IE 11 is not supported. For an optimal experience visit our site on another browser.

GM, Chrysler offer retirement, buyout deals

GM and Chrysler are offering blue-collar employees another round of buyout and early retirement offers as the automakers try to cut their work forces and reduce expenses.
/ Source: The Associated Press

General Motors Corp. and Chrysler LLC are offering blue-collar employees another round of buyout and early retirement offers as the automakers try to cut their work forces and reduce expenses, union officials said.

GM detailed its offers in an e-mail message to local union officials Monday, according to a union official who spoke on condition of anonymity because workers have yet to be notified of the packages.

Chrysler made its offers Friday to all hourly workers represented by the United Auto Workers except those at the company’s Kenosha, Wis., engine plant, according to a memo detailing the offers that was obtained by The Associated Press.

Chrysler spokeswoman Shawn Morgan confirmed in a written statement that the company is making the offers. She said they would have been presented to employees in December, but they had to be delayed because production was suspended at Chrysler’s factories for much of December and January.

Both GM and Chrysler have seen sales decline with the overall U.S. auto market and have been forced to take government loans in order to survive.

According to the memo from UAW Vice President General Holiefield to local presidents and other officials, the union negotiated for another round of offers at Chrysler because of conditions the federal government imposed on the company in exchange for granting the loans.

The conditions require the Chrysler and GM to make changes to their UAW contracts, including elimination of the jobs bank, in which workers get most of their pay even when they are laid off. Chrysler, GM and the union said last month that the jobs banks had been eliminated.

“Many of you raised concerns that more of our members may have accepted special packages or explored other options if they had knowledge of the changes in the CBA (collective bargaining agreement) that may impact their current situation, i.e., elimination of the jobs bank, etc.,” Holiefield wrote.

The new round of offers may be more appealing to workers who are on indefinite layoff due to the U.S. auto sales slump. The companies can leave the jobs vacant for now, then later fill the jobs as needed with new workers who can be paid about half what current employees make.

Chrysler’s roughly 26,800 production workers represented by the UAW make about $29 per hour, while GM’s 62,000 UAW-represented workers make around $28. Under a contract reached last year, the company can pay some replacement workers around $14 per hour and give them less-costly health care and retirement benefits.

Workers at both companies have until Feb. 25 to accept the offers.

Chrysler’s early retirement package includes $50,000 cash and a $25,000 voucher to buy a car, while the Auburn Hills-based company’s buyouts include $75,000 cash and a $25,000 car voucher, according to the union memo. The buyout offer is more lucrative, with $115,000 plus a $25,000 car voucher for workers with 10 or more years of seniority at closed plants in St. Louis and Newark, Del., according to the memo.

News of Chrysler’s offers was reported earlier Monday by the trade publication Automotive News.

GM’s offers, to nearly all its UAW employees, are less lucrative. The Detroit company is offering $20,000 in cash and a $25,000 car voucher for workers who retire early and those who simply leave the company, according to the union official.

GM spokesman Tony Sapienza and UAW spokeswoman Christine Moroski declined to comment on the offers.

Chrysler and GM were each forced to obtain government loans to stay in business. Chrysler received $4 billion and expects to get another $3 billion after it shows the government its plan to become viable Feb. 17. GM has received $9.4 billion and expects to get $4 billion more when it files its plan.

Ford Motor Co., which says it has enough borrowed cash to make it through 2009 and doesn’t expect to use government loans, expects to get the same concessions from the UAW that GM and Chrysler get as part of their government loan agreements.

But Ford spokeswoman Marcey Evans said the company has “no plans at this time to offer buyouts to hourly workers.” The Dearborn-based 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.