25,000 car voucher.
According to a memo from UAW Vice President General Holiefield to local presidents and other officials, the union negotiated for another round of buyouts at Chrysler because of conditions the federal government imposed on the company in exchange for granting low-interest "bridge" loans.
Workers at GM and Chrysler have until Feb. 25 to accept the offers. Both automakers are under pressure to come up with reorganization plans to present to the federal government by Feb. 17 in accordance with terms of the loans they received from the Bush administration in December.
GM already has received $9.4 million and Chrysler has received $4 million to help them get through a cash shortage brought on by the recession and resulting dramatic drop in auto sales during the fourth quarter of 2008.
Both are expecting to get more money, but it will depend on how their restructuring plans are received by President Barack Obama's administration.
The plans are designed to remove from the payroll older workers who now make the union wage of $28 an hour, to make way for new workers who could be hired for non-assembly jobs for as little as $14 an hour under new contracts the UAW approved with the U.S. Big Three automakers in 2007.
All of the Big Three, which also includes Ford Motor Co., have shuttered plants and scaled back production drastically in the past year in response to market conditions, and Ford is now completing a cutback of salaried workers, as well.
Ford isn't making offerFord spokeswoman Marcey Evans said Monday that the company has "no plans at this time to offer buyouts to hourly workers."
The automaker offered 10 early retirement and buyout packages to all hourly workers during the first quarter of 2008, and offered packages at selected factories in the third quarter. About 7,100 employees left the company as a result, she said.
In addition, Ford Motor Credit Co., the automaker's finance subsidiary, said last week that it would cut 20 percent of its work force by the end of July.
Chrysler said it would have made the buyout offer to workers in December but was not able to because all of its plants were closed temporarily to allow dealers to move some of the unsold vehicles they had in stock.
Most GM plants, including Spring Hill and Bowling Green, Ky., have been on extended holiday break since before Christmas and are not scheduled to resume production until Feb. 9.
But more temporary shutdowns are planned, including two weeks beginning March 2 for the Spring Hill plant, which assembles the Chevrolet Traverse crossover utility vehicle.
GM to end jobs bank Monday
100 Stable Housing Markets
