Janesville72.9°

GM buyouts gain speed

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JAMES P. LEUTE
May 23, 2008
— While a quarter of General Motors’ Janesville workforce has indicated it will leave the plant voluntarily, the next step is figuring out how many will leave involuntarily.

About 600 of the 2,400 hourly workers at the Janesville plant signed up by the midnight Thursday deadline for the automaker’s special attrition program.


Workers have seven days to withdraw their participation in the program, which offers a variety of early retirement and cash buyout options.


John Dohner Jr., president of United Auto Workers Local 95, said the number of hourly employees who decided to walk away from the plant didn’t surprise him.


“We thought it would be somewhere between 500 and 600,” he said.


The 25-percent take rate matches a similar buyout program GM offered in 2006, when about 900 of the plant’s 3,600 hourly workers left the plant.


GM spokesman Dan Flores said the automaker will not release results of the attrition program until the first week of June, primarily because the numbers will not become final until the seven-day grace period has expired.


Whatever the final number is in Janesville will be an important factor in the local plant’s production plans.


Starting in July, GM will eliminate one shift of production at the plant that produces full-size sport utility vehicles such as the Chevrolet Suburban and Tahoe and GMC Yukon XL and Yukon. Sales of the vehicles have been hammered by a difficult national economy and rising gas prices.


In announcing that it would eliminate second-shift production in Janesville, GM told the state it would lay off 756 workers. GM’s announcement was followed by layoff notices from local suppliers Lear Corp. (336) and LSI (132).


Whether or not GM will need to layoff 756 people will be determined after plant and union representatives see the final numbers from the attrition program.


With the voluntary departure of 600 workers, the plant’s hourly population will drop to about 1,800. Industry observers say that’s too many to staff one shift that will produce 58 vehicles per hour.


Under the new production model, Janesville workers will build 580 vehicles a day. At full production, they currently build a total of 880 across two shifts.


Janesville plant managers will come up with a number necessary to staff one shift. Union leaders will determine a different number, and the two sides will likely meet somewhere in the middle.


For example, if the two sides agree that 1,300 people will be needed to run one shift, then it’s likely that only 500 workers will need to be laid off.


When reporting layoff numbers to the state, companies tend to estimate on the high side. That’s because the notifications must be made at least 60 days prior to the layoffs, and if more people are laid off than a company originally reported, the company must go through the 60-day process again and accept the costly delays that go with it.


WHAT WAS ON THE TABLE?

General Motors and the United Auto Workers offered a special attrition program to all of GM’s 74,000 UAW-represented employees. While the sign-up deadline ended at midnight Thursday, workers have until midnight next Thursday to change their minds.


These were the options:


-- For employees with 30 years of service, GM offered incentives of $45,000 for production workers and $62,500 for those in skilled trades.


Employees will receive the incentives as a one-time, lump-sum cash payment; as a direct rollover to their GM 401(k) or Individual Retirement Account; as a monthly annuity, or as a combination of partial lump-sum payment and direct rollover.


Employees will keep their GM pensions and health care benefits.


-- Mutually satisfactory retirement for employees who are at least 50 years old with 10 or more years of service. This option provided a pension payment and full benefits based on the employee’s age and length of service.


-- Pre-retirement program in which employees with 26, 27, 28 or 29 years of service grow into a “30 and out” retirement. Until they reach 30 years of credited service, participating employees will get full benefits and a fixed monthly benefit ranging from $2,750 to $2,900.


-- Cash buyout for employees who voluntarily quit and sever all ties with GM. Workers with 10 or more years of credited service or seniority will get $140,000, while workers with fewer than 10 years receive $70,000.



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