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GM, UAW talking more buyouts, retirements

General Motors Corp. is close to an agreement with the United Auto Workers on another round of buyout and early retirement offers to cut the number of workers.
/ Source: The Associated Press

General Motors Corp. is close to an agreement with the United Auto Workers on another round of buyout and early retirement offers to cut the number of workers in jobs banks and clear openings for workers hired at lower-tier wages, a top company official said Sunday.

Troy Clarke, GM's North American president, told reporters at the North American International Auto Show that an announcement could come within a week.

"We are negotiating in some cases plant-by-plant, but certainly group-by-group or issue-by-issue, how to roll out a special attrition program," Clark said. "We think that we'll have that done very soon."

Clarke said he couldn't reveal specifics of the plan because negotiations continue.

The company already has announced plans to offer buyouts and early retirement packages to 5,200 UAW hourly workers at service and parts and operations facilities across the United States.

GM wants up to 16,000 hourly UAW workers to leave the company. Many would be replaced by workers at the lower-tier wage scale approved under a landmark four-year contract reached with the union last year.

Such new hires would be mainly in non-manufacturing jobs and would receive reduced health care and pension benefits.

GM also anticipates replacing many higher-paid workers with entry-level employees who will make less.

Current UAW employees earn about $28 an hour, while entry-level wages begin at about $14-$15 an hour.

Chairman and Chief Executive Rick Wagoner said the company probably will not see much savings from the lower-tier wages in 2008 but would begin to realize them in 2009.

"I would be surprised as we head out of this year if there's a significant economic impact in second-tier, but we could see numbers that move into the thousands rather than hundreds as the year goes on or approaches the end of it anyway," he said.

More than 34,000 GM workers left in 2006 by way of retirement or buyouts.

If the economy worsens this year and GM has to further cut production to handle lower demand, Clarke said it currently is not looking at closing any factories.

"When we talk about adjusting our capacity, we're not talking about shutting down plants," he said. "We're talking about (assembly) line rate changes, I think. We're talking about down weeks. At least that's what our thought is today. We'll have to see how it goes."

He also said he's optimistic about an industry rebound in the second half of 2008.

December U.S. sales excluding those to fleets jumped to an annual rate of 13.7 million, one of the best retail sales rates of the year, and the nation should be through most of its adjustable-rate mortgage increases during the first half of the year, Clarke said.

"We get through that factor and this kind of general malaise, we think that the market has an opportunity to strengthen," he said. "We're optimistic that the market does have some resiliency. There does appear to be some pent-up demand."