The sun continues to set on the GM empire.
General Motors Corporation continued to make what it called “important progress on its restructuring plan” by announcing approximately 7,500 of its UAW-represented employees have decided to take advantage of the company’s attrition program. Most of the employees will be gone by April 1, 2009 by taking early retirements. The latest move follows the firing of 3,500 white-collar employees last week.
GM said it will fill job openings with current employees whenever possible, as spelled out in the provisions of the GM-UAW National Labor Agreement. The agreement cuts the wages in about half. In facilities where new employees are needed, GM will hire individuals at the lower entry-level wage and benefit structure. The extent of the new hiring at each facility, if any, will be determined on a plant-by-plant basis.
“These employees have many years of dedicated service to General Motors and I’d like to personally thank them for all they have done for the company,” said Gary Cowger, Group Vice President Global Manufacturing and Labor Relations.
“This is another example of GM’s commitment to execute our Viability Plan. There is still much to do, but the Special Attrition Program, along with the many difficult but necessary actions we have taken in recent months will help ensure the long-term viability and future success of General Motors.”
Senator Carl Levin of Michigan said yesterday that the Obama administration will announce further aid for GM and Chrysler soon.
Cowger noted that the UAW has been an important partner in GM’s ability to make changes to its business model. “And with the recently negotiated changes to the 2007 agreement, we will further improve our long term viability,” he said.
While agreements with the UAW have proceeded with reasonable progress, GM is locked in a stalemate with its bondholders who refuse to participate in the debt-for-equity swap that is required by its U.S. government loans.
The real possibility exists that the government will make good on its threat to put GM in some sort of structured receivership if the bondholders do not relent. This high stakes game of chicken is expected to go down to the March 31 deadline for a final plan submission. Talks are ongoing, but GM will say nothing further about them.
In 2006, approximately 34,000 hourly employees left the company through a Special Attrition Program and in 2008; another 19,000 hourly employees did the same. Today’s announcement brings the total hourly reduction to just over 60,500.