Marco
28-06-2006, 09:27 AM
http://www.smh.com.au/news/business/gm-wage-bill-slashed-35000-opt-for-payout/2006/06/27/1151174200758.html
"GENERAL Motors' offer of buyout and retirement incentives was accepted by 35,000 workers, allowing it to trim annual spending by $US1 billion ($1.37 billion) more than planned and shed the workers two years ahead of schedule.
The departures exceeded chief executive Rick Wagoner's expectations and put him closer to his goal of restoring profit by reducing payrolls and closing plants.
Delphi, GM's former unit and largest supplier, said separately yesterday that 12,600 of its workers had agreed to retire, making it more likely it will emerge from bankruptcy as a viable company.
GM's union buyouts and retirements are part of plans to close nine North American plants and three parts depots by 2008 after $US10.6 billion in losses last year.
The high acceptance rate means GM will cut annual spending by $US8 billion by year's end, exceeding an earlier goal of $US7 billion.
"I think you'll see the market is favourable to the news," said Jim Hossack, an analyst with AutoPacific in Tustin, California.
The agreements on buyouts and retirements also put GM, Delphi and the parts makers' remaining union workers closer to a labour deal, Mr Wagoner said on Monday.
A new contract at Delphi would eliminate the threat of a costly strike that could shut down the auto maker's plants.
"We're coming very rapidly on the road back," Mr Wagoner said at a news conference in Detroit. GM expects the attrition program to cost $US3.8 billion.
The buyouts and retirements consist of 33,800 United Auto Workers members and about 1200 workers represented by the International Union of Electrical Workers-Communications Workers of America who accepted an earlier offer, GM said.
Shares of GM rose US34c, or 1.2 per cent, to $US28.09 in after-hours trading.
The stock gained US78c in trading before the buyout details were announced.
GM, the world's largest car maker, is scaling back in North America after Asian rivals such as Toyota captured a record share of the US market and sent GM's shares to an 80-year low. Mr Wagoner's plans to shut plants will trim regional production by about 1 million units a year.
Of the workers who agreed to leave GM, 4600 took buyouts and 30,400 took some form of retirement, accepting packages ranging from $US35,000 to $US140,000.
GM is trying to speed workers' departures so it can trim its payroll and save money. Workers who took buyouts also reduced GM's future liabilities by giving up their right to pensions and health care in retirement.
Workers who accepted the offer by last week's deadline have until June 30 to change their minds, so the final numbers may change slightly.
Most of those who accepted the offers will be gone by the end of the year.
Chief financial officer Fritz Henderson said natural attrition, now running at about 6500 workers a year, would not have been enough to get the savings GM needed."
"GENERAL Motors' offer of buyout and retirement incentives was accepted by 35,000 workers, allowing it to trim annual spending by $US1 billion ($1.37 billion) more than planned and shed the workers two years ahead of schedule.
The departures exceeded chief executive Rick Wagoner's expectations and put him closer to his goal of restoring profit by reducing payrolls and closing plants.
Delphi, GM's former unit and largest supplier, said separately yesterday that 12,600 of its workers had agreed to retire, making it more likely it will emerge from bankruptcy as a viable company.
GM's union buyouts and retirements are part of plans to close nine North American plants and three parts depots by 2008 after $US10.6 billion in losses last year.
The high acceptance rate means GM will cut annual spending by $US8 billion by year's end, exceeding an earlier goal of $US7 billion.
"I think you'll see the market is favourable to the news," said Jim Hossack, an analyst with AutoPacific in Tustin, California.
The agreements on buyouts and retirements also put GM, Delphi and the parts makers' remaining union workers closer to a labour deal, Mr Wagoner said on Monday.
A new contract at Delphi would eliminate the threat of a costly strike that could shut down the auto maker's plants.
"We're coming very rapidly on the road back," Mr Wagoner said at a news conference in Detroit. GM expects the attrition program to cost $US3.8 billion.
The buyouts and retirements consist of 33,800 United Auto Workers members and about 1200 workers represented by the International Union of Electrical Workers-Communications Workers of America who accepted an earlier offer, GM said.
Shares of GM rose US34c, or 1.2 per cent, to $US28.09 in after-hours trading.
The stock gained US78c in trading before the buyout details were announced.
GM, the world's largest car maker, is scaling back in North America after Asian rivals such as Toyota captured a record share of the US market and sent GM's shares to an 80-year low. Mr Wagoner's plans to shut plants will trim regional production by about 1 million units a year.
Of the workers who agreed to leave GM, 4600 took buyouts and 30,400 took some form of retirement, accepting packages ranging from $US35,000 to $US140,000.
GM is trying to speed workers' departures so it can trim its payroll and save money. Workers who took buyouts also reduced GM's future liabilities by giving up their right to pensions and health care in retirement.
Workers who accepted the offer by last week's deadline have until June 30 to change their minds, so the final numbers may change slightly.
Most of those who accepted the offers will be gone by the end of the year.
Chief financial officer Fritz Henderson said natural attrition, now running at about 6500 workers a year, would not have been enough to get the savings GM needed."